CY 2022 Medicare Physician Fee Schedule Final Rule Extends Telehealth Benefits

Health Highlights

The Big Picture

On November 2, the Centers for Medicare & Medicaid Services (CMS) released Medicare Program; CY 2022 Payment Policies under the Physician Fee Schedule and Other Changes to Part B Payment Policies; Medicare Shared Savings Program Requirements; Provider Enrollment Regulation Updates; and Provider and Supplier Prepayment and Post-payment Medical Review Requirements (final rule). The Medicare Physician Fee Schedule (MPFS) finalizes the extension of coverage of certain Medicare telehealth services through calendar year (CY) 2023, permanently extends coverage of tele-behavioral health services delivered to patients in their homes and via audio-only technology, and finalizes changes that would allow for rural health centers (RHCs) and federally qualified health centers (FQHCs) to deliver mental health visits virtually.


Prior to the COVID-19 pandemic, statutory restrictions limited Medicare coverage to a narrow set of virtual check-in services, restricted the definition of originating sites and did not reimburse for care delivered via audio-only communications. During the pandemic, Congress, the Department of Health & Human Services (HHS) and CMS have all acted to dramatically expand access to telehealth services to combat the COVID-19 pandemic by allowing temporary statutory and regulatory telehealth flexibilities.

For example, prior to the public health emergency (PHE), Medicare covered roughly 100 telehealth services, predominately serving beneficiaries in rural areas and certain originating sites. During the PHE, Congress and CMS temporarily expanded Medicare coverage by adding 140 additional telehealth services for all beneficiaries.1 In light of the substantial growth in telehealth services during the pandemic and in acknowledgment of the critical role telehealth plays in improving health care access—spurred in part by the statutory and regulatory flexibilities put in place during the PHE—CMS is continuing to evaluate telehealth services post-PHE and has extended and expanded certain telehealth services in the CY 2022 MPFS.

Extending Coverage of Some Telehealth Services Through CY 2023

CMS is finalizing extending coverage of “Category 3” Medicare telehealth services through the end of CY 2023. Category 3 services are services with respect to which CMS has determined there is likely clinical benefit when furnished via telehealth but there is not sufficient evidence available to justify permanent coverage (unlike in the case of Category 1 or 2 services). Examples of Category 3 services include some types of home visits, level 1–3 emergency department visits, nursing facilities discharge-day management and outpatient cardiac rehabilitation services, among others. Acknowledging the need to gather more information regarding the utilization, clinical appropriateness and value of these services, CMS is finalizing covering Category 3 services through CY 2023 and facilitating submission of requests to add services permanently to the Medicare telehealth services list through the CY 2023 MPFS rulemaking process and for consideration in the CY 2024 MPFS rule.

Expanding Coverage of Tele-Behavioral Health Services

CMS is finalizing several changes to the coverage of tele-behavioral health services which will allow for these services to be delivered to Medicare enrollees in their homes and via audio-only telehealth modalities.

First, CMS is finalizing requirements set forth in the Consolidated Appropriations Act of 2021 (CAA), a bill passed in late 2020 that included dozens of health care provisions. CMS is finalizing adding a patient’s home as an eligible originating site for telehealth when used “for purposes of diagnosis, evaluation, or treatment of a mental health disorder.” In addition, in implementing the 2018 SUPPORT for Patients and Communities Act, a bipartisan bill with a range of provisions aimed at addressing the nation’s opioid epidemic, CMS is finalizing its proposal that the home be an eligible originating site “for telehealth services furnished to a patient with a substance use disorder (SUD) for treatment of that disorder or a co-occurring mental health disorder.” This means that Medicare beneficiaries will be able to access tele-behavioral health services from their homes on a permanent basis. We note that this change to allow the home as an eligible originating site only applies to the delivery of mental and behavioral health services and that the statutory restrictions on the home as an eligible originating site still apply for all other Medicare telehealth services (although this requirement is waived through the end of the PHE).

Second, CMS, in implementing Section 123 of the CAA, is finalizing the requirement that when tele-mental health care is provided to a patient in their home, there must be an in-person, non-telehealth service with the patient’s physician or practitioner within six months prior to the initial telehealth service and thereafter at least once every 12 months. CMS is finalizing that exceptions to the subsequent in-person visit requirement may be made based on beneficiary circumstances (with the reason documented in the patient’s medical record), and that more frequent visits are also allowed. CMS is also finalizing its proposal that the in-person visit requirement could be satisfied by another physician or practitioner of the same specialty and subspecialty in the same group as the physician or practitioner who furnishes the telehealth service. CMS notes that the in-person visit requirement does not apply to services furnished for treatment of a diagnosed SUD or co-occurring mental health disorder.

Third, CMS is finalizing amending the regulatory requirement for interactive telecommunications systems to include audio-only communication technology when used for telehealth services for the diagnosis, evaluation or treatment of mental health disorders furnished to established patients in their homes. The use of audio-only technology is limited to mental health services furnished by practitioners who have the capability to furnish two-way, audio/video communications, but where the beneficiary is not capable of using, or does not consent to the use of, two-way, audio/video technology. CMS is also clarifying that mental health services can include services for the treatment of SUDs.

Fourth, CMS is finalizing the requirement to use a new modifier for services furnished via audio-only communications.

Enabling RHCs and FQHCs to Provide Mental Health Services Virtually

CMS is finalizing revising the current regulatory language for RHC and FQHC mental health visits to include visits furnished using real-time telecommunications technology. RHCs and FQHCs are statutorily prohibited from serving as “distant site practitioners” (i.e., the site where the provider is located) for Medicare telehealth services, but this regulatory change enables RHCs and FQHCs to receive payment for mental health visits when conducted via real-time telecommunication technology in the same way they do for in-person visits. To align with the changes noted above, CMS is also finalizing including coverage for audio-only services when the beneficiary is not capable of, or does not consent to, the use of video technology.

Adopting Coverage for Remote Therapeutic Monitoring Services

CMS is finalizing adoption of coverage for five remote therapeutic monitoring (RTM) services. These are services related to the use of digital technology to monitor non-physiologic patient data. These services parallel the remote physiologic monitoring (RPM) services adopted by CMS in 2019 but differ in a few ways. First, CMS anticipates that RTM services will primarily be billed by physiatrists, nurse practitioners and physical therapists. Second, the data collected for RTM services allows for non-physiologic data to be collected. Third, for RTM services, data can be self-reported as well as digitally uploaded, whereas for RPM services it must be digitally uploaded. Finally, the RTM services are limited to certain clinical areas: respiratory system status, musculoskeletal system status, therapy adherence and therapy response.

No Permanent Changes to Direct Supervision Requirements. Typically, CMS requires “incident to” services to be provided under the “direct supervision” of a supervising physician or practitioner. “Incident to” services are services that can be provided and billed by non-physician practitioners under the physician’s supervision, and “direct supervision” typically means in-person supervision. In prior guidance, CMS allowed for the “direct supervision” requirement for incident-to services to be satisfied if the supervising professional is available through virtual presence using real-time audio/video technology during the PHE. CMS did not permanently extend these flexibilities in the final rule and so they will expire at the end of the PHE.


While the MPFS does include an expansion of certain Medicare telehealth services, with a focus on tele-behavioral health services, the rule also continues to illustrate the limitations that CMS has in broadly expanding telehealth coverage and reimbursement given statutory restrictions. Without further congressional action, statutory restrictions on geographic sites, originating sites and eligible providers will come back into effect at the end of the COVID-19 PHE.

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1 A. Winter, L. Tabor. “Expansion of telehealth in Medicare.” MEDPAC. November 2020. Available at:



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