• AAFP Recognizes Wins in Congress’ Medicare Payment Reprieve

    Important Clinical Labor Pricing Boost Set to Take Effect Jan. 1

    December 13, 2021, 2:15 p.m. News Staff — Following months of forceful AAFP advocacy, Congress passed legislation delivering several key payment wins to family physicians on Dec. 9. The Protecting Medicare and American Farmers From Sequester Cuts Act (S. 610) increases the 2022 Medicare conversion factor by 3% and delays Medicare sequester cuts, results for which the Academy had steadily lobbied.

    Capitol building in winter

    In a further victory for AAFP members, S. 610 — unlike competing legislation introduced last month to address Medicare physician payment — leaves untouched an update to clinical labor pricing included in the 2022 Medicare physician fee schedule and Quality Payment Program final rule. CMS’ change, which the Academy recognized as long overdue, takes effect Jan. 1.

    Clinical labor pricing is used to calculate the practice expense portion of Medicare physician payment rates to account for the cost of staff salaries and benefits. CMS had not updated the Bureau of Labor data factored into those calculations since 2002. The Academy strongly opposed the bill that would have halted this change. In a Dec. 3 message to AAFP members, Academy President Sterling Ransone, M.D., of Deltaville, Va., called the clinical labor pricing boost family medicine’s “chance to slow workforce shortages and stabilize independent physician practices.”

    The bill’s revision of planned decreases to Medicare clinical lab payments marks another win for recent AAFP advocacy.

    The bipartisan S. 610, the Academy said in a Dec. 10 statement lauding the bill, “supports Medicare providers as they respond to the public health emergency and helps ensure access to care for Medicare patients.”

    Specifically, the bill

    • replaces 2021’s 3.75% conversion factor increase with a 3% boost for 2022, a narrower reduction than the one CMS announced in its 2022 MPFS final rule;
    • defers until 2023 a 4% Medicare physician payment cut that would have happened in 2022 as a result of PAYGO sequestration triggered by passage of the American Rescue Plan, the $1.9 trillion COVID-19 recovery and stimulus package the Academy backed (mandated by the Pay-As-You-Go Act of 2010, the so-called PAYGO sequester is meant to offset federal deficit increases stemming from large measures such as the ARP); and
    • continues exempting Medicare from sequestration through March 31.

    From April 1 through June 30, Medicare sequestration will commence with a 1% reduction in payments from Medicare administrative contractors, followed by an additional 2% payment reduction from July 1 through the end of 2022. Beneficiary cost-sharing will remain the same.

    The 2022 Medicare conversion factor will be about 0.8% lower than the 2021 CF, but Medicare allowed charges for family medicine will be similar to those in 2021. CMS estimated in the 2022 MPFS that family medicine would see an increase of 1% in allowed charges if the conversion factor remained the same; that 1% increase will effectively negate the difference between this year’s 3.75% CF bump and 2022’s 3%.

    The bill’s conversion factor boost echoes action that Congress took last December (after pressure from the Academy) to mitigate CMS’ cut to 2021’s CF, which was mandated by budget neutrality requirements. The Academy continues to lobby against the budget neutrality statute and, in the Dec. 10 statement, signaled advocacy to come in 2022.

    “We look forward to working with Congress on a tangible, meaningful solution to address longstanding issues with the MPFS, including budget neutrality, which undermines the country’s ability to invest in primary care,” the Academy said.