News | Radiology Business | August 31, 2021

2022 MPFS Proposed Rule Wage Proposal Could Negatively Impact Radiology Practices

As a result of applying budget neutrality, specialties like interventional radiology and radiation oncology — which have high medical supply and equipment costs and lower clinical labor costs — are slated for potentially significant reimbursement reductions.

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August 31, 2021 — In the 2022 Medicare Physician Fee Schedule Proposed Rule, the Centers for Medicare and Medicaid Services (CMS) has proposed updating the wages for clinical labor staff. Clinical labor staff, medical supplies and equipment costs are components of direct practice expense inputs (DPEI) — costs directly associated with the provision of a service or procedure. The practice expense components are budget neutral, which means that an increase in payment for one component typically means a proportional decrease in payment in the other components.

As a result of applying budget neutrality, specialties like interventional radiology and radiation oncology — which have high medical supply and equipment costs and lower clinical labor costs — are slated for potentially significant reimbursement reductions.

The American College of Radiology (ACR), in conjunction with the Society for Interventional Radiology and other impacted physician organizations, is exploring all regulatory and legislative options to protect radiology practices and patient access to quality care.

Beginning in 2019, CMS initiated a four-year phase-in to update the pricing for more than 1,400 medical supplies and equipment items. CMS contracted with StrategyGen, a market research company, to review the prices for these inputs, which were last updated in 2004–2005. As some of these inputs yielded significant decreases to the PE relative value units (RVUs), CMS opted to phase in the price changes across four years. Next year marks the fourth and last year of the pricing update for medical supplies and equipment.

With the end of the pricing transition for medical supplies and equipment, CMS now is focusing on updating the third component of PE — clinical labor staff wages. In the proposed rule, CMS explains that it will primarily use the 2019 Bureau of Labor Statistics (BLS) data to update these prices, supplementing with data from the Salary Expert, when BLS data is not available. For some clinical staff types, such as mammography technologist and angiography tech, where a direct comparison was not available, CMS proposed crosswalks to update the pricing.

The updated prices for each of the clinical staff types reflect an increase over current wages. However, even with positive increases in clinical labor pricing, some specialties, such as interventional radiology and radiation oncology, will experience a significant negative impact due to the redistributive effects of CMS’ proposal. The PE RVUs for these specialties are grounded in their higher supply and equipment expenses. Since practice expense is budget neutral, increases in the clinical labor pricing — as well as the final year transition of medical supply and equipment pricing updates and overall impacts to changes in work RVU — has resulted in a negative impact, estimated at -9% for interventional radiology and -5% for radiation oncology. Radiology and Nuclear Medicine have an estimated -2% impact.

The Consolidated Appropriations Act, 2021 (P.L.116-260) included a 3.75% adjustment to the 2021 conversion factor which contributed to the reduction of payment cuts to radiologists from 10% to approximately 4%. If Congress does not intervene and there is no 3.75% bump to the proposed 2022 conversion factor, the potential higher end of the overall percent reduction for 2022 is approximately 6% for radiology, 13% for interventional radiology, 5% for nuclear medicine, 14% for radiation therapy and 8% for radiation oncology.

CMS is soliciting comments from stakeholders regarding their clinical labor pricing effort, including specific concerns or suggestions related to proposed prices. Similar to the medical supplies and equipment pricing update, CMS also is considering a four-year phase-in for the clinical labor pricing update.

The American College of Radiology (ACR) continues to review the proposed clinical labor pricing update and its impacts on radiology, and will provide feedback to CMS in its 2022 Medicare Physician Fee Schedule proposed rule comment letter, due Sept. 13.

For more information: www.acr.org

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