FOR IMMEDIATE RELEASE
October 7, 2022
Contact: Grant Herring
Momentum Grows Around Stopping Clinical Labor Cuts
Healthcare specialty groups rally to oppose looming clinical labor cuts
WASHINGTON, DC — Momentum is building in Washington to avert CMS-directed clinical labor cuts for specialty providers. During the comment period, specialty providers from across the spectrum have weighed in with the Centers for Medicare and Medicaid Services (CMS) in opposition to the ongoing clinical labor and EM cuts.
Dr. Mark Garcia, USPA board member and CMO for American Vascular Associates, said, “This surge of support speaks to the magnitude of these proposed cuts. Speciality providers of every stripe are coming together to send a clear message that enough is enough. All of the comment letters make it clear that further medicare cuts will only accelerate the closing of office-based centers and drive up the cost of health care.”
Comment Letter (CMS-1770-P) Highlights:
“CMS is continuing with the second year of the 2022 clinical labor policy which adds additional cuts to certain providers of another 4.5% so that certain office-based specialists will be subject to cuts of more than 9% in 2023 alone.”
"While the [Biden] Administration has launched a number of initiatives aimed at addressing health inequity through the elimination of disparities in health care, the 2023 PFS Proposed Rule actually threatens to undermine these initiatives in areas throughout the PFS by continuing to phase in the 2022 PFS clinical labor cuts."
“We believe another round of office-based dialysis vascular access center closures not only would be likely to drive vascular access repair utilization lower, such closures also would begin to drive utilization back to the hospital. Not only would such a result obviously cost Medicare patients and the Medicare program much more, but it would also further undermine patient outcomes given that peer reviewed data has shown that patients who receive vascular access care in the office have better outcomes than those patients treated in the hospital outpatient setting.”
“While we understand that the pricing for clinical staff had not been updated for 20 years, it is unfair that specialties with higher supplies and equipment costs will be experiencing additional cuts as a result of [budget neutrality]”
“In the future, all significant data updates (PPI Survey results, supply and equipment pricing, and clinical labor pricing) should occur simultaneously and should be phased in to avoid abrupt impacts to individual services and specialties.”
“We urge CMS use a methodology that will allow more frequent updates of practice expenses, or alternatively invite stakeholders to submit updated practice expense information on an as needed basis, to avoid last year’s significant shifts for certain physician specialties because clinical labor costs had not been updated for 20 years.”
“CMS should update pricing data on a more frequent basis for all direct PE inputs, so adjustments will not be so dramatic. The AMA acutely understands the underlying unfairness that the real increase in clinical labor costs for physician practices is not recognized through an update to the conversion factor and calls on CMS to urge Congress to provide a positive update to the Medicare conversion factor in 2023 and all future years.”
“As with many payment policies within Medicare, the issue seems to arise not from the clinical labor pricing update itself but rather from budget neutrality. United Specialists for Patient Access (USPA) estimated in 2021 that the actual impact of clinical labor pricing updates on reimbursement for many providers, including vascular surgeons, could be as significant as negative 11 percent. Reimbursement cuts of this magnitude will have implications on the availability of certain office-based specialty procedures to Medicare beneficiaries. There is also the downstream risk of making independent physician practices financially unstable and accelerating the trend of consolidation towards corporate entities and large health systems. For these reasons, ASCA again requests that CMS temporarily freeze the clinical labor pricing updates.”
“We also continue to urge CMS to hold harmless the specialties that bear the brunt of this clinical labor pricing update and look for more equitable ways to continue the update.”
“CMS should freeze implementation of the update to clinical labor data used to calculate direct practice expense (PE) and focus on engaging providers, other stakeholder and Congress in formulating an approach to fundamentally reform PE methodology and related policies.”
“We urge CMS to take whatever steps it has within its authority to mitigate these payment cuts—including reducing the impact or delaying implementation—and to work with Congress on policies that will ensure the ongoing stability of the PFS.”
“As CMS continues its proposal to implement the phase in of clincal labor updates, SCAI continues to have concerns that by increasing the clinical labor pricing, physician services with high-cost supplies and equipment are disproportionately impacted by the budget neutrality component within the practice expense relative values. We understand the underlying unfairness that the real increase in clinical labor costs is not recognized through an update to the conversion factor and calls on CMS to urge Congress to provide a positive update to the Medicare conversion factor in 2023 and all future years.”
“These [clinical labor] cuts may only delay the inevitable as practices will find they can no longer stay open, feel the push by CMS to be acquired by hospitals and disincentivize providers from opening office-based labs in disadvantaged communities.”
“CY2023 marks the second year of a four-year transition to the new clinical labor cost data that will be completed in CY2025. This new CMS policy increases the source clinical labor pricing and then disproportionally cuts physician services with high-cost supplies and equipment to account for the budget neutrality requirements in place to offset the clinical labor rate increases. This update puts a huge and unfair burden on specialties that require expensive supplies and/or equipment to care for their patients."