CY 2022 Medicare Physician Fee Schedule Rule Proposes Extended Telehealth Benefits

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The Big Picture

On July 13, the Centers for Medicare & Medicaid Services (CMS) released the annual Medicare Physician Fee Schedule (MPFS) proposed rule for calendar year (CY) 2022. The MPFS establishes fee-for-service payments for physicians and specific nonphysician health care professionals for services furnished on or after January 1, 2022; as is typical, the MPFS proposed rule proposes some Medicare payment policy changes as well. The comment period end date is September 13, 2021.

In this rule, CMS is proposing to extend coverage of certain Medicare telehealth services through CY 2023, proposing to permanently extend coverage of tele-behavioral services delivered to patients in their homes and via audio-only technology, and proposing changes that would allow for Rural Health Centers (RHCs) and Federally Qualified Health Centers (FQHCs) to deliver mental health visits virtually, among other provisions. This newsletter summarizes select telehealth provisions.


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 and 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 step 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 proposed extending or permanently covering certain services in the proposed CY 2022 MPFS.

Select Telehealth Provisions in the MPFS Proposed Rule

Extending Coverage of Some Telehealth Services Through CY 2023. CMS proposes extending coverage of certain “Category 3” Medicare telehealth services through the end of CY 2023. Category 3 services are those for which there is likely clinical benefit when furnished via telehealth but there is not sufficient evidence available for permanent coverage (such as for Category 1 or 2 services). Examples of Category 3 services include some types of home visits, emergency department visits (levels 1–3) and nursing facilities discharge-day management, among others. Acknowledging the need to gather more information regarding the utilization, clinical appropriateness and value of these services, CMS proposes 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.

Expanding Coverage of Tele-Behavioral Health Services. CMS proposes making several changes to the coverage of tele-behavioral health services to implement provisions of the Consolidated Appropriations Act (CAA) of 2021, which sought to expand access to mental health services furnished through telehealth.

First, in implementing Section 123 of Division CC of the CAA, CMS proposes 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, to implement the SUPPORT for Patients and Communities Act (P.L. 115-271), the 2018 legislation focused on responding to the opioid epidemic, CMS is proposing 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 (though this requirement is waived through the end of the COVID-19 PHE).

Second, CMS, in implementing the CAA, proposes that when tele-mental health care is provided to a patient in their home, there 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 six months. This requirement does not apply to services furnished for treatment of a diagnosed SUD or co-occurring mental health disorder. CMS is seeking comment on whether a different interval is necessary for mental health services furnished through audio-only and whether an alternative policy should be developed to account for scenarios in which the in-person, non-telehealth visit prior to the tele-mental health visit is furnished by a different practitioner in the same specialty/subspecialty in the same group.

Third, CMS proposes 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 would be 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 proposing to require the use of a new modifier for services furnished via audio-only communications. CMS is seeking comment on whether additional documentation should be required in the patient’s medical record to support the clinical appropriateness of audio-only telehealth, whether high-level services (e.g., Level 4 or 5 evaluation and management (E/M) codes) should be precluded from being delivered via audio-only tools, and whether any additional guardrails should be put in place to minimize program integrity and patient safety concerns. This change is notable as it is the first time that CMS has proposed reevaluating its regulatory definition of an interactive telecommunications system to include audio-only services and could provide a blueprint for further expansion of audio-only coverage in the future.

Enabling RHCs and FQHCs to Provide Mental Health Services Virtually. Prior to the PHE, an FQHC or RHC could not bill if it provided services to a patient who was not physically present at the facility. CMS proposes 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” for Medicare telehealth services, but this regulatory change would enable RHCs and FQHCs to receive payment for mental health visits when conducted via real-time telecommunications technology in the same way they do for in-person visits. To align with the proposed changes noted above, CMS also proposes including coverage for audio-only services when the beneficiary is not capable of, or does not consent to, the use of video technology.

Permanent Coding and Payment for Longer Virtual Check-ins. CMS proposes permanently adopting coding and payment for G2252, 11-to-20-minute virtual check-in services by a physician or other qualified professional who can report E/M services provided to an established patient and neither originating from related E/M services provided within the prior seven days nor leading to an E/M service within the next 24 hours.


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 coverage and reimbursement given statutory restrictions that limit CMS’ flexibility to implement permanent Medicare telehealth flexibilities. Without further congressional action, statutory restrictions on geographic sites, originating sites and eligible providers will come back into effect in Medicare at the end of the COVID-19 PHE.

In Medicaid, states have been acting to permanently expand access to telehealth services by extending COVID-19 flexibilities, expanding the types of services that can be covered via telehealth, and imposing payment parity requirements. Manatt Health has tracked state and federal guidance, regulations and legislation related to telehealth since March 2020; a summary of this tracker can be found here.

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



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