Payment and Practice Management: Constant Change

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February 1, 2014 Volume 78, Number 2
Payment and Practice Management: Constant Change Sharon K. Merrick, M.S., CCS-P

I write this as we await release of the Final Rule for the CY2014 Medicare Physician Fee Schedule (MPFS). Typically, this rule is made public in early November but was delayed this year due to the government shutdown in October 2013. The Final Rule is the venue in which the Centers for Medicare & Medicaid Services (CMS) announces new payment rates and policies for the upcoming year. Each year, specialty societies, physician practices and all other stakeholders eagerly review the information in the rule to determine how it will impact the ways that health care will be provided and paid under the new policies. In the coming days, ASA’s staff and physician leadership will analyze the 2014 Final Rule to determine how anesthesiologists can best adapt to a new payment rate, changes to the value of specific services, new requirements for the 2014 Physician Quality Reporting System (PQRS) program and for the 2016 Value-Based Payment Modifier (VBPM).

It is worth noting that this process – adapting to change in health care practice, payment and policy – has been going on for a very long time. New technology can change the way care is delivered. Things that are now basic and fundamental were once new technology and at times met with some opposition. Back in 1834, the London Times made a prediction about use of what was then a new piece of equipment, stating, “That it will ever come into general use, notwithstanding its value, is extremely doubtful; because its beneficial application requires much time and gives a good bit of trouble both to the patient and the practitioner; because its hue and character are foreign and opposed to all our habits and associations.” The paper was talking about a stethoscope.1

Fee schedules go back even farther. Believe it or not, the Code of Hammurabi, which dates back to 1772 B.C., includes laws that pertain to physician payment – and outcomes and quality were considerations even then.2

Law 215: If a physician make a large incision with an operating knife and cure it, or if he open a tumor (over the eye) with an operating knife, and saves the eye, he shall receive ten shekels in money.

Law 218: If a physician make a large incision with the operating knife, and kill him, or open a tumor with the operating knife, and cut out the eye, his hands shall be cut off.

Thankfully, the quality and outcomes provisions that impact payment today are not nearly so dramatic. However, it does seem health care has been in a constant state of flux for the past few years. Not only must we adapt to new coding and billing and payment and quality parameters each year, we now need to do this with more changes coming at us.

Today’s environment, with slowed growth in health care spending, has presented the opportunity for repeal of the Sustainable Growth Rate (SGR) formula, an important part of the method used to determine physician payment rates. The SGR formula mandated negative updates to the Medicare Conversion Factors every year since 2002. Congress has taken action to avert those negative updates since 2003, but that means we don’t know the conversion factor for the upcoming year until Congress takes that action; and even then we don’t know whether the override will cover the full year or only a few months. In 2013, we saw proposals for SGR replacement that have both bipartisan and bicameral support, but the proposals include some elements that are problematic, and it is difficult to predict resolution.

Movement away from volume-based fee-for-service payment seems clear and presents significant change. Alternative payment models such as accountable care organizations, patient-centered medical homes and bundled payments are moving center stage. The Perioperative Surgical Home (PSH) can provide a means for anesthesiologists to demonstrate the value and quality they bring to the table. This will be an exciting year as the ASA Committee on Future Models of Anesthesia Practice works with other ASA committees to further develop and refine the PSH concept.

The transition to ICD-10-CM/PCS scheduled for October 1, 2014 and the impact of Patient Protection and Affordable Care Act implementation make the future even more unpredictable. Donald Rumsfeld may have been talking about the future of our health care system when he spoke of known and unknowns:

“There are things we know that we know. There are known unknowns. That is to say there are things that we now know we don’t know. But there are also unknown unknowns. There are things we do not know we don’t know.”

One certainty is that 2014 will be a pivotal year, and ASA’s leaders and staff will stay active and engaged to advance the practice and secure the future for anesthesiologists and the patients you serve.

Sharon K. Merrick, M.S., CCS-P is ASA Director of Payment and Practice Management.


1. Jervis C. Sound teaching: updating the stethoscope. Future Health IT website. Published January 29, 2006. Accessed December 10, 2013.

2. King LW, trans. The Code of Hammurabi. [Toronto: Typographical Society]; 2011. Accessed December 10, 2013.