CMS cements cuts to physician fees; AMA warns of 'financial peril'

CMS on Nov. 2 posted its 2022 Medicare physician fee schedule final rule, which includes updates on policy changes for Medicare payments and other Medicare Part B issues.

Five notes for physicians:

1. On Jan. 1, the conversion factor CMS uses to calculate reimbursement will decrease $1.30 to $33.59 when a temporary payment increase provided by the Consolidated Appropriations Act expires.

2. The appropriations act contained a 3.75 percent payment increase for all physician fee schedule services. The expiration of the temporary increase adds to cuts stemming from the expiring moratorium on the 2 percent Medicare sequester and the 4 percent Medicare payment cut due to the statutory Pay-As-You-Go Act of 2010.

3. The pay cut serves as a "reminder of the financial peril facing physician practices at the end of the year," American Medical Association President Gerald Harmon, MD, said in a Nov. 3 news release. The AMA has urged Congress to avert this cut to the conversion factor as well as  cuts to Medicare physician payments overall, which add up to a combined 9.75 percent reimbursement decrease in 2022.

"This comes at a time when physician practices are still recovering [from] the personal and financial impacts of the COVID public health emergency," Dr. Harmon said. "Congress is beginning to recognize that this financial instability could limit healthcare access for Medicare patients. The clock is ticking." 

4. Other updates to the physician fee schedule include an amended definition of interactive telecommunications system for telehealth services, nearly double Medicare Part B payment rates for certain vaccines, and updated clinical labor rates, which are used to calculate practice expenses under the physician fee schedule for the first time in nearly two decades.

5. CMS payments have been made under the physician fee schedule since 1992 and include services performed in offices, hospitals, ASCs, nursing facilities, hospices, outpatient dialysis facilities and clinical laboratories. 

For services in the office setting, CMS pays physicians at a single rate based on the full range of resources provided, whereas payment to physicians in ASCs or hospital outpatient departments only covers the portion incurred by the practitioner. These payments are based on relative value units applied to each service based on work, practice expense and malpractice expense, taking into account geographic adjustments.

Click here to access the 2,414-page rule.

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