AI Assesses CMS Pricing History of 92229

 [Direct AI research - not verified]

Please use agentic research and determine how CMS set the price for code 92229, retinal scan and auto diagnosis. In the AMA RVU RUC database, they allot about 15 minutes of technician time at 50 cents per minute or about $8, and they alot a trivial capital equipment charge, like 50 cents (a $14000 device with 5 year life used for 15 minutes yields only amortized pocket change). Did CMS see this and nonetheless assign 92229 an artificial value like around 1 RVU ($30-40). How did CMS justify that.

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Bottom line: Yes. CMS saw the ordinary RUC-style direct practice expense inputs for 92229 — staff time, retinal camera time, etc. — but concluded that the usual PE machinery did not adequately capture the core cost of the service: the autonomous software/AI analysis. CMS first made 92229 contractor-priced for CY 2021, then in CY 2022 created a national price by crosswalking 92229 to CPT 92325, a PE-only eye-code, yielding about 1.36 RVUs and roughly $45.69 national payment in 2022.

Here is the sequence.

In the CY 2021 PFS final rule, CMS described 92229 as retinal imaging with point-of-care automated analysis using AI, with no ophthalmologist interpretation. Therefore, CMS assigned it 0.00 work RVUs and treated it as a practice-expense-only service. CMS explicitly said the RUC had recommended a $25 “per click” analysis fee, but CMS rejected putting that fee into direct PE, saying it looked more like an indirect PE/service fee rather than an item allocated as a direct cost to one patient encounter.

CMS then got pushback. Commenters argued that the AI analysis fee was directly attributable to each patient and that, without the software analysis, there was no 92229 service. CMS accepted the conceptual problem but not the RUC input method: it said AI/software costs should be accounted for, but that AI applications were “not well accounted for” in the current PFS PE methodology. Rather than create a direct PE software fee, CMS finalized contractor pricing for 92229 for CY 2021.

In the CY 2022 proposed rule, CMS made the broader policy admission you are circling around: the PPIS indirect PE data were from 2007–2008, before software, licensing, algorithmic analysis fees, and similar cost structures were typical. CMS said its existing PE method was built around clinical labor, supplies, equipment, and indirect office expenses, and was a poor fit for services whose real cost was a software algorithm or analysis fee with minimal hardware cost.

So for CY 2022, CMS proposed not to rely on the literal camera-amortization-plus-technician-time calculation. Instead, it proposed a crosswalk to CPT 92325, “Modification of contact lens … with medical supervision of adaptation,” because 92325 was a PE-only eye code that CMS believed reflected comparable overall resource costs in the physician office setting. CMS openly acknowledged the services were not the same, but said the total resource costs were similar, and that the crosswalk would recognize the purchase and ongoing use of software that “would not typically be considered direct PE” under the current methodology.

In the CY 2022 final rule, CMS finalized that exact approach. Commenters supported the crosswalk, noting that 92325 was not clinically similar but had a total direct practice cost similar to the RUC-recommended total direct PE cost for 92229. CMS rejected alternative crosswalks such as 95249 and 92977 because those would include additional resource costs and produce a higher valuation. CMS then finalized values for 92229 based on a direct crosswalk to 92325.

The resulting payment was not a “work RVU” payment and not a payment for 15 minutes of technician time alone. It was a PE-only proxy payment for a service whose dominant cost was software/AI analysis. CMS’s own general PFS explanation is that payment is derived from RVUs for work, PE, and malpractice, multiplied by the conversion factor; for CY 2022, the conversion factor was about $33.59. (CMS) Industry reporting based on CMS’s published RVUs put 92229 at about $45.69 nationally in CY 2022, consistent with roughly 1.36 total RVUs. (Eyenuk)

So the clean interpretation is:

CMS did not simply “see $8 of technician time and 50 cents of equipment and then mysteriously pay $40.” Rather, CMS saw that the ordinary PE inputs badly understated an AI service because the real cost was a per-use software/analysis cost. But CMS was unwilling to accept the RUC’s per-click software fee as a direct PE input. It therefore used the old-fashioned Medicare workaround: contractor price first, then crosswalk to a roughly comparable PE-only code.

For your policy point, 92229 is a useful early example of CMS saying, in effect: our PE methodology has no good slot for software-as-the-service, so we will use a pragmatic crosswalk until the PE methodology catches up.

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Version with citations

Sure — here is the same text in ordinary prose, with the full plain-text source link at the end of each relevant paragraph.

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Bottom line: Yes. CMS saw the ordinary RUC-style direct practice expense inputs for CPT code 92229 — staff time, retinal camera time, and similar items — but concluded that the usual practice-expense machinery did not adequately capture the core cost of the service: the autonomous software/AI analysis. CMS first made 92229 contractor-priced for CY 2021, then in CY 2022 created a national price by crosswalking 92229 to CPT code 92325, a practice-expense-only eye-code. The resulting national Medicare payment was about $45–46 in 2022, consistent with roughly 1.36 total RVUs. Source: CMS CY 2021 PFS final rule, https://public-inspection.federalregister.gov/2020-26815.pdf ; CMS CY 2022 PFS final rule, https://www.federalregister.gov/documents/2021/11/19/2021-23972/medicare-program-cy-2022-payment-policies-under-the-physician-fee-schedule-and-other-changes-to-part

Code 92229 describes retinal imaging for detection or monitoring of disease, with point-of-care automated analysis and report, unilateral or bilateral. In the CY 2021 Medicare Physician Fee Schedule final rule, CMS treated 92229 as a practice-expense-only service, with 0.00 physician work RVUs, because the code does not involve a physician or other qualified health care professional interpretation in the usual sense. CMS noted that the RUC had recommended a $25 “per click” analysis fee, but CMS rejected the idea that this software or analysis fee should simply be put into direct practice expense as a patient-specific input. CMS said the “per click” fee looked more like an indirect practice expense or service fee rather than a conventional direct input such as clinical labor, disposable supplies, or equipment time. Source: CMS CY 2021 PFS final rule, https://public-inspection.federalregister.gov/2020-26815.pdf

CMS then received comments arguing that the AI analysis fee was directly attributable to each patient and that, without the autonomous software analysis, there was no 92229 service. CMS accepted the broader conceptual point that AI and software costs had to be recognized somehow, but it did not accept the RUC’s proposed direct-input method. Instead, CMS finalized 92229 as contractor-priced for CY 2021. This allowed Medicare Administrative Contractors to establish payment locally while CMS considered how to handle AI/software costs more generally under the Physician Fee Schedule. Source: CMS CY 2021 PFS final rule, https://public-inspection.federalregister.gov/2020-26815.pdf

In the CY 2022 proposed rule, CMS was more explicit about the methodological problem. CMS acknowledged that the practice expense system was built around physician work, clinical labor, supplies, equipment, and indirect practice costs, and that its underlying indirect practice expense data were old — based on the Physician Practice Information Survey, collected in 2007–2008. That vintage mattered because the current structure did not fit well with newer services whose dominant cost is software, algorithmic analysis, licensing, or a per-use analytic fee rather than a physician’s time or a large piece of capital equipment. Source: CMS CY 2022 PFS proposed rule, https://public-inspection.federalregister.gov/2021-14973.pdf

For CY 2022, CMS proposed a workaround. Rather than price 92229 by simply adding 15 minutes of technician time plus a few cents or dollars of amortized retinal camera time, CMS proposed to crosswalk the service to CPT code 92325, “Modification of contact lens, with medical supervision of adaptation.” The clinical service is obviously different, but CMS regarded 92325 as a practice-expense-only ophthalmology code with a comparable overall resource profile. In effect, CMS used 92325 as a proxy value that could recognize the resource cost of the software analysis without formally accepting a direct “per click” AI fee as a practice expense input. Source: CMS CY 2022 PFS proposed rule, https://public-inspection.federalregister.gov/2021-14973.pdf

In the CY 2022 final rule, CMS finalized that approach. Commenters supported the 92325 crosswalk, even while acknowledging that 92325 was not clinically similar to 92229. CMS rejected alternative crosswalks that would have produced higher payment, because those codes included additional resource costs that CMS did not think were appropriate for 92229. CMS therefore finalized national values for 92229 based on a direct crosswalk to 92325. Source: CMS CY 2022 PFS final rule, https://www.federalregister.gov/documents/2021/11/19/2021-23972/medicare-program-cy-2022-payment-policies-under-the-physician-fee-schedule-and-other-changes-to-part

The resulting payment was not a physician-work payment and not a literal reimbursement for 15 minutes of technician time alone. It was a practice-expense-only proxy payment for a service whose dominant cost was autonomous software analysis. CMS’s CY 2022 conversion factor was $33.59, and industry summaries based on CMS’s published RVUs estimated the national payment for CPT 92229 at about $45.69. Another ophthalmology coding summary reported a national payment of about $45.36. The small difference reflects rounding and locality/payment-file conventions, but both estimates are in the same range. Sources: CMS CY 2022 PFS fact sheet, https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2022-medicare-physician-fee-schedule-final-rule ; Eyenuk, https://www.eyenuk.com/us-en/articles/eyeart/2022-cms-pfs-final-rule ; Review of Ophthalmology, https://www.reviewofophthalmology.com/article/medicare-whats-new-for-2022

So the clean interpretation is this: CMS did not simply see $8 of technician time and 50 cents of equipment time and then mysteriously assign a $40-plus payment. Rather, CMS recognized that the ordinary direct practice expense inputs badly understated an autonomous AI service because the economically meaningful component was the software analysis. At the same time, CMS was unwilling to accept the RUC’s proposed $25 per-click software fee as a direct practice expense input. The compromise was first contractor pricing, then a national crosswalk to an existing practice-expense-only eye code. Source: CMS CY 2021 PFS final rule, https://public-inspection.federalregister.gov/2020-26815.pdf ; CMS CY 2022 PFS final rule, https://www.federalregister.gov/documents/2021/11/19/2021-23972/medicare-program-cy-2022-payment-policies-under-the-physician-fee-schedule-and-other-changes-to-part

For policy purposes, 92229 is an important early example of CMS saying, in effect: the Physician Fee Schedule practice expense methodology has no clean slot for software-as-the-service. Until that methodology catches up, CMS may use pragmatic crosswalks rather than literal technician-time-plus-equipment amortization.