CMS PFS Emphasizes Health Equity via Payment Policy Updates

November 12, 2021

The Centers for Medicare & Medicaid Services released its CY 2022 Physician Fee Schedule final rule on November 2 reflecting the Biden-Harris administration’s goal of increasing access to and quality of care and reducing health disparities. The PFS also advances access to new remote therapeutic monitoring codes that expand on existing remote physiologic monitoring codes developed over the last few years.

The PFS updates primarily focus on the following:

  • Extending and expanding telehealth service coverage through the end of CY 2023
  • Extending COVID-19 flexibilities
  • Expanding coverage and billing privileges for certain services and providers
  • Implementing nationwide physician quality control measures

While the COVID-19 pandemic continues to create uncertainty about the future, the PFS addresses important changes to physician payment rules that will ultimately have long-lasting effects on healthcare providers.

PFS Relative Value Unit (RVU) & Conversation Factor (CF) for CY 2022

The Centers for Medicare & Medicaid Services (CMS) develops Medicare payment rates, for both physicians and technical service providers, through the establishment of both national uniform RVUs, which are geographically adjusted, and a fixed-dollar conversion factor.

By law, CMS must create RVUs for three different categories of resources: work, practice expense, and malpractice expense. These RVUs are then multiplied by the CF to establish the payment rate for both professional and technical components. In the PFS, CMS decreased the CF to $33.59, representing a decrease from the CY 2021 PFS CF of $1.30. This will lead to reduced payments for services reimbursed through the PFS.

Telehealth & Remote Therapeutic Monitoring (RTM) Services

During the COVID-19 public health emergency (PHE), telehealth services became an integral component of the Medicare program. These services have enjoyed expanded coverage and flexibilities under Medicare during this time.

The final rule extends many of these changes through December 31, 2023 to allow CMS sufficient time to evaluate whether they should become permanent. This may also give Congress additional time to enact meaningful Medicare telehealth legislation. In addition, the PFS finalizes CMS’s coverage requirements for telemental health services, which may ultimately serve as a guide for how CMS implements broader telehealth reform.  

The key updates include the following:

  • Extending Category 3 services added to the Medicare Telehealth List in the CY 2021 PFS final rule through CY 2023
  • Adding cardiac and intensive cardiac rehabilitation codes to the Category 3 list of services through CY 2023
  • Adopting permanent coding and payment for virtual check-ins
  • Extending the relaxation of originating site requirements for telehealth services
  • Establishing the frequency of in-person, non-telehealth visits necessary to support coverage of telemental health services as outlined in the Consolidated Appropriations Act
  • Expanding coverage for telemental health services provided by Rural Health Clinics and Federally Qualified Health Centers
  • Expanding the definition of “interactive telecommunications systems” to include audio-only communications when used for certain telemental health services
  • Establishing new RTM codes, with effective dates of January 1, 2022

These revisions are intended to alleviate health disparities for populations that otherwise have limited access to in-person care. 

With respect to RTM, these codes build upon the existing remote physiologic monitoring (RPM) codes but reflect additional input from the American Medical Association and other stakeholders. In large part, the RTM codes function in a similar manner to the RPM codes but are designed with greater flexibility in the nature of data that is captured and the methodology for capturing the data (i.e., data can be transmitted directly through a monitoring device or uploaded by the patient).

Although CMS has made several modifications to the RPM/RTM code set over the last several years, stakeholders continue to struggle with implementing an RPM/RTM system that meets the Medicare coverage requirements and is financially viable. CMS is likely to further consider the impact of these new services in subsequent rulemaking.

Medicare Part B Updates

CMS also updated certain Medicare Part B payment policies to expand coverage for services rendered by nonphysician providers. In addition, CMS extended additional COVID-19 flexibilities, allowing the agency additional time to assess permanent policy reform in this area. Specifically, the final rule changes indicate that during CY 2022 Medicare Part B will continue to do the following:

  • Pay for physical and occupational therapy services furnished in whole or in part by physical therapy (PT) assistants and occupational therapy (OT) assistants under appropriate supervisory conditions at 85%
  • Establish a consistent de minimis policy for coverage of OT and PT services
  • Permit physician assistants (PAs) to bill directly to and receive payment directly from Medicare effective January 1, 2022
  • Expand coverage for colorectal cancer screening tests that become diagnostic tests upon the identification of a need for additional services
  • Maintain the payment amount for methadone for the duration of CY 2022
  • Extend coverage of COVID-19 vaccination and monoclonal antibody products through the end of the calendar year in which the PHE ends
  • Require drug manufacturers with Medicaid Drug Rebate Agreements to submit Average Sales Price data for Part B products

By allowing for direct payments to PAs and expanding the coverage for physical and occupational services, CMS is focusing on increasing the access individuals have to a variety of providers and helping to address the increasingly tenuous clinician shortage throughout the country.

Physician Quality Control Updates

CMS continues to tinker with its physician quality control programs, such as the merit-based incentive payment system (MIPS). MIPS will continue to evolve through the launch of the MIPS Value Pathways (MVP) program.

The traditional MIPS was designed to reward eligible physicians with higher payments for improvements in quality, cost, specified improvement activities, and promoting interoperability. The proposed MVP program would adjust measures used in MIPS to simplify the program, create more meaningful rewards for clinicians providing high-quality care, and promote greater patient engagement. CMS is delaying the implementation of the MVP program to CY 2023, which will allow physicians, Medicare Administrative Contractors, and other stakeholders additional time to prepare for the implementation of the new framework.

In the meantime, however, the final rule updated the relative weights for the four performance categories under MIPS and expanded the eligibility criteria for participating clinicians to include social workers and certified nurse midwives.

By pushing the implementation of the MVP program, CMS is likely recognizing the tumultuousness of the PHE and ensuring that practitioners and healthcare systems get back to some type of normalcy before attempting to implement a revised MIPS. This delay should better position healthcare practitioners to understand the payment incentives and adjust their practices accordingly.

How We Can Help  

We have a command of the issues our clients are facing in this area, and routinely assist with implementation of RPM/RTM programs, advising on changes to coverage requirements, and assisting providers with successful MIPS implementation and compliance. 


If you need assistance with or have any questions on the issues discussed in this LawFlash, please contact the authors, or any of the following Morgan Lewis lawyers:

Washington, DC
Michele L. Buenafe
Kathleen McDermott
Scott A. Memmott
Albert W. Shay
Howard J. Young
Jacob J. Harper
Tesch Leigh West
Jonathan P. York

Mark B. Stein

Gregory N. Etzel
B. Scott McBride
Banee Pachuca
Sydney Reed Swanson

Los Angeles
Jennifer Zargarof

San Francisco
W. Reece Hirsch