July 24, 2023

This month’s release of the 2024 Medicare Physician Fee Schedule (PFS) Proposed Rule marks another milestone for a federal agency that remains dead set on reducing payments to hardworking medical professionals. Rather than a milestone, some would liken it to a millstone—burdensome and heavy, and hung around the necks of the nation’s anesthesia providers. There is no rest for the weary, and it appears there are no raises for the tireless practitioners of the pain-easing arts.

But reimbursement rates are only part of the story. The rule contains other proposals that would have particular application to our readers, if finalized. With that in mind, the following will act to summarize some of the more pertinent proposals found within the proposed rule for anesthesia providers.

Background on the PFS

Since 1992, Medicare reimbursement of provider services has been made under the PFS. Payments are based on resources typically used to furnish the service. Relative value units (RVUs) are applied to each service for (a) work, (b) practice expense, and (c) malpractice expense. These RVUs become payment rates when multiplied by a conversion factor. Geographic adjusters (geographic practice cost indexes) are also applied to the total RVUs to account for variation in costs by geographic area. Payment rates are calculated to include an overall payment update specified by statute.

With that bit of background in mind, we will now turn to the latest proposals by CMS for provider reimbursement rates, which are based on the above-referenced conversion factor calculations.

Reduced Payment Rates

We published a Special Alert last week that directly addressed the national conversion factors for anesthesia and non-anesthesia services that CMS is proposing for 2024. While we will not recapitulate here the full contents of that alert, we will restate the most salient data for those who may have missed it. The 2024 proposed conversion factors are as follows:

• The proposed 2024 RBRVS (non-anesthesia) conversion factor is listed as $32.74, which represents a decrease of $1.14 (or 3.36 percent) from the current 2023 conversion factor of $33.88. This reflects a national average. The exact conversion factor in your area may vary.
• The 2024 anesthesia conversion factor is proposed as $20.43, down 3.26 percent from the current anesthesia conversion factor of $21.12. Again, this reflects a national average. The actual conversion factor may be a bit different in your geographic region.

The data in the second bullet above has a direct impact on anesthesia service reimbursement in Medicare cases. However, anesthesiologists and anesthetists should keep in mind that the data in the first bullet above will also impact their revenue stream since flat fee services, such as postoperative pain blocks, invasive lines and imaging (USG, TEE), are tied to the RBRVS conversion factor, which is also to be reduced per this proposed rule.

It comes as a surprise to no one that the American Society of Anesthesiologists (ASA) roundly denounced the move by CMS in this latest proposed rule. The ASA released a statement that reads, in part:

ASA opposes these additional Medicare payment cuts included in the CY 2024 PFS proposed rule. The proposed rule underscores how the Medicare payment system is broken, especially during a time when anesthesia groups are faced with continued inflation pressures. ASA has already launched an initiative to engage legislative stakeholders and regulatory agencies to minimize and reverse these cuts that negatively impact anesthesiologists.

Provider Enrollment Changes

The rule contains several proposals that would make changes to the Medicare and Medicaid provider enrollment regulations. These include, but are not limited to, the following:

• Creation of a new Medicare provider enrollment status labeled a “stay of enrollment,” which CMS believes will ease the burden on providers and suppliers while strengthening Medicare program integrity.
• Requiring all Medicare provider types to report additions, deletions, or changes in their practice locations within 30 days.
• Establishing several new and revised Medicare denial and revocation authorities.
• Clarifying the length of time for which a Medicaid provider will remain in the Medicaid termination database.  

The keys to note here are that (a) some of these proposals are not just applicable to Medicare, but also to Medicaid, and (b) you will only have 30 days to report changes with respect to practice location(s).

Beyond the above, there is little else in the proposed rule that we have gleaned thus far that has a significant impact on the practice of anesthesia. We will, of course, update you as more information comes to light. We will also be providing a summary on the rule’s proposed provisions relating to the Quality Payment Program (e.g., MIPS) and chronic pain management in upcoming alerts.

With best wishes, 

Rita Astani
President—Anesthesia