Summary of Impacts to Value-Based Care from the 2022 Medicare Physician Fee Schedule

The changes contained within the 2021 Medicare Physician Fee Schedule (MPFS) created a myriad of complexities for integrated delivery systems (IDSs). While the 2022 version of the MPFS did not introduce ground-breaking revisions to relative value units or payment policies, it did include numerous changes in both payment and program requirements that will have a significant impact on IDSs continuing their transition toward value-based care (VBC). This article provides a brief overview of the major impacts to VBC that will be ushered in by the 2022 MPFS, as summarized in the following figure.

Reductions to Fee for Service Payments

The 2022 final rule stipulated an MPFS conversion factor of $33.5983, which represented a 3.71 percent decrease from the 2021 conversion factor of $34.8931. On December 10, 2021, President Biden signed the Protecting Medicare and American Farmers from Sequester Cuts Act into law. This legislation limited the budget neutrality adjustment applied by CMS to 0.82 percent ($0.2861). Additionally, the law introduced a phased reduction in Medicare sequestration cuts for 2022 and a temporary suspension of the scheduled 4.0 percent “PAYGO” cuts. As a result, and without further legislative adjustments, the MPFS conversion factor is scheduled to decline throughout the year as follows.

Updates to the Quality Payment Program

The Centers for Medicare and Medicaid Services (CMS) finalized a number of changes to Quality Payment Program (QPP) policies in the 2022 MPFS. It stated a desire to utilize the QPP to “advance health equity and address social determinants of health.” The 2022 MPFS implemented certain statutory requirements to the Merit-based Incentive Payment System (MIPS). CMS also indicated that MIPS Value Pathways (MVPs) and the Alternative Payment Model (APM) Performance Pathway (APP) are expected to be “key program changes that support our efforts to move the needle forward on value.”

Traditional Merit-Based Incentive Payment System

CMS made a host of updates to the traditional MIPS program for 2022, including the following:

Eligible Clinician Definition

Added clinical social workers and certified nurse midwives to the list of MIPS eligible clinicians.

Performance Category Weights

Performance Threshold

Established the performance threshold for the 2022 performance year/2024 payment year using the mean final score from the 2017 performance year/2019 MIPS payment year. Specifically, the performance threshold is set at 75 points, which represents an increase of 15 points from the 2021 performance year/2023 payment year threshold of 60 points. The additional performance threshold also increased by 4 points to 89 points, which represents the 25th percentile of final scores above 75 points from the 2017 performance year/2019 payment year. The 2022 performance year/2024 payment year is currently scheduled to be the last year MIPS will incorporate the additional performance threshold.

Performance Category Requirements

Based on these changes, CMS opined: “We anticipate clinicians will start to see greater returns on their investment in the [MIPS] program. Additionally, changes from the rule will result in a more equitable distribution within our scoring system, with small practices no longer bearing the greatest share of the negative payment adjustments.”

MIPS Value Pathways

In the 2022 MPFS Final Rule, CMS finalized 7 MVPs, along with policies to support implementation of these MVPs, beginning in the 2023 performance year. It indicated that MVPs are anticipated to “allow for a more cohesive participation experience by connecting activities and measures from the four MIPS performance categories that are relevant to a specialty, medical condition, or episode of care.” MVPs will include the same quality, cost, and improvement activities performance categories found in traditional MIPS, along with foundational measures for promoting interoperability and population health.

Finalized MVPs

CMS defined the first 7 MVPs that will be available in the 2023 performance year.

Subgroups

MVPs will allow eligible multispecialty groups to participate as a subgroup “to provide patients and clinicians with information that’s clinically meaningful at a more granular level.” It defined a subgroup as “a subset of a group [that] contains at least one MIPS eligible clinician and is identified by a combination of the group TIN, the subgroup identifier, and each eligible clinician’s NPI.” Subgroup reporting will be voluntary for the 2023, 2024, and 2025 performance years. Multispecialty groups must form subgroups in order to report MVPs beginning in 2026.

Scoring

MVP scoring policies generally will align with those used in traditional MIPS across all performance categories. Performance category weights will be consistent with traditional MIPS performance category weights. Reweighting policies for the redistribution of category weights will also generally be consistent with those of the traditional MIPS program.

Reporting Requirements

Reporting requirements for MVP participants include:

Performance Feedback and Public Reporting

CMS expects to provide comparative performance for “like clinicians who report on the same MVP.” Public reporting is planned to be delayed until 2024 to provide participants an opportunity to familiarize themselves with MVP scoring and reporting.

APM Performance Pathway

There were no major changes to the APP announced in the 2022 MPFS Final Rule. The most significant change announced was that APP participants will be able to report as a subgroup beginning with the 2023 performance year. The definition of a subgroup and eligibility to participate as a subgroup are the same as the requirements for MVP reporting subgroup reporting only to clinicians reporting through MVPs or the APP.

Medicare Shared Savings Program

CMS delayed the requirement for accountable care organizations (ACOs) to report electronic clinical quality measures (eCQMs) and MIPS clinical quality measures (CQMs), which require the submission of quality data for all payors, not just Medicare. Specifically, ACOs will not be required to report the three eCQMs/MIPS CQMs for the APP until 2025.

CMS also delayed by one-year the planned increase in the Medicare Shared Savings Program ACO quality performance standard that ACOs must meet to share in savings and avoid maximum losses (if applicable), as well as an additional incentive to encourage ACOs to report all-payer measures. ACOs will now have until 2025 to transition to the increased Shared Savings Program quality performance standard.

New Policies for Evaluation and Management Visits

CMS continued its overhaul of evaluation and management visit requirements by revising its policies regarding the billing of split (or shared) evaluation and management (E&M) visits, critical care services, and teaching physician services.

Split (or Shared) Evaluation and Management Visits

CMS modified its policies regarding split (or shared) E&M visits to “better reflect the current practice of medicine, the evolving role of non-physician practitioners (NPPs) as members of the medical team, and to clarify conditions of payment that must be met to bill Medicare for these services.”

The 2022 MPFS final rule provided the following new guidance for billing split/shared E&M visits to the Medicare program:

• It defined split/shared E&M visits as E&M visits provided in a facility setting by both a physician and an NPP who are members of the same group practice. Split/shared E&M visits must be billed by the provider who renders the “substantive portion” of the visit.
• During 2022, the substantive portion of the visit may be determined based upon the provider who performs the patient history, the physical exam, the medical decision-making, or more than half of the total time (except for critical care services, which can only be based on total time). Beginning in 2023, the substantive portion of the visit must be based solely upon which provider spends more total time with the patient, regardless of the who performs the patient history, the physical exam, or the medical decision-making.

• Split/shared visits may be billed for both new and established patients, for both initial and subsequent visits, and for prolonged services.
• The claim must contain a modifier identifying split/shared E&M services.
• The medical record must identify the providers who performed the visit and be signed the practitioner who provided the substantive portion of the visit.

As is typically the case, if the substantive portion of the visit is performed by an NPP, current MPFS reimbursement policies include a reduction in the payment amount for the services (e.g., 15 percent reduction for services performed by nurse practitioners and physician assistants). This change could result in a significant impact to the revenue generated by facility-based providers.

Critical Care Services

CMS clarified the following policies related to billing for critical care services:

• When medically necessary, critical care services can be furnished concurrently to the same patient on the same day by more than one practitioner representing more than one specialty and can be furnished as split/shared visits.
• Critical care services may be paid on the same day as other E&M visits if: (1) furnished by the same practitioner or another practitioner in the same group of the same specialty; (2) if the practitioner documents that the other E&M visit was provided prior to the critical care service at a time when the patient did not require critical care; (3) the other E&M visit was medically necessary; and (4) the services are separate and distinct, with no duplicative elements from the critical care service provided later in the day.

• Critical care services may be billed in addition to a procedure with a global surgical period if the critical care is unrelated to the surgical procedure. Preoperative and/or postoperative critical care may be paid in addition to the procedure if the patient is critically ill (meets the definition of critical care) and requires the full attention of the provider, and the critical care is above and beyond and unrelated to the specific anatomic injury or general surgical procedure performed (e.g., trauma, burn cases).

Teaching Physician Services

In the 2022 MPFS, CMS specified that, if time is used to select an office-based E&M visit level, only the time spent by the teaching physician in qualifying activities, including the time that the teaching physician was present with the resident performing those activities, can be included for purposes of selecting the appropriate visit level. If teaching services are provided utilizing the primary care exception, only medical decision making may be used to select the E&M visit level, since residents may require additional time to perform E&M services.

Approved Billing for Physician Assistant Services

Prior to 2022, Medicare could not make payments directly to physician assistants (PAs). Beginning January 1, 2022, PAs may bill Medicare directly for their professional services, reassign payment for their professional services, and incorporate with other PAs and bill Medicare for PA services. Services billed directly by PAs will be subject to the standard 15 percent reduction from the physician payment amount.

Continued Expansion of Telehealth Services

CMS has temporarily added numerous procedures to the Medicare list of telehealth services during the COVID-19 pandemic. The 2022 MPFS stipulates that those procedures will remain on this list through 2023 to provide CMS more time to evaluate leaving such services on the Medicare telehealth services list permanently. The 2022 MPFS also extended inclusion of certain cardiac rehabilitation services on the Medicare telehealth services list through the end of 2023 and permanently added a virtual check-in procedure to the list.

As authorized by the Consolidated Appropriations Act, 2021, the 2022 MPFS codified a permanent change to certain geographic restrictions for approved mental health telemedicine services and added the home of the beneficiary as a permitted originating site. CMS also clarified that its definition of “home” includes temporary lodging, such as hotels and homeless shelters, or other locations near the patient’s home. However, to utilize these relaxed geographic restrictions, CMS requires an in-person, non-telehealth service within six months prior to the initial telehealth service. CMS further stipulates that an in-person, non-telehealth visit must be provided to the patient at least every 12 months, but that “exceptions to the in-person visit requirement may be made based on beneficiary circumstances.”

CMS also amended its definition of “interactive telecommunications systems” for mental health telehealth services to include audio-only, interactive telecommunications system for services provided by practitioners with the capability to offer two-way, audio/video communications, when the patient does not have, or does not consent to use, two-way, audio/video technology.

In future editions of Insights InHealth™, we will examine the ramifications of each of these changes in more detail and review the strategies that progressive IDSs may utilize to navigate the 2022 MPFS in their journey toward VBC.