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Physician fee schedule final rule opens up telehealth access

Susan Morse, Managing Editor, Healthcare Finance

Nov. 5, 2021

AMA wants Congress to avert physician payment cuts it says will amount to 9.75% for 2022.

For the first time outside of the COVID-19 public health emergency, Medicare will pay for mental health visits furnished by Rural Health Clinics and Federally Qualified Health Centers via telecommunications technology, including audio-only telephone calls. This will expand access for rural and other vulnerable populations.

The Centers for Medicare and Medicaid Services announced this and other actions in the 2022 Physician Fee Schedule final rule released late Tuesday.

In line with legislation enacted last year, CMS is eliminating geographic barriers and allowing patients at home to access telehealth services for diagnosis, evaluation and treatment of mental health disorders.

Certain mental and behavioral health services via audio-only telephone calls that are being covered include counseling and therapy for the treatment of substance use disorders and services provided through opioid treatment programs.


While expanded telehealth coverage is supported by providers and others who responded to the final rule, the update to the clinical labor rates for 2022 got harsh feedback from the American Medical Association.

With the budget neutrality adjustment to account for changes in Relative Value Units, as required by law, and expiration of the 3.75% temporary 2021 payment increase provided by the Consolidated Appropriations Act, the 2022 physician fee schedule conversion factor is $33.59, a decrease of $1.30 from the 2021 rate of $34.89.

The AMA wants Congress to intervene to stop the physician payment cuts.

"While the American Medical Association will thoroughly analyze the 2,400+ page rule, it is a reminder of the financial peril facing physician practices at the end of the year," said AMA president Dr. Gerald E. Harmon. "The final rule includes a reduction in the 2022 Medicare conversion factor of about 3.85%.

"The AMA is strongly advocating for Congress to avert this and other looming cuts to Medicare physician payments that, overall, will produce a combined 9.75% cut for 2022. This comes at a time when physician practices are still recovering the personal and financial impacts of the COVID public health emergency."

Other actions in the final rule include:

Promoting growth in Medicare diabetes prevention program

CMS is expanding the Medicare Diabetes Prevention Program (MDDP) model, in which local suppliers provide structured, coach-led sessions in community and healthcare settings using a Centers for Disease Control and Prevention-approved curriculum to provide training in dietary change, increased physical activity and weight-loss strategies.

CMS is waiving the Medicare enrollment fee for all organizations that apply to enroll as an MDPP supplier on or after January 1, 2022. CMS has been waiving this fee during the COVID-19 PHE for new suppliers, and said it has witnessed increased supplier enrollment.

The agency is shortening the model services period to one year instead of two years and is restructuring payments so suppliers receive larger payments for participants who reach milestones for attendance.

Increased access to medical nutrition therapy services

The PFS final rule also streamlines access to Medical Nutrition Therapy, which includes services provided by registered dietitians or nutrition professionals to help people with Medicare better manage their diabetes or renal disease.

CMS has removed a requirement that limited who could refer people with Medicare to these services, allowing any physician to do so. This change should particularly benefit people living in rural areas as the services are provided to eligible individuals with no out-of-pocket costs and may be provided via telehealth.

Encouraging vaccines to protect against preventable illness

CMS will maintain the current payment rate of $40 per dose for the administration of the COVID-19 vaccines through the end of the calendar year in which the ongoing PHE ends.

Effective January 1 of the year following the year in which the PHE ends, the payment rate for COVID-19 vaccine administration will be set at a rate to align with the payment rate for the administration of other Part B preventive vaccines. CMS will also continue to facilitate vaccinations for common diseases such as influenza, pneumonia, and hepatitis B.

This year, Medicare reviewed payments for vaccinations to ensure doctors and other health professionals are paid appropriately for providing vaccinations.

This final rule will nearly double Medicare Part B payment rates for influenza, pneumococcal and hepatitis B vaccine administration from roughly $17 to $30.

Expanded pulmonary rehabilitation coverage

As part of CMS' continuing efforts to address the current PHE, the agency finalized expanded coverage of outpatient pulmonary rehabilitation services, paid under Medicare Part B, to individuals who have had confirmed or suspected COVID-19 and experience persistent symptoms that include respiratory dysfunction for at least four weeks.

This goes beyond the physician fee schedule proposed rule, which would have focused the expanded coverage to those hospitalized with COVID-19.

CMS also finalized a temporary extension of certain cardiac and intensive cardiac rehabilitation services available via telehealth for people with Medicare until the end of December 2023.

Advancing the Quality Payment Program and MIPS Value Pathways

The final rule makes several changes to CMS' Quality Payment Program to promote the delivery of high-value care by clinicians through a combination of financial incentives and disincentives.

For example, CMS finalized a higher performance threshold that clinicians will be required to exceed in 2022 to be eligible for positive payment incentives. This new threshold was determined in accordance with statutory requirements for the Merit-based Incentive Payment System.

CMS has introduced the first seven MIPS Value Pathways in the clinical areas of rheumatology, stroke care and prevention, heart disease, chronic-disease management, lower-extremity joint repair (e.g. knee replacement), emergency medicine, and anesthesia.

To incentivize high-quality care for professionals that are often key points of contact for underserved communities with acute healthcare needs, CMS has also revised the current eligible clinician definition to include clinical social workers and certified nurse-midwives among those participating in MIPS.

Ensuring accurate payments through clinical labor update

For the first time in nearly 20 years, CMS is updating the clinical labor rates that are used to calculate practice expense.

As a result, payments to primary care specialists that involve more clinical labor, such as family practice, geriatrics, and internal medicine specialties, are expected to increase. There will be a four-year transition period to implement the clinical labor pricing update, which will help maintain payment stability and mitigate any potential negative effects on healthcare providers by gradually phasing in the changes over time.

Increasing access to physician assistants' services

Finally, CMS is implementing a recent statutory change that authorizes Medicare to make direct Medicare payments to Physician Assistants for professional services they furnish under Part B.

For the first time, beginning January 1, 2022, PAs will be able to bill Medicare directly.


The final rule advances programs to improve the quality of care for people with Medicare by incentivizing clinicians to deliver improved outcomes. That will advance its strategic commitment to drive innovation to support health equity and high-quality, person-centered care, CMS said.


"Promoting health equity, ensuring more people have access to comprehensive care, and providing innovative solutions to address our health system challenges are at the core of what we do at CMS," said CMS Administrator Chiquita Brooks-LaSure. "The Physician Fee Schedule final rule advances all these strategic priorities and helps build a better Medicare program for the future."

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