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2022 Medicare physician fee schedule became effective Jan. 1

2022 Medicare physician fee schedule became effective Jan. 1

The College’s Advocacy Council, along with other organizations, has been successful in advocating for legislation to alter Medicare physician payment cuts scheduled to begin Jan. 1. The legislation required a recalculation of allergy reimbursements. The Advocacy Council developed a spreadsheet that compares 2022 reimbursement and relative value units (RVUs) to 2021. (Note – our calculations do not consider geographic adjustments.) You can view specific 2022 RVUs for allergy codes. RVUs for each CPT code are published annually on the Centers for Medicare and Medicaid Services’ (CMS) website.

In the spreadsheet of RVUs for all Current Procedural Terminology (CPT) codes of most interest to allergists are the Physician Work RVUs (column F). Health systems and employers often use these RVUs in their compensation formulas. Also note the Total Non-Facility RVUs for the code (column J). This includes all three components – physician work, practice expense and professional liability insurance when performed in the physician office setting.

When a service is performed in the hospital setting (e.g., the hospital outpatient department or hospital-based clinic), the RVUs are reduced because the practice expense portion of the service is provided by the hospital (see the Total Facility RVUs in column K).

As a result of legislation enacted by Congress in December 2021, there is a temporary one-year increase in the Medicare physician fee schedule reimbursement of 3% above what was originally proposed for 2022. In practical terms, this means that the previously scheduled 3.75% decrease will result only in a .75% decrease. The new 2022 conversion factor is $34.6062. (The conversion factor is multiplied by the RVUs to calculate the dollar reimbursement amount.) The estimated impact of these and other adjustments on the allergy/immunology specialty is 0.8% overall decrease in Medicare payments for 2022, compared to 2021.

The same legislation will temporarily delay the looming cuts associated with the Statutory Pay-As-You-Go (PAYGO) legislation, delaying the budgetary impact of legislation enacted in 2021 to 2023. The PAYGO cuts were previously set to go into effect at 4% (impacting Medicare and other programs including social services, farm programs, and more) on Jan. 1, 2022.

In addition, the 2% Medicare sequestration cuts scheduled to go into effect Jan. 1 have been delayed through March 31, 2022. Furthermore, the legislation will reduce the amount of the sequester cuts for the following quarter, resulting in a 1% reduction from April 1 – June 30, 2022. On July 1, the full 2% sequester is set to go back into effect. We have heard that Congress may take this issue up again in early 2022 with the goal of extending some of these fixes. However, without Congressional action, the allergy/immunology specialty could see a decrease in Medicare reimbursement of up to 9.5% in 2023.

We will continue to monitor these issues and keep you informed of developments. In the meantime, here is the current timeline for the upcoming cuts:

Jan. 1, 2022: Providers paid under the Medicare PFS will, in effect, receive a cut of approximately 0.75% in payments from 2021 rates.

April 1, 2022: A 1% Medicare sequester cut goes into effect.

July 1, 2022: The Medicare sequester cut increases to 2%.

Jan. 1, 2023: Many cuts come back into effect:

  • The one-year 3% PFS boost expires, resulting in a 3% cut from 2022 rates.
  • The 4% cuts to Medicare (and other programs) associated with the PAYGO impact of 2021 legislation kicks-in (plus any additional legislation enacted in 2022).

To determine the exact amount of your Medicare reimbursement for 2022, you should check your Medicare Administrative Contractor’s website for the fee schedule applicable to your geographic area. Updated information is expected to be available on the website soon.

RVU Background
RVUs were developed by CMS about 30 years ago in response to congressional legislation to establish the relative value of physician services. The American Medical Association’s Relative Value Update Committee (RUC) proposes RVUs based on specialty society surveys and provides recommendations to CMS for consideration. CMS decides whether it will accept the RUC’s recommendations.

The Advocacy Council – ADVOCATING FOR ALLERGISTS AND THEIR PATIENTS.

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