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November 4, 2021

CMS finalizes physician, outpatient/ASC and home health final payment rules

On November 2, The Centers for Medicare & Medicaid Services (CMS) finalized three payment rules: CMS' Calendar Year (CY) 2022 Physician Fee Schedule (PFS); CY 2022 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System; and CY 2022 Home Health Prospective Payment System (PPS). Through the rules, CMS is boosting payment for hospital outpatient services by 2% and home health by 2.6% while reducing reimbursement under the physician fee schedule (PFS).

The PFS conversation factor is cut by $1.30 to $33.59 for 2022 as the temporary 3.75% reimbursement boost provided by the Consolidated Appropriations Act (CAA) expires next year. The PFS also updated clinical labor pricing, which will benefit primary care specialists; however, payment to specialties such as interventional radiology, vascular surgery, radiation oncology, and cardiology will see reduced reimbursements as a result of the payment changes. The PFS also extended certain Medicare telehealth benefits added during the pandemic through December 31, 2023, which CMS says will allow "additional time for us to evaluate whether the services should be permanently added to the Medicare telehealth services list." CMS is also expanding reimbursements for telehealth services that treat mental health issues under the rule.

As a part of the OPPS rule, CMS finalized stricter penalties for hospitals that don't comply with the hospital price transparency regulations, which went into effect January 1 of this year. "The CMS is committed to promoting and driving price transparency, and we take seriously concerns we have heard from consumers that hospitals are not making clear, accessible pricing information available online," said CMS Administrator Chiquita Brooks-LaSure in a press release. CMS is setting a minimum penalty of $300 per day for hospitals with a bed count of 30 or fewer, and a penalty of $10 per bed per day for hospitals with a bed count greater than 30, not to exceed a maximum daily dollar amount of $5,500. CMS also paused plans to phase out the inpatient only (IPO) list, which includes services that can only be performed in hospitals. The final rule also continued reductions for 340B drug discount payments and site neutral payment provisions.

The home health final rule formalized the nationwide expansion of the Home Health Value-Based Purchasing Model, starting in 2023, makes various changes to quality programs, and establishes survey and enforcement requirements for hospice programs serving Medicare beneficiaries, among other items.

Additional information is available in the attached Tax Alert.


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Washington Council Ernst & Young
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CMS final payment rules