CMS Releases 2022 Physician Fee Schedule Rule

PAs authorized to receive direct payment under Medicare

November 10, 2021

The Centers for Medicare and Medicaid Services (CMS), the federal agency that oversees the Medicare program, released the 2022 Physician Fee Schedule final rule. The rule updates a number of Medicare coverage and payment policies that impact PAs, physicians and other health professionals. Some of the key provisions of the rule, which take effect on January 1, 2022, are highlighted below.

Direct Payment
In the rule, CMS permanently authorized PAs to receive direct payment from the Medicare program. Currently, payment for services provided by PAs is required to be made to the PA’s employer. The inability to be paid directly hindered PAs from fully participating in certain practice, employment, and ownership arrangements, prevented them from reassigning their payments in a manner similar to physicians and APRNs, and created additional administrative barriers to hiring and utilizing PAs.

Similar to most physicians and nurse practitioners (NPs) who already have access to direct payment, the majority of PAs will maintain their current W-2 employment relationships with reimbursement for their services continuing to flow to their employers. However, being eligible for direct payment will be beneficial to PAs who want to work as independent contractors, own a practice or medical corporation, and who work in certified Rural Health Clinics.

The change only applies to Medicare and does not affect reimbursement policies pertaining to Medicaid or commercial payers. Also, Medicare regulations defer to state law. If state law or regulations prohibit a PA from receiving direct payment, those restrictions would have to be removed before Medicare will directly pay PAs in the state.

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Split/Shared Visit Billing
CMS made significant changes to longstanding policies for split (or shared) E/M visits. Critical care services and certain visits occurring in skilled and non-skilled nursing facilities, which previously had been excluded, will be eligible for split (or shared) billing beginning January 1.

CMS also changed the definition of a “substantive portion” of a split/shared service, which is used to determine if a claim for a service jointly performed by a PA (or NP) and physician can be billed under the physician’s name and National Provider Identifier (NPI) number. Medicare payment is made at 100 percent when billed under the physician’s name as opposed to 85 percent if billed under the name of a PA or NP. In order for the services to be billable under the physician’s name, the physician must perform a substantive portion of the service. For 2022, a substantive portion of the service by a physician is defined as: 1) the physician personally performing either the history, exam, or medical decision making (in its entirety), or 2) the physician spending more than half of the total time by both the physician and the PA (or NP) on face-to-face and non-face-to-face patient care activities.

For services already defined as time-based such as critical care and discharge management, the substantive portion of care can only be determined based on which health professional spent more than half the combined time providing care to the patient.

Beginning in 2023, only time will be used to define a substantive portion of care which means the health professional who spends the majority of time providing care to the patient is the one under whom the service should be billed.

Other requirements that must be met for a physician to bill a service as split/shared under their name/NPI

  • The physician and PA (or NP) must work for the same group
  • The physician and PA (or NP) must see the patient on the same calendar day
  • The services must be performed in a hospital, facility, or hospital outpatient office
  • Documentation in the medical record must identify the physician and nonphysician practitioner who performed the visit. The individual who performed the substantive portion of the visit (and therefore bills for the visit) must sign and date the medical record

CMS plan to require a modifier that will be required to be placed on split (or shared) claims to inform future policy considerations and help ensure program integrity. That modifier code has not yet been released.

Behavioral Health Flexibilities
In recognition of the toll the COVID-19 pandemic has played on behavioral/mental health, the agency finalized its proposed behavioral health flexibilities that will make it easier for Medicare beneficiaries to access needed behavioral/mental health services from PAs, physicians, and certain other health professionals. This increased access is largely achieved by expanding the ways telehealth can be used to provide behavioral/mental health services. Specifically, CMS will now include a patient’s home as an allowed originating site for mental health services after the end of the public health emergency, allow certain audio-only mental health services be provided to beneficiaries located in their home (if the beneficiary is unable, or does not wish, to use two-way audio/visual technology), and authorize RHCs and FQHCs to provide mental health visits via telemedicine. AAPA supported CMS’ proposed flexibilities and suggested further actions CMS could take, such as communicating to the commercial payers with whom CMS works about the need to eliminate unnecessary or obsolete restrictions on PAs providing behavioral/mental health.  Such policy changes would bolster the number of PAs practicing in relevant behavioral health specialties and alleviate access concerns in a time when demand is increasing.

Direct Supervision
CMS sought input on whether the temporary ability to use audiovisual communication to meet the requirements of direct supervision during the Public Health Emergency should be ended, continued, or made permanent. Typically, direct physician supervision is required when PAs and NPs deliver care in the office or clinic under Medicare’s “incident to” billing provision with PA- or NP-provided services being billed under the name of a physician. AAPA provided comments to CMS opposing the use of direct supervision via audiovisual communication as it relates to PAs and NPs out of concern that it would increase “incident to” billing. “Incident to” billing “hides” the professional services of both PAs and NPs and leads to a lack of transparency in data collection and analysis.  CMS decided to make no changes or decisions regarding this issue until a later date. Note that “incident to” billing is an option and not a requirement under Medicare. PAs (and NPs) always have the authority to submit claims for their services under their own name and NPI number with reimbursement at 85 percent of the physician payment. In our comments to CMS, AAPA was not opposed to allowing direct supervision by audiovisual communication for professionals such as registered nurses, medical assistants and other health personnel who do not have the ability to bill the Medicare program.

RHC and FQHC-employed Hospice Attending Physicians
CMS is implementing Section 132 of the Consolidated Appropriations Act of 2021 that will allow both Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) to receive payment for hospice “attending physician” services.  PAs are considered attending physicians under the Medicare hospice benefit. Currently, PAs, physicians, and nurse practitioners (NPs) employed by or under contract with an RHC or FQHC are unable to act in the capacity of a hospice attending physician during the time they are working in an RHC or FQHC. If an RHC or FQHC-employed PA, physician or NP chose to provide hospice attending physician services, it was required that those hospice services be delivered outside of their hours worked at the RHC or FQHC, not conflict with an employment agreement, and not violate Medicare prohibitions on comingling. The policy finalized in the 2022 Physician Fee Schedule will remove restrictions on RHC- or FQHC-employed or contracted PAs, physicians and NPs providing hospice attending physician services while working at the RHC or FQHC, and these centers will be authorized to receive payment for such services under the RHC all-inclusive rate and FQHC prospective payment system, respectively. AAPA requested CMS also modify hospice policies that are restrictive of hospice-employed PAs, but CMS determined such policies outside the scope of the current rule.

Rural Health Clinic (RHC) Payment Rate Increases
Certified rural health clinics are paid on a per visit/encounter basis as opposed to being reimbursed on a fee-for-service methodology for each individual service provided. RHCs have a payment limit or cap on the maximum amount that will be paid per visit. Currently enrolled independent RHCs (typically owned by PAs and physicians) and provider-based RHCs in larger hospitals will receive an increase in their per visit payment limit over an 8-year period (2021-2028). After that 8-year period, the per visit limit will be updated each year by the percentage increase in Medicare Economic Index (MEI).

Medicare Conversion Factor Cuts
Due to pre-established payment methodologies, a series of standard technical proposals and the expiration of a 3.75 percent legislative payment bump implemented in 2021, CMS lowered the Medicare payment conversion factor from $34.89 to $33.59 for 2022, a decrease of approximately 3.7 percent. This decrease impacts all health professionals. Unless Congress acts before January 1, 2022, additional Medicare payment cuts of nearly 10 percent are scheduled to take effect.

For additional information contact AAPA’s Reimbursement Team at [email protected].

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