CMS Proposes Physician Payment Reductions While Expanding Telehealth Coverage


By AMRPA Headquarters posted 07-28-2021 17:49


By Kristen O’Brien, JD, Vice President, McDermott+ Consulting

On July 13, 2021, the Centers for Medicare & Medicaid Services (CMS) released the CY 2022 Physician Fee Schedule (PFS) proposed rule. This year’s rule includes significant policy proposals addressing telehealth and other COVID-19 flexibilities, updates to the underlying payment data that will impact payment rates, policies promoting health equity, and enhancements and other changes to further develop physician quality initiatives. 

Of particular concern in the proposed rule is the 2022 proposed physician conversion factor (CF) of $33.5848, representing a 3.75% reduction from the 2021 CF.  The proposed update is based on two factors: there is a 0% update scheduled for the PFS in CY 20221, and a funding patch passed by Congress expires at the end of CY 2021.  Congress will need to act in order to extend it through CY 2022 and beyond. 

In addition to the reduction in the CF, physicians face other looming payment cuts that require congressional action in order to be averted. These payment reductions include expiration of the moratorium on Medicare sequestration at the end of CY 2021, and statutory sequestration cuts required by pay-as-you-go legislation, which were triggered by the significant additional spending in the American Rescue Plan enacted in March 2021. These payment reductions come at a time when physician practices, hospitals that employ physicians and other stakeholders are facing uncertainty about the future of their pandemic recovery including what flexibilities may continue beyond the public health emergency (PHE), and are significantly challenged by other regulatory burdens (e.g., prior authorization and participating in Medicare quality programs such as MIPS). In light of these burdens, the provider community likely will continue to press Congress for relief from these payment cuts.

The rule, however, was not all bad news.  CMS also proposes a temporary extension of telehealth coverage for certain services through CY 2023. This would allow the agency to collect more data to inform the structure of telehealth coverage in a post-COVID-19 environment. As demand for telehealth beyond the pandemic has grown, CMS has placed a priority on determining which services can be appropriately provided via telehealth from a clinical perspective, and on addressing fraud and abuse. The agency has also indicated that COVID-19 has demonstrated that expanded telehealth policies may also help address access disparities.

Comments on the rule are due in September. 

CMS also released a PFS fact sheet and a QPP fact sheet along with the proposed rule.