ASA Update from President Ron Harter on Change Healthcare and Medicare Payment Cuts

Dear colleagues,

I am writing to update you on two critical issues impacting our practices—the Change Healthcare (CHC) cybersecurity attack and system shutdown and the recent congressional passage of a partial Medicare payment “doc fix.”

The CHC cybersecurity incident is nothing short of a catastrophe, impacting anesthesia groups large, medium, and small, and anesthesiologists working in all types of practice settings throughout the United States. For the affected practices, the disruption has delayed thousands, and in some instances millions, of dollars in unprocessed and uncollected claims. Without routine payments, anesthesia groups are, as one member described it, “Facing a worse financial situation than in the early days of COVID-19.”

What’s more, the lack of transparency and scarcity of information from CHC as to when they expect to resolve the issue further compounds the crisis and has left many anesthesiology practices in limbo.

Earlier today, I joined several other physician leaders on a call with a senior member of the U.S. Department of Health and Human Services (HHS) during which we were briefed on this situation. HHS and the Centers for Medicare and Medicaid Services (CMS) are encouraging private payers to produce advance payments and allow for the submission of paper claims—something that we have fully supported. We also heard that Optum and Change Healthcare will be establishing a temporary portal to help facilitate the movement of claims in the coming days. However, it seems likely that a full recovery for Change Healthcare may take some time. I am hopeful that HHS’ actions and those of private insurers will soon provide some relief that our practices require. 

This call follows on the heels of a formal ASA communication sent earlier in the week directly to HHS Secretary Xavier Becerra detailing ASA’s grave concerns about the impact of the CHC system shutdown on our members’ practices. I also noted our frustration that CHC has not demonstrated the necessary level of transparency or accountability for this crisis. My letter concluded with the request that, in light of the magnitude and severity of this system breakdown, there is a strong need for additional government regulation of large national technology vendors and insurers to prevent the recurrence of such disruptive attacks in the future. 

For the time being, if you are using CHC to submit Medicare claims, Medicare has provided some flexibilities aimed at alleviating some of the regulatory burdens, but I recognize that it will still be difficult for many of you to fill the short-term financial gaps you’re facing. We will continue to push for additional relief for our practices.

With regard to Medicare payments, on March 6, Congress passed a bipartisan package to fund the government for the remainder of the fiscal year. Much to our disappointment, the package included only partial relief for the scheduled 3% plus payment cut that took effect on January 1. Our payments will still be subject to an approximately 1.5% reduction on our conversion factors for the remainder of the year, with no retroactive relief back to January 1. The exact new resource-based relative value scale and anesthesia conversion factors will be communicated once they are recalculated by CMS. 

We worked very hard with our colleagues in the Surgical Care Coalition and with the American Medical Association seeking complete relief from the payment cut. Our grassroots efforts were strong; I thank each of you who contacted your lawmakers on this issue. Regrettably, Congress would not implement a fix that would have merely kept us at 2023 payment rates. We enjoyed strong support from both GOP and Democrat physicians in Congress, as well as other pro-physician lawmakers, but unfortunately there were others in Congress who were disappointingly indifferent to our request.

As has been clear for some time, the Medicare payment system is broken, and is only getting worse. We are putting our weight behind two fundamental pieces of legislation. The first is adding a mandatory annual inflation adjustment to physician payments. Other sectors of Medicare, including the facilities where we work, have inflation adjustments that have been in place for many years. We don’t. It’s time to fix that inequity. Second, we must reform the punitive budget neutrality mechanism under the current fee schedule. Under budget neutrality, positive adjustments made by CMS to one CPT code must be offset by negative adjustments or cuts to other CPT codes. It’s a deeply flawed and antiquated way to run a government health care program, and we continue to partner with our physician specialty colleagues to pass these bills into law.           

I certainly wish there were better news to share, but I felt these issues were of sufficient gravity that they should be messaged to each of you. I thank you all for the exceptional skill, knowledge, and professionalism you demonstrate every day, despite the many challenges we face in providing care for our patients.