Physician Fee Schedule Summary of Changes: 2022

On November 2, 2021, the Centers for Medicare & Medicaid Services (CMS) released the final 2022 Medicare Physician Fee Schedule (MPFS) rule; a link to the CMS MPFS factsheet can be found here. The rule includes updates to the Medicare physician payments, quality reporting requirements, and Medicare Shared Savings Program (MSSP) policy changes for attribution and repayment mechanisms.

I wanted to highlight a few changes that drew my attention that will impact value-based care organizations:

Medicare Physician Payments

  • The Medicare conversion factor decreased from $34.89 to $33.598 – a drop of 3.7 percent. This should come as no surprise because Medicare halted the sequestration for last year due to COVID.
  • The geographic restrictions on telehealth services were removed; additionally, CMS expanded the beneficiary’s home as an originating site for telehealth for the diagnosis, evaluation, or treatment of mental health disorders. An in-person visit will be required every 12 months. Again, this is not surprising, since CMS has been expanding the use of telehealth services since COVID.
  • CMS revised the Chronic Care Management and Principal Care Management Codes, to help streamline the coding processes and add new CPT codes to reflect additional services rendered. The new codes are as follows:

Source: https://public-inspection.federalregister.gov/2021-23972.pdf

Quality Measure Reporting

  • CMS finalizes policies to allow ACOs to continue to report using the Web Interface in 2022, 2023, and 2024. This decision was made due to significant backlash by stakeholders who insisted that the financial burden and change in workflow would greatly impact their organizations if the changes to transition to the Advanced Alternative Payment Model Performance Pathways (APP) were implemented too soon. This adjustment to the timeline will allow organizations to more easily transition to the APP over the next few years without rushing into a build or buy discussion. Additionally, the extended timeframe will allow organizations to test run the process without penalty. This slower transition will enable continuous process improvement in time for the change to take effect. For additional information, please reference the Quality Payment Program (QPP) resources.

MSSP Policy Changes

  • CMS finalized revisions to the repayment mechanism arrangement policy to reduce by 50 percent. The percentage is used in the existing methodology to determine the repayment mechanism amount. This will significantly ease the burdens and costs associated with the repayment mechanisms, and hopefully allow more organizations to take on downside risk.
  • CMS finalized revisions to the definition of primary care services that are used for purposes of beneficiary assignment. The updated definition will be applicable for determining beneficiary assignment beginning with PY 2022. Specifically, seven new codes were added to the list of those used for Accountable Care Organization (ACO) assignment, including updated or new codes for chronic care management, principal care management, and other evaluation and management (E/M) services.
  • CMS has reduced the burden and streamlined the Shared Savings Program application process. For example, CMS reduced the frequency and circumstances under which ACOs submit sample ACO participant agreements and executed ACO participant agreements to CMS.
  • CMS also changed beneficiary notification requirements for ACOs that select prospective assignment by only requiring notices to be sent to beneficiaries prospectively assigned to their ACO. This will reduce the burden for ACOs and eliminate confusion for beneficiaries.

Overall, CMS looks to identify areas in which administrative processes can be streamlined and unnecessary administrative burdens are eliminated. This can be seen with the changes to the MSSP rules. Additionally, CMS is continuously identifying ways to help patients receive better care, which can be seen with the updates to the quality reporting processes and increase in access via telehealth services. The reductions in the fee schedule changes are intended to encourage organizations to move away from relying solely on fee for service revenue and seek alternative payment mechanisms to increase operational efficiencies and improve the quality of care for beneficiaries.

Maria Nikol

About the Author


Senior Business Consultant

Maria Nikol is a senior business consultant with 10 years of experience in healthcare operations and healthcare strategy. Her specialization includes process improvement and the application of emerging models of healthcare delivery such as Patient-Centered Medical Homes and Accountable Care Organizations. She holds a Master of Jurisprudence in Health Law from Widener University and a Bachelor of Science in Pharmaceutical Marketing and Management from the University of the Sciences in Philadelphia.

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