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February 28, 2022

How Changes in the Medicare 2022 Physician Fee Schedule Align With Value-Based Care for FQHCs

By: Stephanie Hudson, Esq., Yuvo Health, New York, NY


2021 was a difficult year for federally qualified health centers (FQHCs), many of which have been overwhelmed by the stresses of the ongoing COVID-19 pandemic. However, community health centers have a few exciting gifts waiting for them in 2022.

FQHCs are community-based health centers that receive federal funding to deliver primary care services to traditionally underserved communities. They operate in both rural and urban environments, and are often some of the only primary care options available to residents in their catchment areas. 

To support these critical providers during the pandemic and afterward, The Centers for Medicare & Medicaid Services (CMS) has made some significant changes in the 2022 Physician Fee Schedule (Final Rule) that directly benefit FQHCs – and give these community health centers even more of an incentive to embrace value-based care (VBC) for all of their patients.

While Medicare may not make up a huge proportion of the typical FQHC payor mix, Medicare is hugely influential across the payor landscape: state Medicaid programs and commercial insurance companies often follow Medicare’s lead in payment reforms, creating best practices shared between payor types.

Increased alignment across payors simplifies the reimbursement process, ensures that payments are equal and fair for different beneficiaries, and allows providers to treat all of their patients the same, regardless of insurance status. With fewer disparities between payors, clinicians can be confident that they are delivering standardized, evidence-based, high-value care to everyone who walks in the door.

In recent years, Medicare has used its clout to lead the way into proactive, coordinated, VBC. Accountable care organizations (ACOs) and other modernized VBC models have quickly spread from Medicare and Medicare Advantage to Medicaid and commercial health plans, creating incentives for providers to undertake holistic and comprehensive clinical care reforms.

In 2022, CMS is doing more than ever to encourage FQHCs to join the march toward VBC. Starting in the new year, FQHCs will have access to new or enhanced reimbursement opportunities for telehealth, chronic and transitional care management, and home health and hospice care. 

These areas are all critically important for getting ahead and staying ahead of expensive, disruptive health events that may reduce a provider’s likelihood of achieving positive outcomes and earning shared savings, no matter what the VBC model and payor sponsor in question. 

Here are some of the most important FQHC-specific changes coming in 2022, paired with a look at how FQHCs can use these adjustments to their advantage to develop their VBC initiatives.

Continued Telehealth Flexibilities and New Reimbursement Opportunities for Remote Mental Health Services

Telehealth has been the breakout star of the COVID-19 pandemic, offering a vital lifeline to patients and providers separated by lockdowns and quarantine measures. With the end of the pandemic nowhere in sight, CMS is extending certain telehealth flexibilities, such as reimbursement parity with in-person visits and the ability to use non-HIPAA compliant technologies until the end of calendar year 2023. These services include interactive audio and/or video visits with Medicare beneficiaries. Any practitioner at an FQHC can deliver approved telehealth services from any location, including the practitioner’s home. The service must be within the clinician’s scope of practice, and it must take place in real-time with the patient. 

Beginning on January 1, 2022, CMS is adding the capability to deliver mental and behavioral health services, including substance use disorder services, to patients via telehealth. FQHCs will be able to bill for these telemental health visits in the same way as they do for in-person visits as long as they follow the guidelines for the service.

This addition has the potential to be a game-changer for FQHCs, which often operate in areas of severe mental healthcare provider shortages.The ability to provide mental healthcare remotely will extend the reach of FQHCs and provide crucial resources for the millions of individuals experiencing mental and behavioral health challenges tied to the pandemic. Aligned reimbursement between virtual and in-person visits also reduces the administrative complexity for clinics interested in advanced payment models such as ACOs.

Increased access to mental healthcare may have a positive impact on patients with other chronic conditions, leading to better adherence to care plans, less avoidable utilization, and more positive overall outcomes. 

Concurrent Billing for Chronic Care Management (CCM) and Transitional Care Management (TCM) Services

Effective chronic disease management is at the heart of VBC. Proactive and comprehensive management of conditions such as diabetes, hypertension, and chronic obstructive pulmonary disease (COPD) can reduce readmissions and emergency room visits, control overall costs, and improve quality of life for patients. 

Medicare reimburses for specific structured CCM activities as well as a time-sensitive series of TCM services designed to help patients successfully move on from a hospital event and recover in the home. 

CCM and TCM are complementary and are often required at the same time as patients try to improve their self-management after an admission or readmission. But until this Final Rule, FQHCs were not allowed to bill for both types of services in the same month.

Concurrent billing, paired with increases in reimbursement rates and new codes for certain CCM services, will allow FQHCs to more effectively wrap their arms around their chronically ill patients. 

Enhanced reimbursement and more nuanced coding can help FQHCs financially support the CCM activities that are directly tied to success with VBC. 

Using these billing and coding improvements, FQHCs can gain experience and begin to expand their chronic disease management programs to prepare them for participation in additional Medicaid or commercial VBC contracts.

Revisions to Home Healthcare and Hospice Service Billing Requirements

Home healthcare is increasingly in demand as the population ages. For some patients, hospice care follows as an important and valuable part of the end-of-life process.

CMS is encouraging FQHCs to fill growing gaps in home healthcare availability by making it easier to bill for visiting nurse services. Starting on March 1, 2022 and effective for the duration of the COVID-19 public health emergency (PHE), FQHCs can bill and be reimbursed for services furnished by a registered nurse or licensed practical nurse within a home health agency shortage area if the patient isn’t already under a home health plan of care.

A second change involves hospice care. Previously, physicians, nurse practitioners, or physician assistants providing attending physician services for hospice patients were not allowed to do so during the same hours they were working at an FQHC. The FQHC could not bill for these services, effectively limiting the scope of care they could provide to the seriously ill.

In 2022, CMS will allow clinicians employed by FQHCs to deliver hospice services during their hours at the community health center. FQHCs will be able to bill for these services directly, just like any other service, to simplify the process and reduce unnecessary barriers to care.

The adjustment continues Medicare’s ongoing efforts to extend value-based primary care far beyond the walls of the clinic. This belief is shared by the Medicaid and commercial health plans that are also seeking FQHCs to become active members of the VBC community.

With these and other helpful reimbursement modifications in the new year, FQHCs can get paid for building their VBC competencies with Medicare patients. They can then use the lessons learned to implement coordinated care programs in all areas of practice, creating a solid foundation for success with innovative VBC models in the near future.

What Does This Mean for Medicaid FQHC Policies Post-COVID?

In addition to the FQHC-specific sections outlined above, the Final Rule contained telehealth provisions that have broader implications for Medicaid clinic policies.

The Final  Rule extended coverage of “Category 3” telehealth codes to the end of calendar year 2023. Category 3 codes are telehealth services covered during the PHE and may be covered afterward if CMS decides to keep them. This, alongside the inclusion of new Remote Therapeutic Monitoring codes and the permanent addition of a virtual check-in code, signals CMS’s recognition that telehealth should be an essential part of the American healthcare system even after the pandemic. 

While these changes are taking place within the Medicare environment, they could have significant implications for Medicaid programs across the country. As states determine FQHC telehealth coverage post-pandemic, supporters of the idea that virtual visit rates should be equivalent to the reimbursement for in-person services will have precedent to bolster their position.

Permanent parity would create much-needed alignment between Medicaid and Medicare telehealth policies and better reward clinics for using virtual care management to reduce unneeded in-person visits. 

The adjustments and additions to the 2022 Physician Fee Schedule will allow FQHCs to serve their patients more effectively in more flexible ways.  With increased reimbursement parity, more options for remote care, and additional touchpoints for patients in hospice and home healthcare, FQHCs will be able to utilize scarce resources more effectively and continue to fulfill their mission of delivering high-quality primary care to communities in need.

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    Stephanie Hudson, Esq.


    Stephanie Hudson, Esq., is the Chief Legal Officer and co-founder at Yuvo Health, which provides administrative and managed-care contracting services to Federally Qualified Health Centers (FQHCs). With a career spanning nearly two decades, she is a health law attorney and an adjunct professor at American University. Prior to Yuvo Health, Ms. Hudson worked at boutique health law firms, served as in-house counsel for small and large health systems, and acted as counsel to various healthcare startups. She received her JD as well as her Master of Laws in Health Law from Saint Louis University School of Law. She also holds an MA in International Business from Webster University, and a BA in Political Science from the University of Missouri-Columbia. She may be reached at [email protected].