Medicare Physician Fee Schedule 2022 Proposed Rule Summary

2022 MPFS: New RHC Telehealth and Grandfathering Policies

Nathan Baugh, NARHC Director of Government Affairs and Sarah Hohman, NARHC Government Affairs Associate


On July 13th, the Centers for Medicare and Medicaid Services (CMS) issued the CY 2022 Medicare Physician Fee Schedule Proposed Rule. This year’s rule includes several significant Rural Health Clinic (RHC) policy proposals in the 1,747-page document.

Notably, CMS proposes to re-define what constitutes an “RHC encounter” to allow RHCs to provide mental health services through telehealth beyond the end of the public health emergency. We are happy to see this proposal as it will allow RHCs to treat these mental health services as a normal visit. CMS also proposes how to establish clinic-specific upper payment limits for grandfathered RHCs which, of course, has major implications for all previously uncapped RHCs.

The National Association of Rural Health Clinics (NARHC) will be providing comments to CMS in the coming months, you are welcome to offer feedback to NARHC (contact info below) or submit your own comments directly to CMS here.

RHC Mental Health Services Via Telehealth

In the Consolidated Appropriations Act of 2021, Congress permanently extended Medicare telehealth coverage of mental health services beyond the public health emergency (PHE). This was a positive step towards making all Medicare covered services provided via telehealth permanent, but legislation will still be needed to permanently extend other telehealth services before the end of the PHE.

In order to ensure that RHCs are not left behind, CMS is proposing to redefine what constitutes a mental health visit “to ensure that they reflect contemporary medical practice.” This proposal is a very positive step forward and we were glad to see CMS think proactively about how to extend new payment policy to RHCs.

Revising the Definition of an RHC Mental Health Visit

Prior to the COVID-19 pandemic, RHCs were only allowed to serve as originating sites for telehealth visits. The CARES Act of 2020 first allowed RHCs to serve as distant sites for telehealth visits, but it also established a special payment mechanism for RHC distant site services. This special payment mechanism paid one rate based on the national average payment rates for comparable telehealth services which is why RHCs bill for telehealth visits using HCPCS code G2025 and always get reimbursed $99.45 (for CY 2021). This temporary authority expires at the end of the public health emergency (PHE) and NARHC is working hard to get this extended permanently for all telehealth services.

Congress has already extended telehealth beyond the PHE for mental health. This is a good thing, but it was unclear if this extension would apply to RHCs and FQHCs.

We are pleased that CMS makes it clear in this proposal that they believe “beneficiaries receiving mental health services from RHC and FQHC practitioners should have the same access to mental health care delivered via telecommunications technology as beneficiaries receiving services from practitioners paid under the PFS.”

In order to achieve this goal, CMS proposes to revise the regulatory definition of an RHC encounter to include mental health services furnished through interactive, real-time telecommunications technology. Not only does this allow RHCs to provide these services beyond the PHE, but it would allow RHCs to treat these telehealth services (including audio-only) as normal RHC encounters and be paid at your RHCs all-inclusive rate just as though the patient had come into the clinic for an in-person visit!

Ever since the creation of the special payment rule, NARHC has been fighting to change the way Medicare reimburses for telehealth visits. We want normal reimbursement rates, normal coding (with modifier 95 to indicate telehealth), and normal cost reporting rules to apply to all telehealth visits. This proposal does exactly that (at least for mental health services) and should help us make the case that all telehealth services be treated in a similar fashion.

§ 405.2463 What constitutes a visit


(3) Visit - Mental health. A mental health visit is a face-to-face encounter between a RHC or FQHC patient and one of the following:

(i) Clinical psychologist.
(ii) Clinical social worker.
(iii) Other RHC or FQHC practitioner, in accordance with paragraph (b)(1) of this section, for mental health services.



(3) Visit - Mental health. A mental health visit is a face-to-face encounter or an encounter furnished using interactive, real-time, audio and video telecommunications technology or audio-only interactions in cases where the patient is not capable of, or does not consent to, the use of video technology for the purposes of diagnosis, evaluation or treatment of a mental health disorder between an RHC or FQHC patient and one of the following:

(i) Clinical psychologist.
(ii) Clinical social worker.
(iii) Other RHC or FQHC practitioner, in accordance with paragraph (b)(1) of this section, for mental health services.

Grandfathered RHC Payment Methodologies

The Consolidated Appropriations Act of 2021 contained significant reforms to the way RHCs are reimbursed by Medicare. As a result of this legislation, which we call the RHC payment modernization policy, the RHC upper payment limit, or cap, will rise to $190 by 2028. All RHCs that were previously uncapped are not necessarily subject to this limit, but are instead considered “grandfathered-in.”

Grandfathered RHCs receive clinic-specific upper-limit payment rates based on their 2020 rates. However, until this rule was released, we did not know exactly how CMS might operationalize this policy, particularly as cost-reporting years do not always align with calendar years.

In this rule, CMS proposes that grandfathered RHCs use the cost reporting period that ends in calendar year 2020 to establish the clinic-specific upper payment limit.

CMS writes “if a provider has a cost reporting period that differs from a calendar year time-period then the MACs should use data based on the relevant cost report period ending in 2020.”

While it is clear which cost report period CMS is proposing to use (the one ending in 2020), CMS does not indicate whether or not the clinic specific upper payment limit will be adjusted when the cost report period ending in 2020 is settled. We believe that clinic specific upper payment limits should be based on the final cost-settled rates for cost report periods ending in 2020, not an interim rate.

CMS writes that they “interpret ‘per visit payment amount’ to align with the interim rate process the MACS use in determining an RHC’s AIR.”

However, it is not clear to NARHC what “align” means in this context. This confusion is compounded by the fact that interim rates paid to RHCs during 2020 would be based on cost report periods that ended in 2019 more-so than 2020.

We believe that ultimately grandfathered upper payment limits should be based on the final cost settled amount for cost reporting periods that end in 2020, or 2021 (for grandfathered RHCs that do not have cost reporting period that end in 2020). Since it may take some time for the final cost settled rates to be adjudicated, we will suggest that CMS use clinic specific upper limits based on the interim rates only until such time that the final rate for 2020 (or 2021) is established.

NARHC will ask CMS to clarify this policy in our comments.

Consolidated Cost Reports

CMS also proposes, with little explanation, to “no longer allow new RHCs to file consolidated cost reports.” CMS indicates that because new RHCs of all types are subject to the national statutory payment limit for RHCs, they will not be allowed to file consolidated cost reports.

NARHC believes this proposal needs to be revised. Certainly, combining non-grandfathered RHCs with grandfathered RHCs on a consolidated cost report should not be allowed, as this would allow new RHCs to circumvent the statutory national cap. However, new RHCs should be allowed to continue filing consolidated cost reports with other “non-grandfathered” RHCs.

CMS points out that consolidated cost reports allow “RHCs to take advantage of administrative efficiencies and economies of scale that do not exist otherwise.”

NARHC agrees that filing a consolidated cost report is a great option for RHCs to have, and it is important that CMS retain that option for new RHCs. Instead of eliminating this option, CMS should simply prohibit consolidated cost reports when grandfathered and non-grandfathered RHCs are grouped together.

We are hopeful that CMS will agree and revise this proposal.

Payment for Attending Physician Services Furnished by RHCs to Hospice Patients

Currently, any hospice related service provided by RHC clinicians to hospice patients must be carved out of the RHC cost report and billed under Medicare Part B fee schedule as these services are not considered “RHC services.” Non-hospice related care provided to a hospice patient can be billed as an RHC encounter if it meets the requirements for an RHC billable visit. This policy has discouraged and disincentivized RHC clinicians from providing hospice related care to hospice patients.

However, the Consolidated Appropriations Act of 2021 will change this policy beginning in 2022 by allowing RHC clinicians to provide hospice related care (i.e. attending physician services) and get paid for these as traditional RHC encounters.

From a billing perspective, CMS did not specify the revenue code RHCs will need to use for services provided in a hospice setting, but we do anticipate that a revenue code will be announced when the final rule is released in early November. 

Concurrent Billing for Chronic Care Management Services
and Transitional Care Management Services

Currently, RHCs may not bill for Transitional Care Management (TCM) services for a patient if another practitioner or facility has already billed for Chronic Care Management (CCM) services for that patient during the same time-period.

CMS recognizes that it may be medically necessary for these services to complement each other while not overlapping or duplicating services and now proposes to allow RHCs to bill for TCM and other care management services furnished to the same patient during the same service period (1 month in this case), provided that all requirements for billing each code are met. This applies to services described in the following HCPCS Codes:

  • G0511 (General Care Management for RHCs)
  • G0512 (Psychiatric CoCM code for RHCs)

 Direct Billing for PA Services

CMS is proposing to implement section 403 of Division CC of the Consolidated Appropriations Act of 2021 that authorizes Medicare to make direct payment to PAs for professional services they furnish under Part B beginning January 1, 2022. This section will be of particular interest to PA-owned RHCs and can be found beginning on page 272.

Original article 07/14/2021: 

Today, CMS released the CY 2022 Medicare Physician Fee Schedule.

Key provisions for Rural Health Clinics begin on page 323 and detail how CMS plans to implement key provisions of the RHC Medicare payment reform including how to set grandfathered RHC upper limits. There is also a section on redefining mental health visits in a virtual setting.

NARHC is currently completing a full analysis of the MPFS and will update this article with a break-down of the key RHC provisions soon. CMS will accept comments until September 13, 2021.

Please stay up to date on key RHC news on and contact Sarah Hohman, NARHC Government Affairs Associate, or Nathan Baugh, NARHC Director of Government Affairs, with any questions or concerns.