Radiology Coding Alert

Plus: Check out this updated clinical labor pricing after 20 years.

Has your radiology practice been sweating awaiting news of a decreased conversion factor (CF) in 2022? If so, you may be right to be concerned, but it may not be as bad as you think.

The Centers for Medicare and Medicaid Services (CMS) issued the Calendar Year (CY) 2022 Medicare Physician Fee Schedule (MPFS) final rule on November 2, 2021, and here’s how it could affect your radiology practice’s reimbursement.

Prepare for a Decreased Conversion Factor in CY 2022

Heading into CY 2022, CMS proposed a CF of $33.5848, but after public comments, they finalized a CF of $33.5983. This is still a lower value than the CY 2021 CF of $34.8931 by $1.2948. The MPFS Final Rule indicates CMS arrived at the CY 2022 CF using the CY 2021 CF without the 1-year, 3.75 percent increase provided by the Consolidated Appropriations Act (CAA) and multiplied it by the budget neutrality (BN) adjustment.

Public response: The significant CF reduction as the COVID-19 PHE continues hasn’t gone unnoticed by healthcare organizations. The American Medical Association (AMA) is urging Congress to act to prevent further financial casualties.

“The AMA is strongly advocating for Congress to avert this and other looming cuts to Medicare physician payments that, overall, will produce a combined 9.75 percent cut for 2022. This comes at a time when physician practices are still recovering the personal and financial impacts of the COVID public health emergency,” says AMA President, Gerald E. Harmon, MD, in a statement. “Congress is beginning to recognize that this financial instability could limit health care access for Medicare patients” (URL: www.ama-assn.org/press-center/press-releases/ama-statement-physician-fee-schedule-final-rule).

According to CMS, the finalized Physician Fee Schedule’s estimated overall impact on radiology services is:

• Radiology: 1 percent decrease
• Interventional radiology: 5 percent decrease
• Nuclear medicine: 1 percent decrease
• Radiation oncology: 1 percent decrease
• Radiation therapy centers: 1 percent decrease

CMS cites the decreased value is due in part to changes in RVUs, phase-in implementation of the previously finalized updates to supply and equipment pricing, and the redistributive effects of the CMS proposed clinical labor pricing update.

Understand the Clinical Labor Pricing Updates

In the MPFS proposed rule released earlier this year, CMS proposed a 4-year implementation of clinical labor pricing updates to begin in 2022 and end in 2025. According to CMS, the supply and equipment prices for practice expenses have incrementally updated since 2019 and CY 2022 marks the final year of the transition. Startlingly, while the prices for supply and equipment have increased over the previous four years, clinical labor rates haven’t changed since CY 2002.

With the implementation of equipment and supply inputs fully transitioned in 2022, CMS is proceeding with updating clinical labor pricing. CMS also adjusted their methodology for updating the clinical labor pricing rates by:

• Applying 2019 fringe benefits multiplier instead of using the 2002 benefits multiplier;
• Using Bureau of Labor Statistics median wage data instead of the mean wage data; and
• Updating or adjusting select proposed clinical labor wage crosswalks.

Objection to the ruling: “The ACR is disappointed that CMS chose to move forward with the 4-year implementation of the clinical labor pricing updates,” said the American College of Radiology in their summary of the MPFS final rule (URL: www.acr.org/-/media/ACR/Files/Advocacy/2022-MPFS-Final-Rule-Preliminary-Summary.pdf). However, while certain radiology specialties voice displeasure with the clinical labor pricing update news, their comments help cut the estimated impact of the MPFS in half.

With the adjustments to the clinical labor pricing dispersed over the implementation period, radiology services will see the following estimated impacts:

• Radiology: -1 percent (proposed to be -2 percent)
• Nuclear medicine: -1 percent (proposed to be -2 percent)
• Interventional radiology: -5 percent (proposed to be -9 percent)
• Radiation oncology: -1 percent (proposed to be -5 percent)
• Radiation therapy centers: -1 percent (proposed to be -5 percent)

CMS acknowledges these specialties possess “proportionally higher supply or equipment item costs,” which negatively affect the specialties when coupled with the clinical labor pricing updates.

In finalizing the proposal over four years, CMS believes the transition “will help to maintain payment stability, particularly given the ongoing public health emergency (PHE) for COVID-19.”

Additionally, while CMS has finalized the 4-year implementation, they do welcome “additional feedback on clinical labor pricing from commenters in next year’s rulemaking cycle, especially any data that will continue to improve the accuracy of our finalized pricing.”

The final rule was published in the Federal Register on November 19, 2021,and is available at 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.