On November 2, the Centers for Medicare and Medicaid Services (CMS) released the CY 2022 Medicare Physician Fee Schedule final rule. The final rule implements on January 1, 2022, the policy to update direct practice expense clinical labor rates beginning in CY 2022, but modifies this policy to be phased in over four years and by using median Bureau of Labor Statistics (BLS) wage data (as opposed to mean BLS wage data) and the 2021 BLS fringe benefits multiplier of 1.296 (as opposed to the 2002 BLS fringe benefits multiplier of 1.366). The four-year phase in and revised BLS wage and fringe benefits inputs will mitigate the impacts of this policy and enable practices to better absorb its impacts.
“AUA strongly advocated against the clinical labor rate update as originally proposed and we are grateful to CMS for listening to our professional input and implementing a four-year phase-in and modified BLS wage and fringe benefits data,” said Dr. Eugene Rhee, AUA Public Policy Council Chair. “While we still believe that a one-year delay of this proposal would have been appropriate, these modifications will mitigate the impacts of this policy change. Urologists must be able to provide care in the most appropriate setting to ensure our patients – particularly those in rural and underserved communities – have access to the care they need. The AUA will continue to work with CMS to ensure that we are able to do so.”
In our comment letter to CMS, AUA advocated a number of changes to this policy (four of which were accepted):
- Phase the update in over a four year period
- Use the median instead of the mean BLS wage rate data
- Use a current and accurate fringe benefits multiplier
- Implement a more regular review process (e.g., every 5 years)
- Delay the proposal for one year
- Implement a device offset
AUA was active on several fronts to ensure the clinical labor rate update was not implemented in CY 2022 as proposed. In July, AUA began working with several other specialty societies as part of a Clinical Labor Coalition in order to address this issue with a unified front (and submitted a comment letter to CMS as part of this effort). On August 25, AUA met with CMS and raised the proposed clinical labor rate update issue. On October 7, AUA and the Clinical Labor Coalition met with the White House Domestic Policy Council and on October 25, AUA and the Clinical Labor Coalition met with the Office of Management and Budget (OMB) to discuss the proposal to update direct practice expense clinical labor rates. During these meetings, Dr. Thomas Turk spoke about urologic procedures performed in the non-facility office setting that require expensive devices.
Additionally, CMS finalized the reduction to the Medicare conversion factor from $34.8931 (2021) to $33.5983 (2022); this reduction is largely a result of the expiration of the 3.75% conversion factor increase for CY 2021 included in the Consolidated Appropriations Act, 2021 in response to the COVID-19 public health emergency. CMS has no statutory authority to avoid this reduction and any further increase in the conversion factor requires Congressional action; AUA continues to engage with Congress on this issue. The AUA will continue to analyze the CY 2022 Physician Fee Schedule final rule in the coming days and will provide a deeper analysis on several other Medicare policies; please be sure to check back for further updates. For more information on the final rule, visit the CMS website.