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President Biden Signs Law to Avert 2022 Medicare Payment Cuts
CMS issued a final rule which included a 2022 conversion factor of $33.59, a decrease of $1.30 from 2021. The cut was largely caused by the expiration of the 2021 3.75 percent payment increase – driven by the COVID-19 response legislation and budget neutrality adjust­ments resulting largely from the change in RVUs to the E/M services.

 However, in early December, Congress passed, and President Biden signed into law, legislation averting much, but not all, of the 2022 cuts to the conversion factor. The law partially mitigates the scheduled 3.75 percent cut to the Medicare Physician Conversion Factor (CF) and both the Medicare Sequestration (two percent) and PAYGO (four percent) cuts. Specifically, the legislation would phase in cuts to the Medicare sequester at a rate of zero percent for the first quarter of 2022, a cut of one percent for the second quarter of 2022, and a return of the cut to the full two percent beginning in June of 2022 and continuing onward. The law also eliminates three percent of the CF cuts, resulting in a three quarters of one percent cut for the entirety of 2022. Finally, the law would subtract budget scorecard deficits for both the 5-year and 10-year windows from FY 2022 and add them to FY 2023, effectively pushing the implementation of a PAYGO sequester to 2023.

 Due to the number of interacting payment policies impacting the 2022 Medicare conversion factor, CMS is recalculating the 2022 conversion factor. A revised conversion factor is expected from CMS soon.

Last Reviewed: January 2022