Medicare Physician Fee Schedule Rule


2022 Proposed Rule – Medicare Physician Fee Schedule

Update: On September 13, 2021, AAPM&R submitted comments to the Centers for Medicare and Medicaid Services (CMS) in response to the Medicare Physician Fee Schedule Proposed Rule.  This comprehensive letter addresses proposals for 2022 which could significantly impact physiatry.

On July 13, 2021, the Centers for Medicare & Medicaid Services (CMS) published the annual Medicare Physician Fee Schedule Proposed Rule.  The rule describes proposed payment and policy changes for 2022.  This year, the rule included several proposals which could significantly impact physiatry.  Your Academy will be developing comments on the rule including comments to address the proposals outlined below.  A chart of proposed RVUs and payment rates for physiatry services in 2022 can be found here. A comprehensive fact sheet on the rule can be found on the CMS website. 

2022 Conversion Factor

The conversion factor is used, in conjunction with relative value units (RVUs) and geographic practice cost indices (GPCIs) to calculate payment for Medicare services.  The proposed conversion factor for calendar year 2022 is $33.58.  This reflects a decrease of $1.31 or 3.89 percent from the 2021 conversion factor, which is $34.89.  The conversion factor is calculated annually according to a formula which CMS is required to use under statute.  The formula accounts for fluctuations in RVUs across the fee schedule.  The decrease is primarily due to the expiration of a 3.75 percent increase which was implemented because of the late 2020 Consolidated Appropriations Act.  The additional 0.14 percent decrease is due to a required budget neutrality adjustment.

Practice Expense – Update to Clinical Labor Rates

For 2022, CMS is proposing an update to clinical labor rates.  Rates were previously last updated in 2002 using Bureau of Labor Statistics (BLS) data.  CMS proposes to follow similar methodology for the 2022 update, using 2019 BLS data.  This proposal will quite dramatically impact practice expense for several physiatry codes.  Coupled with the cut to the conversion factor, some services provided by physiatrists may be reimbursed as much as 16% less in 2022 than in 2021.

Payment Updates and Coverage of New Services

This year, CMS proposes several new services billable by physiatry as well as updates to payment for a group of physiatry codes which were resurveyed at the AMA RUC in recent years. 

Destruction of Intraosseous Basivertebral Nerve

AMA CPT has finalized two new codes for thermal destruction of intraosseous basivertebral nerve.  Code numbers have not yet been assigned.  CMS proposes to accept values for these two codes well below the RUC recommended work values of 8.25 wRVU for the base code and 4.87 wRVU for the add-on code.  The CMS recommendations for 7.15 wRVU and 3.77 wRVU do not adequately reflect the intensity of these services.

Destruction by Neurolytic Agent – Facet Joint

Facet destruction codes, 64633-36 were reviewed by the AMA RUC in April 2020.  The RUC recommended revised values for the base codes, 64633 and 64635, however CMS is proposing to implement a lower wRVU for both codes.  The AMA RUC recommended a WRVU of 3.42 for both codes, while CMS has recommended 3.31 wRVU for 64633 and 3.32 wRVU for 64635.

Remote Therapeutic Monitoring

In October 2020, AMA CPT finalized a new family of five codes for remote therapeutic monitoring.  The code family includes an education/set up code, monthly rental codes for a respiratory therapy device and a musculoskeletal therapy device, and two codes for the review of data and related clinical decision making.  Code numbers have not yet been finalized for this code family. 

Separate Coding and Payment for Chronic Pain Management

CMS is soliciting comment on whether it should consider creating separate coding and payment for medically necessary activities involved with chronic pain management or whether the resources involved in furnishing these services are appropriately recognized in current coding and payment. 

Billing for Physician Assistant Services

Currently, physician assistants (PAs) are not authorized to bill the Medicare program and be paid directly for their services in the same way that nurse practitioners and certified nurse specialists do.  The Consolidated Appropriations Act of 2021 authorized a change and CMS is proposing to implement this change to allow PAs to bill and be paid directly for their services.  This proposal does not change anything about the payments made to PAs, nor does it impact state supervision requirements.

Telehealth Services

CMS reviewed several requests to add new codes to the Medicare Telehealth Services List for 2022.  Several codes relevant to physiatry were proposed including many therapy procedures that may be performed by physiatrists or their team.  However, CMS did not agree with the proposals and recommends that the codes not be added to the telehealth list.

Following the Consolidated Appropriations Act of 2021, CMS is recommending implementing new telehealth provisions for mental health services.  Provisions include requiring that the billing physician or practitioner have furnished an in-person, non-telehealth service to the beneficiary within the 6-month period prior to the date of the telehealth service.  Further, CMS proposes to permanently cover audio-only telehealth specifically only for mental health services.  

Appropriate Use Criteria

The rule provides background on the Appropriate Use Criteria (AUC) program which requires providers ordering certain advanced imaging to consult specified AUC through qualified clinical decision support mechanisms.  The program was created under the Protecting Access to Medicare act of 2014 and has been delayed several times.  Most recently, on January 1, 2020, the program began an educational and operations testing period for claims-based reporting of AUC consultation information.  The rule proposes a new implementation date of January 1, 2023 or January 1 of the year after the year in which the public health emergency for COVID-19 ends.  CMS seeks information on the state of readiness of providers and facilities. 


2021 Medicare Physician Fee Schedule Final Rule

On December 1, 2020, the Centers for Medicare & Medicaid Services (CMS) released the Medicare Physician Fee Schedule Final Rule which finalizes payment rates and policies effective January 1, 2021. Your Academy submitted comments to the proposed rule in early October.

Conversion Factor and Payment Cut Impact

The Consolidated Appropriations Act, signed into law on December 27, 2020, included adjustments to the 2021 conversion factor. These adjustments result in a finalized 2021 conversion factor of $34.89. This is a 3.3% reduction from the 2020 conversion factor of $36.09, which is a far smaller reduction than the one originally finalized in early December 2020.

We developed a code-by-code summary of 2021 payment compared to 2020 payment, available to AAPM&R members here. This summary is updated to reflect the new 2021 conversion factor and other relevant changes resulting from the Consolidated Appropriations Act. The impact of the final rule on payment varies significantly based on the services being provided. 

Overall themes include:

  • Payment for non-facility services will typically be slightly higher than 2020 due to some slight increases to practice expense
  • Payment for facility services will typically be slightly lower than 2020 due to the conversion factor coupled with not receiving the same practice expense increases as non-facility services
  • Outpatient and physician office evaluation and management services will be reimbursed significantly higher this year due to an increase in work RVUs

Office and Outpatient Evaluation and Management Changes

CMS finalized its proposal to adopt the new CPT code descriptors and guidelines for office and outpatient E/M services.  These changes include elimination of code 99201.  Guidelines and code descriptors now reflect that code selection should be based on either medical decision making or time.  For more detailed information regarding the updates to the office and outpatient E/M code set, visit our 2021 E/M webpage

Along with the CPT updates to office and outpatient E/M, CMS has finalized a new HCPCS code for prolonged services when billed with office and outpatient E/M. 

G2212 – Prolonged office or other outpatient evaluation and management service(s) beyond the maximum required time of the primary procedure which has been selected using total time on the date of the primary service: each additional 15 minutes by the physician or qualified healthcare professional, with or without direct patient contact. 

Note: Coding guidelines for prolonged services codes billed with other E/M remain the same.  Further, it is unclear at this time whether other payors will choose to reimburse for G2212. 

Scope of Practice Issues

CMS finalized its proposal to allow NPs, CNSs, PAs, CRNAs and CNMs to supervise diagnostic tests where allowed by state scope of practice laws.  This is a permanent scope of practice expansion of current allowances made under the pandemic.  AAPM&R opposed this scope of practice expansion in our comment letter to CMS. We urged CMS to re-instate physician supervision requirements of diagnostic tests after the PHE.

CMS finalized its proposal to permanently allow teaching physicians to meet requirements to bill for services involving residents through virtual supervision. Through the pandemic, this expansion covers all teaching settings. However, following the pandemic, the permanent expansion is limited to services furnished in residency training sites that are located in rural areas. 

CMS also finalized its proposal to allow a physical therapist (PT) or occupational therapist (OT) who establishes a maintenance program to assign the duties to a physical therapist assistant (PTA) or occupational therapy assistant (OTA), as clinically appropriate, to perform maintenance therapy services.


CMS finalized its proposal to permanently expand the Medicare telehealth list to include:

  • Domiciliary, rest home, or custodial care services, established patients (99334-5)
  • Home visits, established patients (99347-8)
  • Cognitive assessment and care planning services (99483)
  • Visit complexity office and outpatient E/M add on code (G2211)
  • Office and outpatient E/M (G2212)

CMS also temporarily expanded the Medicare telehealth list to include:

  • Home visits, established patients (99349-50)
  • Nursing facility discharge day management (99315-6)
  • Therapy services, physical and occupational therapy (97161-8, 97110, 97112, 97116, 97535, 97750, 97755, 97760-1, 92521-4, 99226)
  • Hospital discharge day management (99238-9)

Visit the CMS website for the complete Medicare telehealth list.

CMS clarified that at the conclusion of the public health emergency (PHE) it will no longer be offering separate payment for audio-only E/M visit codes. Following the PHE, audio-only services will be categorized as bundled. It should also be noted that following the PHE, CMS coverage of telehealth will be restricted to services offered to patients in healthcare professional shortage areas.

Practice Expense for PPE During the Pandemic

Your Academy previously announced CPT finalized a new code, 99072, for additional PPE and clinical staff time associated with services during the pandemic. AAPM&R has urged CMS and other payors to cover this service.  However, CMS has finalized that it will not separately pay for code 99072.  CMS is accepting comments on this issue, and your Academy will continue to advocate for payment to reflect that additional costs associated with supplies and staff time during the pandemic. 

Quality Payment Program

CMS finalized the following provisions for the 2021 Merit-Based Incentive Payment System (MIPS) reporting, which impacts 2023 Medicare Part B payments:

  • In order to avoid a 9% penalty, you must meet or pass the threshold of 60 points for 2021.
  • The exceptional performance threshold remains at 85 points.
  • The Quality category weight will decrease from 45% to 40%.
  • The Cost category will increase from 15% to 20%.
  • Both the Improvement Activities and Promoting Interoperability categories remain at 15% each.

Your Academy will provide additional 2021 QPP education and educational materials in the spring.

Electronic Prescribing for Controlled Substances (EPCS)

Congress passed legislation in 2018 requiring Medicare Part D prescriptions for controlled substances to be electronically prescribed starting in 2021, with some exceptions. In the final rule, CMS reiterated the rationale for its proposal to defer the EPCS mandate until 2022, but also noted that some commenters urged the agency to require EPCS in 2021 even if it declines to enforce the requirement until 2022. As such, CMS finalized that electronic prescribing for controlled substances for Medicare prescriptions will begin in 2021 and compliance will be required beginning in 2022.

More Information

The complete rule is available on the Federal Register website.

A detailed CMS fact sheet is available on the Medicare website.

About MPFS

Medicare payment for physicians, and some non-physician practitioners (NPPs), is based on set rates under Medicare Part B. The system for payment, known as the Medicare Physician Fee Schedule (MPFS), is used when paying for: professional services of physicians and some NPPs; covered services incident to physicians’ services (other than certain drugs covered as incident to services); diagnostic tests (other than clinical laboratory tests); and radiology services. The MPFS also addresses various quality issues, fraud and abuse issues, and other issues that impact physicians. CMS updates the MPFS regulations annually, with comment periods open prior to implementation of the final rule. 

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