Medicare Payment and Reimbursement

CMS’s 2022 Medicare Physician Fee Schedule proposed rule: A look at telehealth provisions and overall payment rate changes

July 15, 2021 10:54 pm
  • CMS proposes to expand reimbursement for mental health visits provided via telehealth to include audio-only visits.
  • Some telehealth services would remain eligible for reimbursement beyond the end of the public health emergency, while numerous others would lose their eligibility when the PHE expires.
  • Total Medicare payment for Physcian Fee Schedule services is scheduled to decrease in 2022, with the impact projected to vary by specialty.

Among the headlines from the proposed rule for the 2022 Medicare Physician Fee Schedule: Clinicians can get reimbursed for providing mental health services to Medicare beneficiaries via audio-only telehealth, while total payment for MPFS services is set to decrease.

CMS said audio-only visits can be used to provide mental health services in instances where “the beneficiary is not capable of using, or does not consent to, the use of two-way audio/video technology.” Services provided through designated opioid treatment programs would be among those available through audio-only telehealth.

Clinicians would need to have video capability to be eligible to bill for audio-only services. A new modifier would “serve to certify that the practitioner had the capability to provide two-way audio/video technology but instead used audio-only technology due to beneficiary choice or limitations.”

CMS seeks comments on whether additional documentation should be required in a patient’s medical record to support the clinical appropriateness of audio-only telehealth. Another open question is whether audio-only visits should be prohibited for high-level services such as Level 4 or 5 E/M visits.

The 2020 year-end appropriations law removed geographic restrictions and established the patient’s home as a permissible originating site for telehealth services furnished for diagnosis, evaluation or treatment of a mental health disorder. The legislation requires that an in-person visit take place no more than six months before the initial telehealth visit.

The proposed rule further requires that an in-person visit take place at least once every six months after the initial telehealth visit. CMS seeks comment on whether a different interval is necessary or appropriate when mental health visits take place in an audio-only format.

Telehealth services that will remain reimbursable after the PHE

More broadly, CMS said some telehealth services that were made reimbursable during the public health emergency (PHE) should remain as such through the end of 2023. That time frame will allow for “a glide path to evaluate whether the services should be permanently added to the telehealth list following the COVID-19 PHE.”

The services that will remain on the Medicare telehealth services list through 2023 are those that were added last year on a “Category 3” basis. The fact sheet for the 2021 Physician Fee Schedule final rule includes a list of those services and their corresponding CPT codes.

However, services in dozens of code families under the Healthcare Common Procedure Coding System will cease to be eligible for payment if provided via telehealth after the PHE ends. That list essentially includes all services that have not been permanently added to the eligibility list nor temporarily added based on Category 3 criteria. CMS will accept comments on whether emerging clinical evidence suggests any such service should remain on the list of eligible services at least through 2023.

A decrease in the PFS payment rate

The proposed rule establishes a reduction in the PFS conversion factor from $34.89 in 2021 to $33.58 next year. The reduction stems from the expiration of the 3.75% increase that was implemented for 2021, as provided in the 2020 year-end appropriations law in response to the public health emergency.

The American Medical Group Association called on Congress to step in and prevent the reduction from taking effect, noting that the cut would coincide with the expiration of some telehealth flexibilities and the reinstatement of the 2% Medicare payment cut known as sequestration.

“The proposed decrease in the conversion factor, the potential expiration of telehealth flexibilities and the return of the sequester create a confluence of events that will negatively impact providers at exactly the wrong time,” AMGA President and CEO Jerry Penso, MD, MBA, said in a statement. “The provider community is just now starting to recover from the COVID-19 pandemic.”

The impact of the proposed payment change is projected to vary by specialty, with most specialties expected to see an impact on total allowed charges of between plus- and minus-2%. Outliers include:

  • Interventional radiology (-9%)
  • Oral/maxillofacial surgery (-4%)
  • Portable X-ray supplier (+10%)
  • Radiation oncology and radiation therapy centers (-5%)
  • Vascular surgery (-8%)

The changes stem in large part from CMS’s annual assessment of RVUs. The increase for portable x-ray suppliers as well as prospective 2% increases for family practice, hand surgery, general practice and endocrinology “can be attributed largely to the proposed update to clinical labor pricing, as the services that these specialties furnish rely primarily on clinical labor for their PE [practice expense] costs,” CMS states in the rule.

Likewise, for specialties that stand to see relatively large decreases in payment, the key factor is “the redistributive effects of the proposed clinical labor pricing update.”

Specifically, PE costs for services provided by those specialties “rely primarily on supply or equipment items and therefore are affected negatively by the proposed updates to clinical labor pricing,” CMS states. “Since PE is budget neutralized within itself, increased pricing for clinical labor holds a corresponding relative decrease for other components of PE such as supplies and equipment.”

CMS notes that the projected payment impact on a specialty “may not necessarily be representative of what is happening to the particular services furnished by a single practitioner within a given specialty.”

Much more on the proposed rule

The 2022 proposed rule for the Physician Fee Schedule sets the stage for noteworthy changes to the Medicare Diabetes Prevention Program, the Quality Payment Program, vaccine payment rates and more. For information, see CMS’s news release and fact sheet.


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