August 2, 2021 | Jessica Zeff

8 min read

CY 2022 Medicare Physician Fee Schedule Proposed Rule

Executive Summary

The CY 2022 Medicare Physician Fee Schedule (PFS) Proposed Rule was released on July 13, 2021.  This rule addresses annual payment updates and provision and policy changes that affect payment under the Physician Fee Schedule and Medicare Part B.  These policies generally affect physicians and other providers of outpatient services in a variety of settings. 

In addition to policy changes, CMS is using this proposed rule to continue to demonstrate the movement to improve healthcare accessibility, quality, affordability, empowerment, and innovation.  CMS also continues to address health equity gaps via the rulemaking process.  Efforts to health equity issues are, in part, addressed in this proposed rule via proposals for telehealth expansion, diabetes prevention programs, and Medicare quality programs.

Rule Timeframe

Released: 7/13/2021

Comment period ends: 9/13/2021

Final Rules anticipated: 11/1/2021

Final Rules effective: 1/1/2022

Summary of Proposed Rules

Payment Updates

  • CY 2022 Conversion factor is proposed to be set at $33.58.  It is currently $34.89 for CY 2021.
  • CMS did not propose any changes to the payment cuts established in the CY 2021 MFPS Final Rule that would significantly affect PT, OT and SLP services.  The 3.75% payment increase from the Consolidated Appropriations Act, which provided temporary relief for providers, is set to expire on 12/31/2021, so the cuts will resume on 1/1/2022.  Therapists are expected to see an additional 2% reduction, on average, for therapy services.
  • Valuation of OT codes (97165-97167) is being updated to reflect that these codes apply to the occupational therapy specialty.  It is unlikely this will have a significant impact on reimbursement.   CMS is seeking comment on this proposal.
  • Therapy assistants will see a 15% rate cut to the services they provide (in whole or in part) beginning January 1, 2022.

Payment for Attending Physician Services Furnished by RHCs or FQHCs to Hospice Patients

Proposed Updates

  • Hospice attending physician services will be covered during a patient’s hospice election only when provided by a rural health clinic (RHC) or federally qualified health center (FQHC) physician, nurse practitioner, or physician assistant designated by the patient as the attending physician and employed or under contract with the RHC or FQHC. Planned for January 1, 2022.
  • FQHC services will be covered when they are hospice attending physician services furnished during hospice election.

Therapist Assistant Modifiers

The Balanced Budget Act of 2018 requires CMS to reduce the payment for PT and OT services furnished in whole or part by PTAs or OTAs.  CMS established the CQ and CO modifiers to identify services provided in whole or in part by PTAs and OTAs, respectively.  These modifiers were required to be included on claims beginning 1/1/2020. Effective 1/1/2022, these services with these modifiers on the claim will be paid at 85%.  Note, the payment is applied to the allowable charges paid by Medicare (80% portion) which results in a payment of 88%.

CMS defines in whole or in part using de minimis calculations.  De minimis definitions were outlined in the CY 2020 MPFS Final Rule, and CMS is now proposing modifications to the regulation to specify that the de minimis rule applies to each 15-minute unit of service rather than all units of a service.  They are also proposing to use a midpoint rule instead of a de minimis calculation when a unit of a timed service remains.  If two remaining units remain, the modifier would be applied to only one of the units.

With the proposed changes, CQ/CO modifiers will apply when:

  • PTA/OTA provides all minutes of a timed service
  • For some timed services, the PTA/OTA provides a portion of the service independent of the PT/OT for the same service
  • The PTA/OTA provides at least 8 minutes of the service for the last timed unit (midpoint)
  • The portion of the untimed service furnished by the PTA/OTA exceeds the de minimis standard

With the proposed changes, CQ/CO modifiers will NOT apply when:

  • The PT/OT provides all minutes of a timed service
  • PT/OT and PTA/OTA furnish services together (this is considered skilled)
  • When the PT/OT provides enough minutes of the service on their own to bill for the last unit of a timed service (midpoint)


Therapy Telehealth

The option for use of telehealth for therapy is likely to be continued temporarily.  CMS is proposing to extend the ability to use therapy codes to bill for telehealth until the end of 2023.  Unfortunately, if the PHE ends before that, therapists will no longer be able to bill telehealth for Medicare Part B beneficiaries as they are still not considered eligible providers.  This means, unless additional policy changes are made, telehealth for therapists ends with the ending of the PHE.

As part of the PHE waivers, CMS added commonly used PT, OT and SLP codes to the Medicare telehealth services list on a Category 3 basis, i.e., they will remain on the telehealth list through the calendar year in which the PHI ends.  CMS is proposing to include additional therapy codes to the Category 3 list and to allow use of Category 3 codes for telehealth until the end of CY 2023 rather than expiring them when the PHE ends.  While the use of codes may be extended, CMS has not added PT, OT and SLPs to the list of eligible practitioners for telehealth, so they will no longer be able to perform telehealth services for Medicare beneficiaries when the PHE expires.

CMS did not propose to add therapy codes to the Category 1 or 2 list of approved codes for telehealth.  They feel the services related to the codes are therapeutic in nature and typically require direct patient contact to perform.  They are asking for additional information and data to support their use in telehealth.

Virtual Supervision

Virtual supervision of services was established as part of the PHE.  This allows “direct supervision” to include being immediately available using real-time interactive audio/video communications technology.  CMS is seeking comment of if this flexibility should become permanent.

Other Telehealth

There is a proposal to permanently allow audio-only telecommunications technology to be used when treating people for mental health conditions.

CMS is also asking for feedback on whether additional documentation should be required to support clinical appropriateness of audio-only telehealth.  Feedback is also being requested in about whether CMS should allow audio-only telehealth for some high-level services, such as level 4 or 5 E/M.

Physician Assistant (PA) Services

CMS is proposing to make direct payment to PAs for professional services they furnish under Part B beginning January 1, 2022.

EPCS Updates

CMS is proposing to implement exceptions to the Electronic Prescribing of Controlled Substances (EPCS) requirement. Exceptions would apply:

  • Where the prescriber and dispensing pharmacy are the same entity;
  • For prescribers who issue 100 or fewer controlled substance prescriptions for Part D drugs per calendar year;
  • For prescribers who are in the geographic area of a natural disaster and are granted a waiver

CMS is also proposing to extend the start date for compliance actions to January 1, 2023.  In addition, CMS may extend the compliance deadline for Party D prescriptions written for patients in long-term care facilities to January 1, 2025.

E/M Policy Updates

CMS is not proposing additional changes to the evaluation and management (E/M) service codes.

Split (or shared) E/M Visits

A split or shared E/M visit is when a physician and a qualified non-physician practitioner see the same Medicare patient on the same date of service.  When this happens, CMS “combines” the two services into a single evaluation and management service. CMS is changing its policies on split E/M visits.

  • The physician who conducts more than half of the total time spent with the patient would bill for the visit.
  • Split visits can be reported for new or established patients, initial or subsequent visits, and prolonged services.
  • Reporting of a modifier for split visits will be required.
  • The two individuals who performed the visit will have to document their individual visits in the patient medical record.

Teaching Physician Services

Under current regulations, if a resident participates in a visit in a teaching setting, a teaching provider can bill for the service only if they are present for the key or critical portion of the service.  CMS is proposing to clarify that the time when the teaching physician was present can be included when determining E/M visit level.  Under the “primary care exception”, only medical decision making (MDM) would be used to select the visit level.  CMS sees this as a way to guard against the possibility of inappropriate coding resulting from a resident’s perceived lack of experience rather than the actual time required to provide the services.

Appropriate Use Criteria

CMS is proposing to begin the payment penalty phase of the AUC program on either January 1, 2023, or the January 1 that follows the declared end of the PHE.

Remote Therapeutic Monitoring

Remote Therapeutic Monitoring (RTM) codes (989X1-5) were created to allow practitioners who cannot bill for Remote Physiologic Monitoring (RPM) codes to furnish and bill for similar services.  RPM codes are considered E/M codes and PTs, OTs, and SLPs, for example, cannot bill E/M services.  RTM codes monitor health conditions (including musculoskeletal and respiratory systems, and medication adherence and response) using an FDA approved medical device.

CMS discovered that the RTM codes were developed as “incident to” codes which means they cannot currently be billed by therapists or other non-physician practitioners.  CMS is seeking comments on how to resolve this issue.

References and Resources

2022 MPFS Proposed Rule Press Release

2022 MPFS Proposed Rule Fact Sheet

2022 MPFS Proposed Rule

CMS Physician Fee Schedule Home Page

CMS-1751-P Home Page with Downloads

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