November 17, 2022

ACR Urges Congress to Address Physician Payment Cuts and Clinical Labor Policy

The American College of Radiology® (ACR®), along with a coalition of national medical societies, sent a letter to congressional leadership urging action to minimize forthcoming Medicare reimbursement cuts set to take effect on Jan. 1, and to address payment associated with a Centers for Medicare and Medicaid Services (CMS) clinical labor pricing update.

Without congressional action, Medicare providers face an approximately 8.5% across-the-board Medicare reimbursement reduction next year. The cuts result from the expiration of a 3% congressional payment adjustment for 2022, combined with statutorily required budget neutrality adjustments to the Medicare physician fee schedule (MPFS) conversion factor and implementation of legislative pay-as-you-go rules (PAYGO).

In addition to cuts from the Medicare conversion factor, approaching payment reductions are compounded by the second year of CMS’ phased-in implementation of its clinical labor pricing update included in the 2022 MPFS final rule. Clinical labor staff, medical supplies and equipment costs are three components of direct practice expense (PE) inputs, which are costs directly associated with the provision of a service or procedure. They are budget neutral, which means that an increase in payment for one component typically means a proportional decrease in payment in the other components. CMS recently updated clinical labor staff wages, and the budget neutrality application has resulted in significant code level reduction for codes with high medical supplies and equipment costs, including some interventional radiology and radiation oncology codes.

The coalition of medical associations recommended in the letter that Congress include H.R. 8800, the Supporting Medicare Providers Act of 2022, which provides a 4.42% positive adjustment to the MPFS conversion factor for CY2023, as well as additional new funding to the MPFS for the explicit purpose of increasing the non-facility/office-based practice expense relative value units (NF PE RVUs) negatively impacted by CMS’ clinical labor update policy.

For more information, please contact Ashley Walton, ACR Government Affairs Director.