At the conclusion of 2021, the Medicare conversion factor (the amount Medicare pays per RVU) was set at $34.8931. The 2022 final rule, as in past years, is subject to “budget neutrality,” a previously obscure factor which is becoming increasingly impactful.
Due to exceptionally large 2021 increases in the RVUs for the office visit evaluation and management (E/M) codes (99201-99215), and the corresponding increases in payments for office-based services, the budget neutrality adjustment was triggered and the conversion factor has been driven down significantly in order to preserve budget neutrality. Congress, at the end of 2020 provided 3.75% in new money to support the 2021 conversion factor as a one-year fix. The 2022 final rule initially published a conversion factor of $33.5983. Subsequently, Congress provided 3.00% in new funding to support the 2022 conversion factor. On December 20, 2021, CMS published an updated higher conversion factor of $34.6062.