New Medicare Fee Schedule Rule Further Illustrates a Broken Payment System

Newswise — The American Society of Anesthesiologists (ASA) announced its opposition to additional Medicare payment cuts included in the Centers for Medicare & Medicaid Services’ (CMS) 2023 Physician Fee Schedule (PFS). Within the fee schedule, CMS proposed Medicare payment cuts to the Anesthesia Conversion Factor and in revised injection codes where imaging is now bundled – reductions that compound the financial strain anesthesia groups are already facing.

Anesthesiologists and other pain medicine physicians have historically been unduly impacted by year-over-year Medicare payment cuts. This trend exacerbates unfair payment policies, as Medicare payment rates for anesthesia services persistently hover around 33% of average commercial insurance company rates, far lower than Medicare payment rates for other specialties, which average 80% of commercial insurance rates.  Anesthesiologists receive payment from Medicare at a tiny fraction of the cost of providing that care.

“Yet another year of Medicare payment cuts shows that the Medicare physician payment system is completely broken. It is well past time for a meaningful and comprehensive overhaul of the Medicare payment system for physicians,” said ASA President Randall M. Clark, M.D., FASA. “For anesthesia and pain medicine services, Medicare payment rates are inadequate due to flaws in the government formula used to calculate anesthesia and pain medicine rates, which is unlike the formula used for other physician payments. There is significant evidence that these inadequate payment rates, rising practice costs, and pandemic-related financial pressures seriously threaten physicians’ practice survival and patient access to care.”

Within the fee schedule, CMS has proposed an anesthesia conversion factor (CF) of 20.7191, representing a decrease of 3.91% from the 2022 anesthesia CF of $21.5623. The 2023 proposed Resource-Based Relative Value Scale (RBRVS) CF is 33.0775. This represents a decrease of 4.42% from the 2022 CF of 34.6062. CMS established this decrease due to a statutorily mandated budget neutrality adjustment for changes in work relative value units (RVUs) and the 0% update scheduled for the PFS through 2025 from the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. For the past five years, CMS’ CF for anesthesia has steadily declined (see chart below), compounding the downward trend in anesthesiologist payment.

Anesthesia and RBRVS Conversion Factor Trends

* *CY 2023 Proposed CF

CMS has also proposed bundling several Current Procedural Terminology (CPT) codes that will likely result in anesthesiologists and other pain medicine physicians receiving less payment for performing the same procedure.

Each of these cuts compound the financial hurt anesthesiologists and their groups are facing with Medicare payments. Last year, Congress passed legislation that deferred some 2022 cuts. Absent congressional action, new cuts will be effective January 1, 2023.

ASA is committed to advocating for changes to the broken Medicare payment system and to ensuring anesthesiologists and other pain medicine physicians are paid fairly for the services they provide to their patients. ASA has supported an inflation adjustment to Medicare payments to allow for the compensation of our physicians and other clinicians to match the rising cost of living across the country. ASA has also supported Congress and policymakers re-evaluating the budget neutrality clauses of the PFS that greatly restrict payment and cause continued decreases in CFs. While acknowledging it will be difficult to predict whether legislative recourse may be delivered in an election year, ASA looks forward to advocating our position before Congress and in working with CMS and other government stakeholders on proposed solutions.

ASA leaders and staff will review CMS’ rule and submit comments by the September deadline. Finalized provisions will become effective January 1, 2023.

Please see our Washington Alert for more details on how the proposed rule will affect anesthesiologists.

 THE AMERICAN SOCIETY OF ANESTHESIOLOGISTS Founded in 1905, the American Society of Anesthesiologists (ASA) is an educational, research and scientific society with more than 55,000 members organized to raise and maintain the standards of the medical practice of anesthesiology. ASA is committed to ensuring physician anesthesiologists evaluate and supervise the medical care of patients before, during and after surgery to provide the highest quality and safest care every patient deserves.

For more information on the field of anesthesiology, visit the American Society of Anesthesiologists online at asahq.org. To learn more about the role physician anesthesiologists play in ensuring patient safety, visit asahq.org/madeforthismoment. Like ASA on Facebook and follow ASALifeline on Twitter.

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