By Steve Mason, CEO of the Medical Segment at Cardinal Health
Unless U.S. lawmakers act before January 1, 2023, Medicare-participating physicians face 4% across-the-board cuts to Medicare reimbursements. As it is, these physician payment rates do not account for inflation or pandemic-related challenges in provider practice costs. Such reimbursement cuts could force some provider practices to close and will undoubtedly put financial strain on others. Simply put: Medicare reimbursement rate reductions would threaten patient access to equitable healthcare.
Cardinal Health helps connect the clinical and operational sides of the healthcare industry. As a critical link in the U.S. healthcare supply chain, we seize opportunities to address healthcare’s most complicated challenges. Why? Because our commitment, always, is to help our customers provide the best possible care to patients.
This is why we are urging bipartisan congressional support to move quickly to avert the looming Medicare provider payment cuts and to act on the following issues that will ensure patient access to care:
- Avoid 4% reductions in Medicare payments, by passing legislation that prevents the Statutory Pay-As-You-Go (PAYGO) sequester from taking effect. This sequester imposes automatic spending reductions at the end of the year; it is written into law and can’t be changed without new legislation. According to the American Hospital Association, the sequester would mean a $38 billion cut in Medicaid payments in 2023, adding to the financial pressures that hospitals, physician practices and other healthcare facilities are facing, including inflation, workforce shortages and increased costs of equipment and supplies.
- Offset the 4.47% reduction to the Medicare physician conversion factor. This conversion factor is a complicated calculation that determines physician reimbursement for health services for Medicare beneficiaries. Last year, Congress approved a one-time 3% increase to this conversion factor, which will expire at the end of this year without congressional action.
- Extend the 5% alternative payment model (APM) incentive payment for six additional years. This incentive encourages participation in APMs, which link physician reimbursement to the quality of care and patient outcomes, rather than the number of patients served. If the incentive is extended, more healthcare providers will have time to transition to APMs and to expand value-based offerings, like wellness programs, care coordinators, and meal programs, which have been shown to improve health outcomes.
In addition, Cardinal Health is urging congress to improve clinical care delivery and alleviate administrative burdens by:
- Extending the Acute Hospital Care at Home program under Medicare (the Hospital Inpatient Services Modernization Act [H.R. 7053/S. 3792]) for an additional two years beyond the end of the COVID-19 public health emergency. This program allows patients with acute illnesses to be treated in their homes; if it is not extended, those who are currently receiving care in the home are at risk of losing that care.
- Allowing Medicare reimbursements for critical lab tests with the Saving Access to Laboratory Services Act (SALSA) (H.R. 8188/S. 4449). Without this legislation, Medicare beneficiaries could lose access to lab services. Cardinal Health supports more than 6,500 labs, helping them to address industry challenges including product availability, labor shortages, specimen integrity and more.
- Allowing prior authorizations in the Medicare Advantage program with the Improving Seniors’ Timely Access to Care Act of 2021 (H.R. 3173/S. 3018). By allowing prior authorizations, this legislation would prevent disruptions to care, and, at the same time, reduce administrative burdens on healthcare practices.
At Cardinal Health, we are grateful for the dedication and remarkable service that those in our health systems deliver to their patients. We are immensely proud to support their work, and just as proud to advocate on their behalf.
Steve Mason is the chief executive officer of the Medical Segment at Cardinal Health – a global provider of medical products and supply chain services across the healthcare continuum from hospitals to laboratories, physician offices, surgery centers and patients in the home. Mason has more than 20 years of experience in leadership roles across Cardinal Health’s Medical and Pharmaceutical Segments. He is an executive sponsor for the company’s PROUD Network, an employee resource group supporting LGBTQ+ and Ally employees. He also serves on the board of the United Way of Central.