• CMS’ Clinical Labor Pricing Update Must Stay on Course

    December 3, 2021, 12:31 p.m. — Across a wide array of high-profile industries, the story of the COVID-19 pandemic— apart from the virus and its devastating impact on public health — has been the same: massive disruption, financial challenge, worker burnout, staffing crunch. 

    Physician with stethoscope examining child

    In no professional sector has this sequence of impacts carved a deeper crater than it has in ours. We are emerging from a crisis that has demanded our all, gotten our best and, in too many instances, stolen even more.

    Fewer than 30% of primary care physicians say their practices are on solid financial footing, according to one recent survey; another such poll found that 27% of primary care practices have clinician positions they can’t fill. Close to half of primary care practices have seen clinician turnover, limiting their ability to care for patients. 

    The Academy very much had these stark realities in mind last month when we welcomed CMS’ long-overdue clinical labor pricing update in the 2022 Medicare physician fee schedule. CLP is used to calculate the practice expense portion of Medicare physician payment rates to account for the cost of staff salaries and benefits, and CMS hasn’t updated it in almost 20 years. It has been using data from the Bureau of Labor Statistics from 2002! Since then, the mean annual wage for registered nurses has risen by 60% (about $30,000), and the average wage for medical assistants has risen 30%. Medicare rates today don’t reflect any of these cost increases, as many of us well know.

    We’ve waited two decades for the agency to address the longstanding payment distortions between primary and select specialty care stemming from outdated wage data, so fixing it would be a big deal any year. Right now, though, it’s absolutely essential. The ongoing public health emergency has contributed to higher rates of retirement and career change for nurses and medical assistants, shortening the supply as demand surges.

    In my own Deltaville, Va., family practice, I rely on nurses and medical assistants, among other clinical staff, to help provide the best possible care to my patients. They’re vital team members, and CMS’ update to clinical labor pricing will ensure that I can pay them adequately — and that practices like mine can do the same while recruiting to rebuild and grow again after two years of uncertainty. The clinical labor pricing update is critical to our specialty’s future.

    That’s why, at the end of this message, I’m going to ask you to click over to three AAFP advocacy campaigns putting you in touch with your lawmakers. They need to hear from each of us that family physicians strongly oppose legislation that would halt CMS’ clinical labor pricing update.

    Equally important, we must line up behind a separate bill that would prevent Medicare cuts to physician payment by extending this year’s conversion factor increase before it expires on Dec. 31. A continuing resolution passed Dec. 2 fails to address these impending Medicare cuts, a legislative oversight that the Academy, together with our Group of Six partners, immediately called on Congress to correct.

    Our united voice here has never been more important because, unfortunately, the budget neutrality requirement that bedevils Medicare physician payment is once again creating conflict between primary care and some subspecialties that are projecting negative effects due to the CLP update. Groups representing cardiologists, vascular surgeons and radiologists, for instance, say that using appropriate wage data will lead to worse outcomes for their patients.

    Here’s the thing, though: Primary care physicians are the pillars of our health care system. We diagnose and treat, long term, the multiple conditions for which cardiologists or vascular surgeons are not our patients’ initial points of contact. We work to keep our patients healthy and to keep them from facing the scary outcomes posited by the rhetoric against this necessary policy update.

    I’m worried about some different scary outcomes. The staffing and financial issues I’m talking about have contributed to an acceleration of hospitals acquiring physician practices and a hastening of physicians’ departure from independent practice. This kind of consolidation increases prices for health care services, raises insurance premiums and harms low-income communities by worsening health disparities and reducing access to essential services in rural areas.

    Updating clinical labor pricing will help reverse these harmful trends with the stroke of a pen. This is our chance to slow workforce shortages and stabilize independent physician practices. Please add your voice to the AAFP’s advocacy.

    Click here to support the bill protecting Medicare physician payment.

    Click here to oppose legislation that would worsen staffing shortages.

    Click here to tell your senators why clinical labor pricing policy must be updated now.

    Sterling Ransone, M.D., is president of the AAFP.



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    The opinions and views expressed here are those of the authors and do not necessarily represent or reflect the opinions and views of the American Academy of Family Physicians. This blog is not intended to provide medical, financial, or legal advice. All comments are moderated and will be removed if they violate our Terms of Use.