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January 11, 2023

Contact: Grant Herring

The Impact of Clinical Labor Cuts: Providers Forced to Close Doors and Reduce Services

With the new 2023 Medicare Physician Fee Schedule (MPFS) cuts
finalized, USPA expects more closures nationwide


WASHINGTON, DC — With the new, increased cuts to clinical labor officially in effect, the United Specialists for Patient Access (USPA) is saddened that more specialty providers will undoubtedly be forced to close their doors. 


Before Congress failed to address these ongoing clinical labor cuts, USPA warned about the impact they would have in undermining patients’ access to care, widening the health equity gap, and putting new, unprecedented financial pressure on providers.


Data over the past decade shows a troubling trend of office-based centers closing. USPA believes drivers in this trend include:


  • Chronic underfunding of the overall PFS.

  • Faulty analyses of specialty overcompensation.

  • PFS rebalancing policies of reimbursement away from specialty care.


Unfortunately, recent policies contained in the 2021 Physician Fee Schedule and the 2022 Physician Fee Schedule only accelerated this trend. 


These painful and unnecessary cuts are just part of a long series and history of cuts that have already limited care for patients seeking cancer help, dialysis maintenance, limb salvage, and amputation prevention, women seeking fibroid embolization to avoid unnecessary hysterectomies, seniors needing and relying on physical therapy, and many others. 


Following the announcement of the 2023 MPFS, specialty providers are speaking out with their center closure stories: 


A specialty provider from Maryland: “When I first joined my organization in 2006, we had six freestanding centers in Maryland. They have all closed except one. The reason is Medicare reimbursement cuts and Maryland laws that disallow multispecialty oncology groups for freestanding centers but allow them for hospitals. These dynamics have resulted in an environment where freestanding radiation therapy centers won’t be able to remain viable in Maryland if reimbursement cuts continue.”


A specialty provider from Connecticut: “We have seen office-based radiology closures as a result of reimbursement cuts in both the Medicare and the Medicaid payment systems. We are constantly stressing to our federal and state legislators that this trend decreases access overall, especially worsening health inequity in underserved areas of the state.”


A specialty provider from Montana: “I closed my office in Bozeman, Montana, in July of 2022. One of the primary reasons was the ongoing clinical labor, and E/M Medicare cuts to office-based specialists and – since private payors often follow Medicare – these cuts were followed by BCBS of MT cutting reimbursement by 30%. Those two payors represent about 65% of my practice. With those massive cuts, it was no longer worth the time and effort it takes to run a good practice that focuses on low-cost excellent patient care.”


A specialty provider from Tennessee: “My clinic has been the sole provider in our community for many of our services, especially complex care of deep venous disorders and limb swelling. However, I made a decision this year to sell my practice to a dominant regional health system. As physicians such as myself migrate from private medical clinics, procedures will shift from the lower-cost physician office to hospital outpatient and ambulatory surgery centers where the cost to Medicare will be greater and services will be available in fewer locations and less timely or convenient. There will be more delays in care which for some patients means more advanced disease or prolonged suffering and disability before the medical problems are effectively addressed. The really sad part of the problem is that in the name of PFS ‘budget neutrality,’ some of the most innovative, productive, and cost-efficient physicians are being driven into early retirement, financial failure, or into less-productive settings while increasing the total cost of care to the Medicare/Tricare system.”



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