On July 13th, the Centers for Medicare & Medicaid Services (CMS) issued proposals to update the Medicare physician fee schedule payments and policies for 2022 – available HERE. Beyond payment policies, the rule also includes many proposals to implement changes to the quality payment program (QPP) and a proposed delay to the implementation of the Appropriate Use Criteria (AUC) program until 2023.

Conversion Factor

The proposed conversion factor updates for 2022 reflects several different factors, some of which result from policy changes implemented last year.

In 2021, the passage of the Consolidated Appropriations Act of 2021 (CAA) provided a +3.75% increase in the conversion factor which offset the cuts related to adopting evaluation and management coding changes as finalized by CMS.

The 2022 Conversion Factor accounts for the expiration of the CAA, as well as the annual required budget neutrality adjustments (which CMS has calculated at -.14%).  The resulting decrease to the conversion factor is noted here:

  • Proposed Medicare Fee Schedule CF: $33.58
    • Decrease of -$1.31 from 2021 CF of $34.89
  • Proposed Anesthesia CF: $21.04
    • Decrease of -$.52 from 2021 CF of $21.56




Practice Expense RVU Malpractice Expense RVU

Combined Impact


0% 1% 0% 1%

Nurse Anes / Anes Asst

0% 1% 0% 1%


0% 1% 0% 1%


0% -2% 0% -2%
Radiation Oncology/Radiation Therapy 0% -5% 0%


Nuclear Medicine 0% -1% 0%


Interventional Radiology 0% -9% 0%


Pathology 0% -1% 0%



*Full specialty impact table is available within the proposed rule – Be aware that different billing arrangements may influence the final outcomes of CMS’s estimated impacts.

Why is this happening?

The most widespread impacts of RVU changes are related to updates resulting from CMS’s misvalued code initiative.  Other adjustments stem from annual American Medical Association (AMA) RUC (Relative-value unit Update Committee) recommendations and updates to clinical labor pricing, which both impact the Practice Expense relative value unit.

Appropriate Use Criteria/Clinical Decision Support

CMS is proposing to begin the payment penalty phase of the program on January 1st, 2023, or the first year following the end of the COVID-19 public health emergency, whichever comes first. CMS cites implementation challenges, lack of industry readiness, and the continued impact of the pandemic as reasons to delay the penalty phase of the program, intended to begin January 1st, 2022.

The AUC program, currently in the ‘operations and testing phase’, requires ordering physicians to consult appropriate use criteria when ordering advanced imaging studies for Medicare beneficiaries.  Radiologists are required to report AUC related modifiers on relevant claims, provided by the ordering physician, for claims to be reimbursed during the eventual penalty phase of the program.

CMS notes that, based on claims data from the 2020 year of the testing period, approximately 10% of claims were considered AUC compliant to be reimbursed under the mandate. In other words, 90% of applicable claims would have been denied if 2020 had not been a testing year.

Critical Access Hospitals and AUC

Due to rules related to applicable payment systems of the AUC mandate, Critical Access Hospitals are exempt from the consultation and reporting requirements.  However, up until this newest rule, CMS had not identified how CAH would be identified within the claims process.

CMS is proposing to use the MH modifier to identify claims that are not applicable to AUC, such as Critical Access Hospitals.  Currently, the MH modifier is used to report that an ordering physician did not provide AUC documentation.

Scope of Practice

CMS is proposing to allow Physician Assistants to bill Medicare directly for professional services starting January 1st, 2022. This proposal implements sections of the CAA which authorize Medicare to make direct payment to PAs for professional services under Medicare Part B beginning January 1, 2022.

Currently, Medicare can only make payment to the employer or independent contractor of a PA.

Evaluation and Management (E/M) Coding

CMS is providing refined guidance for split/shared billing with E/M visits following the overhaul of E/M code structure enacted in the 2021 fee schedule.  CMS had initially released guidance related to split/shared billing earlier this year, but later removed that guidance after being directed to by HHS.  CMS is using this rulemaking cycle to propose the following:

  • The practitioner who provides the substantive portion of the visit (more than half of the total time spent) would bill for the visit.
  • Documentation in the medical record that would need to identify the two individuals who performed the visit. The individual providing the substantive portion must sign and date the medical record.
  • Split (or shared) visits could be reported for new as well as established patients, and initial and subsequent visits, as well as prolonged services.
  • Split (or shared) visits would be reported via a modifier on the claim for program integrity.

Removal of Select National Coverage Determinations

CMS is proposing to remove the national coverage determination (NCD) for position emission tomography (PET) scans (NCD 220.6). Removing the NCD would defer coverage decisions to local Medicare Administrative Contractors (MACs). The existing NCD for PET was last updated in 2013 and requires separate NCDs for every non-oncologic indication for PET scans. CMS believes that allowing local contractors the discretion to consider coverage would allow Medicare beneficiaries greater access to PET scans for non-oncologic indications.

Quality Payment Program (QPP/MIPS)

CMS continues to advance the Quality Payment Program (QPP) forward with many proposals related to the Merit-Based Incentive Program (MIPS) and the transition to MIPS value pathways.

CLICK HERE for a summary of proposals for the 2022 performance year.


As always, ADVOCATE will keep you up to date on this and all issues impacting medical groups as they become available.

Kayley Jaquet

Manager, Regulatory Affairs