While the general Medicare conversion factor (CF) will decrease by 4.44 percent on March 1, 2003, the reduction in the anesthesia CF will be less steep: 3.43 percent.*

The 4.44-percent cut will, however, apply to pain medicine, critical care and other nonanesthesia services provided by anesthesiologists. The new and old CFs are shown in Table 1.


The table of actual anesthesia CFs for the 92 Medicare localities can be found here. (Note: there is a single national CF for other services, which are adjusted for geographic differences through changes to their relative values.)

The 23-percent smaller anesthesia cut is the end result of two years of intense efforts to convince the Centers for Medicare & Medicaid Services (CMS) that Medicare is underpaying anesthesia. Beginning in the summer of 2000, ASA Committee on Economics Chair Alexander A. Hannenberg, M.D., and members Norman A. Cohen, M.D., Karl E. Becker, Jr., M.D., and others, including past president Neil Swissman, M.D., former committee chair L. Charles Novak, M.D., and Washington Office staff, met repeatedly with the American Medical Association (AMA)/Specialty Society Relative Value Update Committee (RUC) and with CMS officials to demonstrate the unequal treatment of anesthesia and other services under the Medicare Fee Schedule.

The fourth and final round of analyses mandated by the RUC yielded consensus data showing that anesthesia “work” was undervalued by 13.57 percent. In the Final Rule on the Medicare Fee Schedule published in the Federal Register on December 31, 2002 (which will take effect on March 1, 2003, leaving the 2002 Medicare payment rates unchanged for January and February), CMS decided that the RUC had not made an acceptable recommendation on the anesthesia issue and granted a work increase of just 2.1 percent.

Since physician work represents 78 percent of the anesthesia CF, with practice expenses and professional liability insurance costs accounting for the other 22 percent, the final percentage increase to the anesthesia CF would have been 1.6 percent, were it not for the across-the-board 4.44-percent decrease and several other very small technical adjustments.
As disappointing as this CMS decision is, we note that our efforts have saved nearly $16 million ($15,654,686, based on 2001 total anesthesia payments of $1.55 billion) that would otherwise have been cut from Medicare spending on anesthesia services in 2003 alone.

A 3.43-percent reduction is, of course, a slap in the face, especially coming on top of last year’s 6.89-percent decrease. ASA leadership and its members as well as staff will be working hard to fix this iniquity.

Other Anesthesia/Pain Medicine Issues in the Fee Schedule Rule
1. Base units for new codes. ASA encountered much greater success in obtaining Medicare approval of the base units assigned to procedures whose Current Procedural Terminology (CPT™) codes are new or revised in the ASA 2003 Relative Value Guide (RVG) and CPT™ books. Except for 00326 (anesthesia for all procedures on the larynx and trachea in children less than 1 year of age), Medicare’s base units for the new codes will match those in the RVG. The RVG lists this code with eight base units, but Medicare will allow only seven. As a pediatric service, 00326 will not have a high Medicare frequency. The work RVUs assigned to the new codes for continuous brachial, sciatic and femoral blocks are in keeping with the survey results that ASA presented to the RUC last April. The 15 codes affected appear in Tables 1 and 2 of the “Practice Management” column in the November 2002 ASA NEWSLETTER.

2. Add-on codes (burn, obstetric codes). In the proposed rule on the Medicare Fee Schedule published in the June 28, 2002, Federal Register, CMS announced its intent to revise its handling of add-on anesthesia codes, i.e., the burn and obstetric codes adopted by Current Procedural Terminology™ in 2001 and 2002. ASA will support this proposal, and it is unlikely that there will be any opposition” (“Practice Management” column, August 2002 ASA NEWSLETTER).

There was indeed no opposition to the proposed treatment of the three anesthesia add-on codes (one in the burn section [+01953] and two in the obstetric anesthesia section [+01968 and +01969]). Normally when the physician furnishes more than one anesthesia service in a single encounter, only the code with the higher base unit value is reported. Time includes the total for all procedures. An add-on code, however, is always reported in conjunction with a primary procedure code. It is never reported alone. Thus the general rule of reporting only the code with the higher base value does not apply.

Code 01952 describes anesthesia care for burn excision or debridement covering between 4 percent and 9 percent of the total body surface area. Code +01953 is reported along with 01952 for each additional 9 percent of the total body surface area. Carriers will recognize a base unit value for both codes. The time for +01953 is to be included in that reported for 01952.

Code 01967 describes neuraxial labor analgesia that ends with a vaginal delivery. There are different methods of billing time for 01967. Either of the two add-on codes (+01968, anesthesia for cesarean delivery following neuraxial labor analgesia; or +01969, anesthesia for cesarean hysterectomy following neuraxial labor) may be reported together with 01967. Time for the cesarean delivery/hysterectomy add-on codes is reported as it is for any surgical anesthesia service; the accounting method for time for the add-on is not the same as for the primary code. Anesthesia time for the add-on code is to be reported separately from the primary code. Table 1 in the August 2002 NEWSLETTER “Practice Management” column may provide further clarification. Medicare will recognize base units and time units for each code.

Tell Medicare Before March 1 Whether You Will Be a Participating Physician
Because the 2003 Medicare Physician Fee Schedule rule did not appear in the Federal Register until December 31, 2002, physicians have had longer than usual to inform their carriers of their participation status for the new year. Participating physicians agree to accept the Fee Schedule amount as payment in full. Nonparticipating physicians, or “non-pars,” may balance-bill patients for a total of up to 109.5-percent of the Fee Schedule amount, but Medicare will send the reimbursement directly to the patients rather than to your account.

If you wish to change your status, by either enrolling or withdrawing in the Medicare program, you should file your election with your carrier no later than February 28, 2003. Disregard earlier dates contained in any “Dear Doctor” letter you may have received, they are wrong. An explanation of physicians’ options for participation/nonparticipation in the Medicare program is on the ASA Web site at <www.ASAhq.org/options.pdf>.

Whichever status you choose will be retroactive to January 1, but the carriers will not automatically adjust any claims already processed. For further information, consult the CMS Program Memorandum at <cms.hhs.gov/manuals/ pm_trans/AB02181.pdf>.

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File Your January and February Medicare Claims A.S.A.P.

Claims for services provided to Medicare patients in January and February will be paid at the 2002 rates. If they are not in your carrier’s system by March 1, however, the carrier will pay at the 2003 rate and adjust for the difference later. Medicare officials have urged that specialty societies alert members to the need to file January and February claims early so as to avoid receiving a too-low payment amount in March and an adjustment after July 1.

The delay in the effective date of the new, lower 2003 Medicare rates resulted from the late publication of the Fee Schedule rule. Those new lower rates ($16.03 national average anesthesia conversion factor; $34.59 medical/surgical conversion factor) may not go into effect at all if Congress passes legislation freezing the 2002 rates. If such legislation passes by early February, the Centers for Medicare & Medicaid Services (CMS) and the carriers will have time to take the 2003 rates out of their information systems. If it does not, the only way CMS will be able to operationalize the change in the rates is by processing claims according to the date of submission. Late this summer, CMS will send physicians a single check for the total amount of the underpayment for January and February claims filed after March 1.