December 2001
Volume 65 |
Number 12
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PRACTICE
MANAGEMENT
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| Medicare Cuts Physician
Payments for 2002 |
Karin Bierstein, J.D.
Assistant Director of Governmental Affairs (Regulatory)
Medicare will reduce the anesthesia conversion factor (CF) by
6.89 percent starting on January 1, 2002. This figure includes
a 5.4-percent cut in the overall Medicare payment level for all
services, consisting of a 4.8-percent “negative update”
plus standard budget-neutrality adjustments, and an additional
anticipated reduction in Medi-care’s calculation of anesthesia
practice expenses. Thus the CFs for anesthesia and for all other
medical and surgical services will be the following:
| National Anesthesia CF: |
2001: $17.83; |
2002: $16.60 |
| Other Services CF: |
2001: $38.26; |
2002: $36.20 |
A number of other specialties also will see a total Medicare
cut greater than the 5.4 percent about which so much has been
written elsewhere, because of adjustments to the practice expense
component of their payments. All of these practice expense cuts
represent the final phase of a four-year transition to the lower
practice expense valuations mandated by Congress in 1994. The
cut for “surgical” services, which are paid according
to the Resource-Based Relative Value System (RBRVS), is applied
directly to the practice expense relative values for each of those
services. Pain medicine and invasive monitoring procedures are
among the RBRVS services. Anesthesia services, however, are compensated
according to the ASA Relative Value Guide (RVG), and since there
are no separate practice expense units in the RVG, increases or
decreases in practice expenses must be reflected in the CF itself.
The different anesthesia conversion factors for the 90 Medicare
localities appear in [Table 1]. Geographic
adjustments for RBRVS services, like the practice expense changes,
are made to the relative value units and not to the conversion
factor.
Why will there be such a large and unprecedented negative
update for 2002? Federal law requires the Centers for Medicare
& Medicaid Services (CMS) to use a flawed formula to calculate
each year’s update to the Medicare Fee Schedule. Briefly,
growth is limited by changes in the Gross Domestic Product, tying
Medicare spending to the business cycle rather than to patient
needs. The inflation adjustment is based on proxy factors such
as nonclinical workers’ earnings and does not account for
technological advances or new mandated benefits such as mammography
screening. Use of flawed 1998 and 1999 data has inappropriately
removed billions of dollars from the permitted spending target.
As a result of these problems, as well as those that surrounded
an earlier spending target formula, Medicare payments during the
past 10 years have risen by an average of just 1.7 percent per
year or 13 percent less than practice costs, according to the
American Medical Association. AMA, ASA and several other medical
associations are leading the efforts to obtain congressional relief
(see discussion on S. 1707 in “Washington
Report” ).
What became of the hoped-for increase in the anesthesia CF?
The disappointing refusal of the AMA/Specialty Society Relative
Value Update Committee (RUC) to recommend any increase to CMS
last summer resulted in the agency’s doing nothing. The RUC,
it must be remembered, is playing a zero-sum game: valuing one
specialty’s services more highly entails a cut in the overall
conversion factor. Agreeing that the “physician work”
component of all 250+ anesthesia services was undervalued by 13.49
percent (the average of 19 representative codes studied in detail)
would have cost the rest of medicine an approximate $0.25 decrease
in the CF, and therein lay our defeat in this round.
As in the case of the negative update, we are not giving up.
Nor does CMS expect us to; in the discussion of the RUC valuation
of anesthesia work published as part of the 2002 Physician Fee
Schedule Final Rule in the November 1 Federal Register, the agency
wrote, “The RUC has informed us that it will continue to
look at anesthesia work beginning at its first meeting in CY 2002.
We will review the RUC Recommendation and address anesthesia work
in next year’s proposed physician fee schedule rule.”
We have at least succeeded in persuading CMS to continue studying
anesthesia in 2002 rather than deferring further consideration
until the next regular five-year review of the fee schedule.
Other Fee Schedule Decisions
Updating the Medicare Base Units. On a much more positive
note, CMS has now agreed to update the base units in its anesthesia
database. This will mean far fewer discrepancies between the base
units in the ASA RVG and those allowed by Medicare. The Medicare
units had not been updated since the early 1990s, although there
had been changes to the RVG every year. Table
2 lists the 10 codes that have now been harmonized.
Two codes that will continue to differ between Medicare and the
ASA RVG are 00142 (cataracts) and 00147 (iridectomy). Medicare
decided at the outset that the RVG’s 6 base units for each
of these procedures was too high and that only 4 units would be
allowed.
For the future, as codes continue to be added and revised annually,
CMS may adopt base units that diverge from those published in
the RVG.
The RUC, when it values new or revised codes, may disagree with
the RVG value (e.g., the RUC recommended one less unit for angioplasty
than allowed in the RVG). CMS in turn may disagree with the RUC
(e.g., with respect to the 22 new or revised codes for 2002, CMS
agreed with 20 of the RUC recommendations, but lowered the base
units for the other two procedures by one unit each). One of those
procedures’ base units had been increased above the RVG level
by the RUC, however, so Medicare and the RVG are now consistent.
The two codes that differ are 00797 (anesthesia for gastric restrictive
procedure for morbid obesity), for which the RVG allows 9 units
and Medicare=8 units; and 01916 (angioplasty), RVG=6 units and
Medicare=5 units.
To determine the other new base units, consult the 2002 ASA RVG,
to be published shortly. Contact <publications@asahq.org>
to check availability and to order.
Critical Care. In the proposed fee schedule rule published last
June, CMS raised questions about including payment for postoperative
critical care services in the surgeon’s global fee. ASA,
the American Society of Critical Care Anesthesiologists and numerous
individual physicians protested the possibility that CMS might
thus eliminate the multidisciplinary services provided by a variety
of specialists in the surgical intensive care unit. The final
rule promises that CMS will carefully review the information received
in determining “whether to make a future proposal.”
Trigger Point Injections. The current code for trigger
point injections, CPT™ 20550, has been revised and new codes
created to eliminate confusion regarding the number of times that
the trigger point code may be billed in a single session. New
code 20552 will describe “Injection: Single or Multiple Trigger
Point(s), One or Two Muscle Groups”; code 20553 will be used
for “Three or More Muscle Groups.” CMS has applied the
0.86 units currently allowed for 20550 as interim work values
to the new trigger point codes.
The practice expense allowances for trigger points and other
pain medicine procedures have changed as well, resulting in both
increased and decreased payment amounts. The payment for trigger
point injections performed in the physician’s own office
has decreased by about one-third, whereas it is virtually unchanged
if the procedures are done in a hospital or ambulatory surgical
center. Conversely, payments for most of the nerve block codes
have increased in the office and decreased in the “facility.”
ASA is continuing its analysis of these changes.
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