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The Final Rule for 2022: What’s New and How Changes in the Medicare Physician Fee Schedule and Quality Payment Program Affect Dermatologists

Cutis. 2022 February;109(2):80-81,89 | doi:10.12788/cutis.0448

The Centers for Medicare & Medicaid Services (CMS) 2022 final rule, which went into effect on January 1, 2022, contains updates affecting the practice of dermatology. This article reviews many of the changes to the Medicare Physician Fee Schedule (PFS) and Quality Payment Program (QPP) and their impact on clinical practice.

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Practice Points

The Centers for Medicare & Medicaid Services (CMS) 2022 final rule contains multiple updates affecting the practice of dermatology.
Adjustments to the conversion factor and legislative-level actions have led to changes in reimbursement for many procedures within dermatology and beyond.
Other notable updates include refining the definition of split evaluation and management visits, clinical labor pricing, and billing for physician assistant services.
Changes in the Merit-Based Incentive Payment System (MIPS), cost measures, and MIPS value pathways also will impact many dermatology practices.

References

Medicare Program; CY 2022 payment policies under the Physician Fee Schedule and other changes to part B payment policies; Medicare Shared Savings Program requirements; provider enrollment regulation updates; and provider and supplier prepayment and post-payment medical review requirements. Fed Regist. 2021;86:64996-66031. To be codified at 42 CFR §403, §405, §410, §411, §414, §415, §423, §424, and §425. https://www.federalregister.gov/documents/2021/11/19/2021-23972/medicare-program-cy-2022-payment-policies-under-the-physician-fee-schedule-and-other-changes-to-part
Centers for Medicare & Medicaid Services. CMS physician payment rule promotes greater access to telehealth services, diabetes prevention programs. Published November 2, 2021. Accessed January 10, 2022. https://www.cms.gov/newsroom/press-releases/cms-physician-payment-rule-promotes-greater-access-telehealth-services-diabetes-prevention-programs
Centers for Medicare & Medicaid Services. Calendar year (CY) 2022 Medicare Physician Fee Schedule proposed rule. Published July 13, 2021. Accessed January 10, 2022. https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2022-medicare-physician-fee-schedule-proposed-rule
American Academy of Dermatology. Dermatology World Weekly. October 27, 2021. Accessed January 20, 2022. https://www.aad.org/dw/weekly
O’Reilly KB. 2022 Medicare pay schedule confirms Congress needs to act. American Medical Association website. Published November 10, 2021. Accessed January 10, 2021. https://www.ama-assn.org/practice-management/medicare-medicaid/2022-medicare-pay-schedule-confirms-congress-needs-act
History of Medicare conversion factors. American Medical Association website. Accessed January 19, 2022. https://www.ama-assn.org/system/files/2021-01/cf-history.pdf
American Academy of Dermatology. Dermatology World Weekly. December 15, 2021. Accessed January 20, 2022. https://www.aad.org/dw/weekly
American Medical Association. CY 2022 Medicare Physician Fee Schedule (PFS) and Quality Payment Program (QPP) final rule summary. Accessed January 10, 2021. https://www.ama-assn.org/system/files/2022-pfs-qpp-final-rule.pdf
Centers for Medicare & Medicaid Services. January 2022 alpha-numeric HCPCS file. Updated December 20, 2021. Accessed January 20, 2022. https://www.cms.gov/Medicare/Coding/HCPCSReleaseCodeSets/HCPCS-Quarterly-Update
CMS finalizes Medicare payments for 2022. American Academy of Dermatology website. NEED PUB DATE. Accessed January 20, 2022. https://www.aad.org/member/practice/mips/fee-schedule/2022-fee-schedule-final

On November 2, 2021, the Centers for Medicare & Medicaid Services (CMS) released its final rule for the 2022 Medicare Physician Fee Schedule (PFS) and the Quality Payment Program (QPP).^1,2 These guidelines contain updates that will remarkably impact the field of medicine—and dermatology in particular—in 2022. This article will walk you through some of the updates most relevant to dermatology and how they may affect your practice.

Process for the Final Rule

The CMS releases an annual rule for the PFS and QPP. The interim rule generally is released over the summer with preliminary guidelines for the upcoming payment year. There is then a period of open comment where those affected by these changes, including physicians and medical associations, can submit comments to support what has been proposed or advocate for any changes. This input is then reviewed, and a final rule generally is published in the fall.

For this calendar year, the interim 2022 rule was released on July 13, 2021,³ and included many of guidelines that will be discussed in more detail in this article. Many associations that represent medicine overall and specifically dermatology, including the American Medical Association and the American Academy of Dermatology, submitted comments in response to these proposals.^4,5

PFS Conversion Factor

The PFS conversion factor is updated annually to ensure budget neutrality in the setting of changes in relative value units. For 2022, the PFS conversion factor is $34.6062, representing a reduction of approximately $0.29 from the 2021 PFS conversion factor of $34.8931.⁶ This reduction does not take into account other payment adjustments due to legislative changes.

In combination, these changes previously were estimated to represent an overall payment cut of 10% or higher for dermatology, with those practitioners doing more procedural work or dermatopathology likely being impacted more heavily. However, with the passing of the Protecting Medicare and American Farmers from Sequester Cuts Act, it is estimated that the reductions in payment to dermatology will begin at 0.75% and reach 2.75% in the second half of the year with the phased-in reinstatement of the Medicare sequester.^4,5,7

Clinical Labor Pricing Updates

Starting in 2022, the CMS will utilize updated wage rates from the US Bureau of Labor Statistics to revise clinical labor costs over a 4-year period. Clinical labor rates are important, as they are used to calculate practice expense within the PFS. These clinical labor rates were last updated in 2002.⁸ Median wage data, as opposed to mean data, from the US Bureau of Labor Statistics will be utilized to calculate the updated clinical labor rates.

A multiyear implementation plan was put into place by CMS due to multiple concerns, including that current wage rates are inadequate and may not reflect current labor rate information. Additionally, comments on this proposal voiced concern that updating the supply and equipment pricing without updating the clinical labor pricing could create distortions in the allocation of direct practice expense, which also factored into the implementation of a multiyear plan.⁸

The Final Rule for 2022: What’s New and How Changes in the Medicare Physician Fee Schedule and Quality Payment Program Affect Dermatologists

References

Process for the Final Rule

PFS Conversion Factor

Clinical Labor Pricing Updates

Pages

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