On December 16, 2021, the Centers for Medicare and Medicaid Services (CMS) announced an updated CY 2022 physician conversion factor (CF) of $34.6062
While this represents a 0.82% cut from the CY 2021 CF of $34.8931, it reflects an increase from the initial CY 2022 physician CF of $33.5983 announced in the CY 2022 Medicare Physician Fee Schedule (PFS) Final Rule. The updated Anesthesia CF is $21.5623.
CMS implemented this change in response to the Protecting Medicare and American Farmers from Sequester Cuts Act, signed into law on December 10, 2021. In addition to mitigating the cut to the Medicare CF, this bipartisan legislation staved off other Medicare cuts, including a phased-in delay of the Medicare and PAYGO sequestration cuts that impact all Medicare payments. Without legislative action, providers could have faced a 4% across-the-board PAYGO reduction, a 2% sequestration cut and a 3.75% cut to Part B services under the PFS.
These fixes are only in effect for 2022 and, in the case of Medicare sequestration, will be phased out starting April 1, 2022. Further congressional action for 2022 is possible, setting up a potential end-of-year Medicare bill in which 2023 cuts could be addressed in late 2022, after the 2022 midterm elections. Many other unaddressed Medicare priorities could also be on the table at that time.
Absent congressional actions, a 9.75% cut was scheduled effective January 1, 2022.
| Cuts | Phase 1 Jan. – Mar., 2022 | Phase 2 Apr. – Jun., 2022 | Phase 3 Jul. – Dec., 2022 |
|---|---|---|---|
| Medicare Physician CF* Reduction | |||
| Medicare Sequestration | |||
| PAYGO Sequestration | |||
| TOTAL Cuts Across the Board** |
*Congress reduced 3% of the scheduled 3.75% cut to the Medicare Physician CF.
**Merit-based Incentive Payment System eligible clinicians may also be subject to a positive, negative or neutral adjustment to their CF.
The legislation also included a one-year delay in the scheduled cuts to clinical laboratory services and a one-year delay on scheduled reporting requirements under the Protecting Access to Medicare Act of 2014. It also delayed implementation of the mandatory Medicare radiation oncology alternative payment model for one year (through December 31, 2022) in response to stakeholder requests, citing the impact of the pandemic, the timing of the model’s effective date, and concerns about downward funding pressure while providers are still addressing COVID-19.
