Published 9/27/2021
Alix Braun, MPH

CMS’ Proposed Payment Policy Changes for 2022 Are Significant

In July, the Centers for Medicare & Medicaid Services (CMS) released the highly anticipated proposed rules for the calendar year (CY) 2022 Medicare Physician Fee Schedule (PFS) and the CY 2022 Hospital Outpatient Prospective Payment System/Ambulatory Surgical Center Payment System (OPPS/ASC). The two payment rules, which are published annually, propose significant changes to the landscape of musculoskeletal care.

Medicare PFS

In the CY 2022 Medicare PFS, CMS is proposing to reduce the conversion factor, which is the primary factor determining increases or decreases to overall payment rates in the PFS, by 3.75 percent from $34.89 to $33.58. This change is largely a result of the planned expiration of the 3.75 percent increase that was implemented through Congressional action at the end of 2020 in the Consolidated Appropriations Act. More specifically, the estimated combined impact of the proposed policy changes for 2022 and the conversion factor reduction will be a 2.7 percent total decrease to the 2022 allowed charges for orthopaedic surgery. AAOS is actively working across the legislative and regulatory landscape to prevent this 3.75 percent cut, as well as other cuts to Medicare reimbursements scheduled to take effect in 2022. The proposed rule also fails, once again, to extend the evaluation and management (E/M) office/outpatient visit updates from the 2020 rule (effective Jan. 1, 2021) to the global surgical codes.

Other proposed changes include:

  • allowing physician assistants (PAs) to bill directly for services furnished under Medicare Part B
  • covering services that were temporarily added to the Medicare telehealth list during the public health emergency until the end of 2023, to give the agency sufficient time to gather utilization data and stakeholder input before deciding which services should permanently be added to the telehealth list
  • delaying, once again, the implementation of the appropriate use criteria (AUC) for advanced diagnostic imaging until at least Jan. 1, 2023
  • continuing to delay the compliance requirement for electronic prescribing of controlled substances for a covered Part D drug

CMS also proposed implementing the Merit-based Incentive Payment System (MIPS) Value Pathways (MVPs) beginning in 2023 instead of 2022, and eventually sunsetting the traditional MIPS program while making the MVP reporting mandatory. CMS has put forth an introductory set of seven MVPs to be reportable starting with Performance Year 2023, one of which is aimed at lower-extremity joint replacement. AAOS continues to work closely with CMS and other relevant specialty societies to provide feedback about the design of the lower-extremity joint replacement MVP.

The proposed rule also states, “Beginning with the 2023 MIPS performance period/2025 MIPS payment year, Qualified Clinical Data Registries (QCDRs) and qualified registries must support MVPs that are applicable to the MVP participants on whose behalf they submit MIPS data. QCDRs and qualified registries may also support the APM Performance Pathways.”

Many of the delays in implementation of the above-mentioned programs stem from the upheaval precipitated by the public health emergency. However, AAOS is advocating for permanent implementation of certain policies (such as telehealth flexibilities) and permanent reversal of others (such as the AUC program) given the emerging post-pandemic healthcare landscape.


In the CY 2022 OPPS/ASC proposed rule, CMS is proposing to drastically reverse course on policies finalized just last year that will once again shift the landscape of the outpatient setting. Specifically, the agency is proposing to reverse the elimination of the inpatient-only (IPO) list. If finalized, this action would begin with placing the 266 musculoskeletal services removed for 2021 back on the IPO. It is important to note that this proposal will not impact total hip and knee arthroplasty, as those procedures were removed from the IPO prior to 2021.

Relatedly, in the CY 2021 final rule, CMS determined that surgical procedures could be added to the Ambulatory Surgical Center Covered Procedures List (ASC-CPL) according to a limited set of criteria. The decision specifically excluded the following criteria, which had been used to guide this decision in CY 2020 and years prior: generally result in extensive blood loss, require major or prolonged invasion of body cavities, directly involve major blood vessels, generally emergent or life-threatening in nature, and commonly require systemic thrombolytic therapy. As a result of that change, 267 surgical procedures were added to the ASC-CPL for CY 2021. In this proposed rule, however, CMS has now determined that 258 of these procedures “pose a significant safety risk” to the average Medicare beneficiary and subsequently proposed to reinstate the above criteria as factors which must be considered prior to adding a surgical procedure to the ASC-CPL.

CMS is also proposing the following:

  • eliminating the indefinite exemption from the site-of-service claim denials under the two-midnight rule and returning to the policy of a two-year exemption for procedures removed from the IPO, given the plan to reverse the elimination of the IPO
  • implementing civil monetary penalties based on a scaled approach for hospital noncompliance with price-transparency initiatives implemented in 2021, a program for which CMS has faced significant noncompliance thus far
  • expanding efforts to promote health equity, similar to the proposals made in the Medicare Hospital Inpatient Prospective Payment System proposed rule, by potentially stratifying the performance results of six priority quality measures by dual Medicare-Medicaid eligibility status (including MRI Lumbar Spine for Low Back Pain and Hospital Visits after Hospital Outpatient Surgery)

In response to the proposed reversal to the IPO list changes, AAOS President Daniel K. Guy, MD, FAAOS, issued an initial statement: “AAOS is encouraged to hear that CMS has heeded the patient safety concerns of the physician community regarding the abrupt elimination of the IPO list. We continue to support the removal of procedures which have been proven to be done safely in the outpatient setting; however, there is much work left to be done to clarify what these changes mean in order to avoid widespread confusion and unintended consequences for patient care. Orthopaedic surgeons know firsthand from their experience with total knee arthroplasty removal in 2018, total hip arthroplasty in 2020, and then the removal of all musculoskeletal procedures in 2021 how challenging such a dramatic shift can be to safe and timely musculoskeletal care.”

He reiterated AAOS’ concerns: “Now as the agency reassesses how it will evaluate future procedures for removal and the longer-term plan for the IPO, it should place more emphasis on physicians leading those decisions and prioritize the value of patient choice. CMS must also be careful to avoid creating new regulatory barriers to determining the appropriate setting of care as an overcorrection to the policy reversal—especially now after the country has benefited from such flexibilities and individualized medicine during the COVID-19 pandemic.

“Transparency around these changes and input from the medical community are critical to the successful implementation of the rule,” Dr. Guy continued. “We look forward to commenting on the proposal in greater detail and offering our formal comments later this year on behalf of the musculoskeletal community.”

AAOS will be responding to these significant changes in its formal comments to the agency, due in mid-September, which will be shared with members. For more detail on the proposed rules and to read the MFPS and OPPS Fact Sheets, visit www.aaos.org/advocacy/federal-advocacy-issues/medicare-payment--cms.

Alix Braun, MPH, is a regulatory advocacy manager in the AAOS Office of Government Relations.