Podcast Episode 8: CMS Update 2022

Episode Summary: CMS released their Calendar Year 2022 Medicare Physician Fee Schedule Final Rule on November 2nd. There are significant changes to the PFS conversion factor, billing for Shared/Split inpatient services, Critical Care services, Telehealth services, and Colorectal Screening procedure co-insurance payments among others. Hosts Neal Sheth and Dr. Piyush Sheth try to make sense of these changes and how they affect documentation, coding, and billing.

Show Links:

CMS CY2022 MPFS Final Rule

Summary of CMS CY2022 MPFS Final Rule

Episode Transcript

INTRO: How can the complexities of medical documentation and coding be simplified? Can healthcare providers and professional medical coders maintain efficiency in an environment of ever-increasing complexity? This is Unraveling Medical Coding. You’ll learn how to improve documentation, code intelligently, and minimize audit risk. Here are our hosts and Certified General Surgery Coders, Neal and Piyush Sheth.

NEAL: Hi dad.

PIYUSH: Hey Neal.

NEAL: Well, it’s that special time of year! The holidays are here, with a new year right around the corner. And you know what that means: it’s time for CMS Physician Fee Schedule Rule Changes! On November 2, CMS released its Calendar Year (CY) 2022 Medicare Physician Fee Schedule (MPFS) Final Rule in a 1,036-page document. Thankfully, we won’t be going over all of it today. But, if you want a link to the full document and the summary of changes document, follow the links in our Show Notes.

The Final Rule contains a host of changes, but today we’re going to be focused on changes to the Conversion Factor, Shared/Split Facility Visits, Critical Care services, Telehealth services, and Coinsurance for Colorectal screening procedures.

Let’s start with the Conversion Factor changes. What are we looking at?

PIYUSH: A little background first Neal. Since 1992, Medicare physician payments utilize relative value units (RVU’s) that reflect work, practice expense, and malpractice expense. RVU’s are affected by a Geographic Practice Cost Index (GPCI) based on where you practice in the United States. The RVU’s eventually translate into payment amounts by multiplying it with a Conversion Factor. The 2020 Conversion Factor was $36.09. For 2021, due to CMS’s decision to increase payments for Office and Outpatient Evaluation and Management Services (see Episode 2 of our podcast), Medicare proposed a steep cut of about 10% down to $32.26 in the Conversion Factor to comply with the budget neutrality mandate. Congress was able to offset this by temporarily adding back 3.75% to the Conversion Factor via the Consolidated Appropriations Act of 2021. The Conversion Factor for 2021 was finally set at $34.89. For 2022, Medicare is proposing a new Conversion Factor that reflects in part the expiration of the congressional 3.75% temporary lifeline. The proposed Conversion Factor was $33.59, but on December 9, 2021, Congress passed an 11th hour reprieve bill to increase the Conversion Factor by 3% to 34.60. POTUS is expected to sign the bill.

NEAL: So, we have another temporary reprieve from massive cuts?

PIYUSH: Yes. Let’s put some perspective on this. In 2014, the conversion factor was $35.82. CMS is essentially proposing a conversion factor less than it was 8 years ago. And don’t forget that on the RVU side of the equation, Medicare has been bundling some codes as well as decreasing values for most CPT codes throughout all these years. The result is decreasing payments to healthcare providers and institutions. In contrast, the cost of doing business and inflation is rising. The cost of medical equipment is also rising especially in surgery with the wider adoption of technology like robotics. In any profession, can you imagine income dropping and costs increasing? Healthcare providers and institutions have been trying to deal with payment cuts and the rising cost of doing business for quite some time and I’m sure you’re aware of how this has changed the healthcare landscape by making it much more difficult for smaller practices and institutions to survive. Larger institutions due to economy of scale have been able to weather the economic impact relatively reasonably but most have cut overhead in a wide variety of areas. In surgery, we often see cheaper products being substituted for higher quality costlier products. I’ll give it to you that maybe healthcare payments were overvalued and are just resetting to a more reasonable level, but the squeeze is undeniable.

NEAL: I get it dad, but look at it from CMS’ perspective. Healthcare costs are rising and there has not been a corresponding increase in the health of patients. Effectively, this means that taxpayers and the average person are paying more for healthcare without seeing any benefits. Don’t these cuts force physicians and hospitals to rethink the delivery of healthcare from being reactive to being proactive and promoting prevention strategies?

PIYUSH: You are absolutely right. There is a good motive. Unfortunately, some consequences were not foreseen. For example, a lot of small community hospitals have closed due to the inability to contain costs and stay profitable. So, what happens to patients in those communities when they fall ill? They may have to commute a farther distance to get healthcare. And how about the patient who has surgery where a cheaper device was used and who has a complication? Who should shoulder the responsibility of that patient’s care?

NEAL: Good points. Let’s switch gears and talk about the 2022 changes that affect clinical practice and billing. Shared/split services. In July, CMS had initially proposed that shared/split services in a facility setting would be billed by the provider who provided care for more than 50% of the total time. During the comment period for the proposed rule, multiple organizations voiced their concerns and CMS has modified this in the final rule to state that in 2022, there will be a transition period but in 2023 this will be fully implemented. What are your thoughts?

PIYUSH: Again, let’s start with some background. Until now, shared/split services between a physician and a non-physician practitioner, NPP, in the same group were billed by the physician if he documented that he performed a substantive portion of the history, physical exam, or medical decision making. The definition of substantive portion was “all or some portion of”. Since NPPs bill at 85% of the physician fee schedule and physicians at 100%, physicians found that leveraging shared/split services with NPPs was a way to deliver healthcare to more patients and receive a higher payment.

For 2022, shared/split services can still be billed by the physician using the substantive portion track but now they can also use the >50% of the total time track. And, CMS redefined what a “substantive portion” is. It is no longer defined as “all or some portion of”. The new definition of “substantive portion” states that one of the three components, history, physical exam, or medical decision making in its entirety must be used in determining the billing level. And, only one of the providers must have face-to-face direct patient contact. The substantive portion definition does not mandate direct patient contact by the physician. This means that in 2022, if a NPP performs the history and physical exam, and the physician performs the medical decision making, then the shared/split service could be billed by the physician at 100% even if the physician did not have any face-to-face interaction with the patient.

NEAL: What about using time for billing shared/split services?

PIYUSH: When using time, the provider that provided >50% of the total time of the visit would bill for shared/split service. The distinct time each provider spent furnishing their portion of the visit would be summed to determine the total time. Overlapping time spent by both providers would only be counted once. The activities that would count towards time would include the following which aligns with the time billing definitions set forth for Office/Outpatient service billing:

  • Preparing to see the patient (eg, reviewing tests)

  • Obtaining/reviewing separately obtained history

  • Performing a medically appropriate exam or evaluation

  • Counseling and educating the patient/family/caregiver

  • Ordering medications, tests, or procedures

  • Referring and communicating with other health care professionals

  • Documenting clinical information in the EMR

  • Independently interpreting results and communicating to the patient/family/caregiver

  • Care coordination

NEAL: Alright. So, CMS is trying to make time-based billing more standardized. Is there anything else we need to know about shared/split services?

PIYUSH: There are some minor requirements that appear in the Final Rule. Shared/split service billing can be used for new and established visits, initial and subsequent visits, and prolonged services. The medical record should identify both providers and the billing provider must sign and date it and attach the new modifier FS, indicating that it was a shared/split visit.

NEAL: What about Critical Care services?

PIYUSH: Critical care services in the past could not be performed as shared/split services, but now they can be furnished as shared/split services but only using the >50% of total time track since critical care service billing is time-based. These services cannot be billed using the substantive portion track. The new modifier FS would have to be appended to all claims billed as shared/split Critical Care services.

NEAL: To summarize, shared/split services have a new definition of “substantive portion” and they can also be billed using the >50% of total time rule but in 2023, the “substantive portion” clause goes away. Critical care services can now be shared/split but billing would be based solely on the >50% of total time provision.

PIYUSH: I want to take a brief detour here. If you haven’t already, please listen to Episode 2 of our podcast regarding Office/Outpatient Coding. In it I mentioned that time is difficult to keep track of especially since healthcare providers are always multitasking. Sometimes I am dealing with multiple patients at the same time where my focus on any one patient is intermittent. Keeping track of time spent with any one particular patient, especially when it is fragmented is difficult at best. Also, each person’s perception of how fast time is passing is different. Perception of time is subjective whereas measurement of time is objective. When people are asked to signal when they feel 2 minutes have passed, the results are all over the board. Transitioning to time-based billing is fraught with inaccuracy unless there is a way to measure the time spent on each patient, whether the time is contiguous or fragmented. For providers listening to this podcast, keep this in mind.

NEAL: Very interesting detour. Let’s again switch gears. How about Telehealth services? Due to the COVID-19 Public Health Emergency (PHE), CMS temporarily added certain telehealth services to the Medicare telehealth service list. What changes will we see here?

PIYUSH: CMS is extending through the end of 2023 the inclusion of certain telehealth services that would have been removed from the list at the end of this year. If a provider has the ability to conduct audio-video telehealth services, then that must be used. CMS is limiting the use of an audio-only interactive telehealth services to those providers that do not have audio-video capabilities or to mental health services where the patient is not capable of audio-video communication or does not consent to it. There are other requirements for mental health services including one requiring there be an in-person non-telehealth visit within 6 months prior to the telehealth visit and at least every 12 months thereafter. I’ll direct our listeners who are interested in more information regarding this to go to the Summary of the Final Rule link in our show notes.

NEAL: OK. Now our final topic. Coinsurance for Colorectal Cancer Screening procedures. I thought patients did not have to pay coinsurance if the procedure was for colorectal cancer screening.

PIYUSH: This is a widespread misconception so let’s clarify this. Sometimes we begin a colonoscopy with the intent that it is a screening procedure but during the procedure a polyp or lesion is found that requires polypectomy or biopsy. This procedure is then considered a diagnostic procedure and would result in the patient having to pay coinsurance. In the Final Rule, CMS sets the coinsurance payment to be 20% for 2022, 15% from 2023 to 2026, 10% from 2027 to 2029, and 0% from 2030 onwards. This is fantastic news for patients.

NEAL: Yeah. Sounds great for patients. Well, only time will tell if all the changes in the Final Rule benefit or hinder the delivery of healthcare. Nonetheless, we must all prepare for them.

OUTRO: We hope you enjoyed this episode. If you want to find more episodes of Unraveling Medical Coding, just search for and subscribe to Unraveling Medical Coding wherever you listen to podcasts. You can also rate the podcast and leave us a review on Apple Podcasts. Please share this podcast with friends or colleagues who you feel would benefit from learning about medical documentation and coding.

This podcast was produced by Coding Solutions, LLC. You can also find our books, Coding Solutions General Surgery, and Starting Medical Practice on Amazon.

Stay safe and healthy this Holiday Season.

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Podcast Episode 9: Modifiers (Part I)

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Podcast Episode 7: Building a Better EMR (EMR Part II)