Device Makers: Congress Should Mitigate Physician Clinical Labor Cuts

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Article by Michelle Stein:

Device makers are again urging lawmakers to provide relief from Medicare clinical labor policies that reduce reimbursement for office-based specialists that use high-tech medical equipment, warning that acting on physician fee schedule conversion factor cuts without looking at changes to the clinical labor policies won’t do enough to help in-office specialists and could lead to shifts in care to hospitals or other facilities.

“While the need for overall PFS reform rightfully has received significant attention in recent years, the disproportionate, negative impact on office-based specialty care has not,” the Advanced Medical Technology Association, Medical Device Manufacturers Association and Medical Imaging and Technology Alliance say in a letter to House and Senate leadership on Monday (Aug. 14).

“The most recent office-based specialty cuts (so-called ‘clinical labor policy’ cuts stemming from the 2022 PFS) currently are being phased in through 2025 and continue to cause terrible damage to the ability of office-based specialists to provide badly needed care,” they add.

The device makers have long been a proponent of mitigating the impact of CMS’ changes to clinical labor policy, which were finalized as part of the 2022 physician fee schedule along with a four-year transition period to ease into the cuts that mostly affect specialists. However, mitigation of the clinical labor cuts has been left out of packages where Congress included some relief for cuts to the conversion factor despite pushes from device makers and specialists.

The proposed 2024 physician fee schedule includes an overall 3.3% cut to the conversion factor as well as the third year of clinical labor cuts to office-based specialty relative value units that United Specialists for Patient Access says cuts some specialists by another 3%.

“As a result, certain office-based specialists will again be cut by another 6 - 7% in 2024 alone,” USPA’s website says.

The device makers say the cuts are leading to consolidation and warn they could feed into a shift from procedures performed in a physician’s office to a facility. Even if lawmakers step in to once again mitigate the conversion factor cuts -- a move some lobbyists don’t believe is guaranteed but could be part of discussions this fall -- that won’t be enough, the device makers say.

“Left unaddressed, these cuts could eliminate the physician office as a viable setting of care for many procedures and reduce treatment options for Medicare beneficiaries. At a minimum, the reductions will lead to a shifting of procedures from the office setting, which is more accessible and clinically appropriate for many beneficiaries, to hospital outpatient departments and ambulatory surgery centers,” the letter says.

“We believe that it is essential for Congress to enact H.R. 3674 in the near term and, over the long term, work with stakeholders to address a fundamental asymmetry in the PFS that disproportionately, negatively impacts office-based specialty providers,” the device makers say.

The Providing Relief and Stability for Medicare Patients Act of 2023, H.R. 3674, would provide two years of targeted relief for specialty care practices through an increase to the non-facility practice expense relative value units (PE RVUs) for services performed in an office-based setting that require the use of high-tech medical devices or pieces of medical equipment. This relief is targeted at services that were most negatively impacted by the clinical labor policy, the device makers note.

The bill would also require the Government Accountability Office to analyze site-of-service migration, consolidation, and increased Medicare beneficiary cost-sharing in addition to coming up with recommendations. The bill was introduced in June by Rep. Gus Bilirakis (R-FL), Tony Cárdenas (D-CA), Greg Murphy (R-NC) and Danny Davis (D-IL). -- Michelle M. Stein (mstein@iwpnews.com)