With remarkable timing, news of a lawsuit brought by the parents of a teenager left in a permanent vegetative state after a routine endoscopy coincides with the announcement that the Food and Drug Administration (FDA) has granted Premarket Approval for the SEDASYS® system, a computer-assisted personalized sedation system. The patient was not anesthetized using a SEDASYS machine or any other form of robo-anesthesia, of course.  According to the May 1st New York Daily News article, “The suit to be filed in Westchester Supreme Court alleges that doctors improperly administered anesthesia in failing to consider the patient’s height and weight; improperly monitored her vital signs; excessively inflated her abdomen, causing cardiac arrest, and removed a breathing tube prematurely.”  The point of the juxtaposition of the two news items is to highlight the inherent risks of routine anesthesia even when administered and monitored by experienced anesthesiologists. The SEDASYS manufacturer, Ethicon Endo-Surgery, Inc., a...

Anesthesia practices that accept Visa and MasterCard payments are among the “merchants” that may be able to collect a portion of the fees paid to the card issuers under the proposed settlement in the Payment Card Interchange Fee and Merchant Discount Antitrust Litigation pending in federal District Court in New York.  The class action lawsuit alleges that merchants paid excessive fees for accepting Visa and MasterCard because of an alleged antitrust conspiracy among the Defendant.  According to the complaint, Visa, MasterCard and more than a dozen of the nation's largest credit card issuers conspired to restrain competition by illegally charging higher interchange fees for credit card transactions.  The court granted preliminary approval to the proposed settlement agreement in November, 2012.  On April 11, 2013, the plaintiffs filed for final court approval of the settlement and for attorneys’ fees and expenses.  The court has scheduled a hearing for September 12, 2013 to...

Astonishingly, after decades of discussion, there is still a lot of uncertainty as to what the anesthesia medical direction rules mean by the requirement that the medically-directing anesthesiologist be “immediately available.”There has never been a numerical time or distance limit for “immediately available,” although there was a substantial debate about potential parameters with the American Society of Anesthesiologists in the 1990s. Thus, in investigating a False Claims Act whistleblower case that began in 2008, auditors from the Department of Health and Human Services Office of the Inspector General (OIG), acting with the Department of Justice, performed an on-site visit to the surgical facilities at the University of California-Irvine to see for themselves how long it would take a supervising anesthesiologist to travel between ORs, including ORs located in different buildings. An auditor from the San Diego OIG field office described the visit to UCI in a May 8, 2013 OIG podcast:Well, when...

The American Hospital Association (AHA) has just released a report that describes the strategies that will help its nearly 5,000 member hospitals succeed in the value-based healthcare environment.  This report, Metrics for the Second Curve of Health Care, will be of interest to all anesthesiologists who want to understand and meet their hospitals’ needs—and that should include all anesthesiologists who work in a hospital.  Whether you have held the anesthesia franchise at your institution for decades with no competition, or whether you are seeking ways to improve or even launch a relationship with a hospital, you will benefit from knowing administration’s goals.The title of the new AHA report comes from futurist Ian Morrison’s “first curve,” the current volume-based healthcare payment environment, and “second curve,” the coming value-based market.  It is a sequel to the AHA’s 2011 synthesis of interviews with hospital and health system leaders entitled Hospitals and Care Systems of the Future. ...

The Centers for Medicare and Medicaid Services (CMS) and the Department of Health and Human Services Office of the Inspector General (OIG) last week published parallel proposed rules that would remove certain obstacles to hospitals’ paying for the electronic health record (EHR) technologies used by anesthesiologists, pain specialists and other physicians. When a hospital or other entity that may be seeking patient referrals, such as a medical device manufacturer, gives something of value to a physician, the gift potentially may violate both the anti-kickback statute and the physician self-referral statute. The anti-kickback statute (Section 1128B(b) of the Social Security Act) provides criminal penalties for individuals or parties that knowingly and willfully offer, pay, solicit, or receive remuneration in order to induce or reward the referral of business reimbursable under Medicare or any other federal health care program.   In 1987 Congress passed legislation requiring the development and promulgation of regulations, the so-called...

One of the Medicare Administrative Contractors (MACs), Noridian Administrative Services LLC, has published a proposed policy that would bar payment for peripheral nerve blocks placed pre-operatively for the management of post-operative pain.  According to the draft policy, entitled Nerve Blockade: Somatic, Selective Nerve Root, and Epidural,Reimbursement for the control or management of pain in the immediate postoperative period is bundled into the payment for the procedure, surgical or anesthetic—regardless of the method by which the care provider, including the anesthesiologist, decides to manage pain. Following discharge from the post-anesthesia care unit (PACU), the medically reasonable and necessary placement of regional or peripheral pain blocks or initiation of other new pain interventions or “top-up” dosing may be reimbursable. Providers should not expect separate payment for the establishment of epidural or other pain blocks unless the block is placed following discharge from PACU due to documented inadequate pain control.The last sentence of the...

ABC is receiving some very good questions from anesthesia and pain practices regarding more details on how the sequestration 2% Medicare payment cut will impact their reimbursement.  We are continuing to monitor various Medicare carriers’ websites, including Palmetto, CGS, Novitas, First Coast Service Options and NHIC. These Q&As can help you track and ensure proper payments.Question:Does the 2% payment reduction under sequestration apply to the payment rates reflected in Medicare fee-for-service fee schedules or does it only apply to the final payment amounts?Answer:Payment adjustments required under sequestration are applied to all claims after determining the Medicare payment including application of the current fee schedule, coinsurance, any applicable deductible, and any applicable Medicare Secondary Payment adjustments. All fee schedules, Pricers, etc., are unchanged by sequestration; it’s only the final payment amount that is reduced. Question:How is the 2% payment reduction under sequestration identified on the electronic remittance advice (ERA) and the standard paper...

In last week’s Alert, we summarized the requirements for participating in Medicare’s Physician Quality Reporting System (PQRS) in 2013.  One of the major changes to the PQRS program—which we deferred until this week—is the implementation of the Value-Based Payment Modifier (VBM) for groups of 100 or more eligible professionals (EPs), consisting of physicians and CRNAs and others described in detail below.Groups of 100 or more EPs — Watch out for the Value-Based Payment ModifierThe Patient Protection and Affordable Care Act (ACA) requires that Medicare implement a Value-Based Payment Modifier (VBM) that would apply to Medicare fee-for-service payments beginning in 2015. The VBM is intended to pay physicians differentially based on the quality and cost of their care.While CMS must adhere to certain statutory requirements, such as using the modifier to promote shared responsibility and systems-based care, the ACA gives CMS considerable flexibility in terms of implementing the VBM. The 2013 Medicare...

Participating in Medicare’s Physician Quality Reporting System (PQRS) has taken on a new flavor this year.  While until now participating has meant a potential annual bonus of several thousand dollars, not reporting in 2013 will entail a penalty in 2015.  Losing out on a bonus is less galling than forfeiting a percentage of each remittance.  No anesthesiologist, CRNA or pain physician is doomed to lose money for failing to report the applicable PQRS measure(s).  This Alert will provide a reminder of the steps you need to take to earn the bonus and to avoid future penalties. It is a testament to the undue complexity of the program that we are now in its seventh year, and yet uncertainty lingers.  As a reminder, the incentive payments and “payment adjustments” for each year are as follows: YearPayment/AdjustmentMadeReporting YearPayment or (Adjustment) 200820071.5%2009 20081.5% 201020092.0% 201120102.0% 201220111.0% 201320120.5% 201420130.5% 201520140.5% 20152013(1.5%) 2016 onward2014 onward(2.0%)  ...

Failure of the Joint Select Committee on Deficit Reduction to reach agreement on $1.2 trillion in cuts to federal spending, has triggered automatic Federal budget cuts known as sequestration. The cuts were originally scheduled to go into effect January 2, 2013. Congress delayed implementation until March and President Obama signed the order late Friday evening, March 1.The 2% cut is evenly split between domestic and defense programs, with half affecting defense discretionary spending (weapons purchases, base operations, construction work, etc.) and the rest affecting both mandatory and discretionary domestic spending. Only a few mandatory programs, like the unemployment trust fund and, most notably, Medicare (more specifically—provider and hospital payments) are affected.Last Friday, the White House Budget Office provided an 83-page list identifying for each of 1,200 accounts what amount needed to be chopped. Medicare beneficiaries will not be subject to any reductions in their benefits. Rather, the expected $123 billion cut...

Several recent publications have described strategies for hospitals and ambulatory surgical centers to improve their operational health—their profitability, to be blunt.  Anesthesiologists are well aware of the role that they can play in O.R. management and of the need to assume O.R. leadership responsibilities in order to remain competitive.  There are some valuable ideas to be gleaned from articles and presentations directed to O.R. managers.  Anesthesiologists can take charge of most, if not all, of the processes described below. Many ways to improve O.R. efficiency are already familiar.  The value of on-time starts, fast turnover times and block scheduling, to name but a few such ways, is a given.   Jeffry Peters’s February 28, 2013 webinar hosted by Becker’s Healthcare and entitled Managing Surgical Services Lines under Accountable Care and Value-Based Purchasing identified some additional operational changes that would help hospitals obtain a “sustainable competitive advantage.”  Peters is the president and CEO...

Over the New Year holiday, Congress finally passed legislation to stop the U.S. economy from going over the fiscal cliff. The new law included a temporary reprieve from the 26.5 percent cut provided for by the Medicare Sustainable Growth Rate (SGR) formula. There will be no SGR reduction throughout 2013—a development that lets us all breathe a deep sigh of relief, even though the formula itself, and its future depredations, are still in the law. Medicare payments to physicians and hospitals are not inviolate for the coming year, it must be noted: automatic two-percent reductions will hit Medicare as part of the “sequestration” process just two months from now if Congress and the White House do not reach another deal. For many anesthesia practices, the runup to negotiations with hospitals and payers is a cliffhanger—indeed, even contemplating future negotiations often feels precarious. Last year, one of the national anesthesia practice management...

In meetings and conferences where the presenter asks anesthesiologists and pain physicians whether they are participating in—or negotiating with—an Accountable Care Organization (ACO), very few, if any, of the doctors raise their hands.  Everyone is aware of the concept of ACOs, but almost no one has any experience with them yet.  Nevertheless, there are significant ACO developments across the country.Tens of millions of patients are already receiving medical services through ACOs. A year ago—even before the United States Supreme Court’s decision upholding most of the Affordable Care Act—32 ACOs were participating in the Medicare Pioneer demonstration program  and 27 more had signed up to become Medicare ACOs.  Becker’s Hospital Review briefly described 80 Accountable Care Organizations to Know, both commercial and Medicare, in an online article dated April 16, 2012.  Many of these ACOs were formed by hospitals and health systems in partnership with health plans.  They range in size from as...

CMS’ Medicare Recovery Audit Contractor (RAC) Program has now been in effect in all 50 states for three years.  The RACs, readers will recall, are contractors who are compensated on a contingency fee basis for finding and recouping overpayments made by Medicare to physicians, hospitals and other providers.  Each of the four RACs is responsible for identifying overpayments—and underpayments—“in a geographically defined area that is roughly one-quarter of the country. In addition, [they] are responsible for highlighting to CMS common billing errors, trends, and other Medicare payment issues,” according to a report from CMS to Congress released earlier this month and entitled Recovery Auditing in the Medicare and Medicaid Programs.The RACs analyze Medicare FFS claims on a post-payment basis, using three different processes: (1) automated reviews of claims data, (2) semi-automated reviews where the RAC allows the provider to substantiate the claim with supporting documents and (3) complex reviews, where a qualified...

"Physicians’ relationships with the pharmaceutical industry should be transparent and focused on benefits to patients."  (Jeremy A. Lazarus, MD, President, American Medical Association, Statement on Final Physician Payment Sunshine Act Rule, February 1, 2013.)“You should know when your doctor has a financial relationship with the companies that manufacture or supply the medicines or medical devices you may need. Disclosure of these relationships allows patients to have more informed discussions with their doctors.” (Peter Budetti, MD, JD, CMS Deputy Administrator for Program Integrity, quoted in Rule Increases Transparency in Health Care, press release, February 1, 2013.)Have you ever received a consulting fee, a meal, a textbook, a mug or a pen set from a drug company or a device manufacturer?  If the value of the item was more than $10, it would likely be reportable to a new registry under the Physician Payment Sunshine Act and the final regulations (“Final Rule”) published by CMS on February...

Noah Rosenberg, M.D.Resident, Department of Family & Community Medicine, University of Massachusetts Memorial Medical Center, Worcester, MAFred E. Shapiro, D.O.Assistant Professor of Anesthesia, Harvard Medical School, Boston, ISOBS FounderThe Institute for Safety in Office-Based Surgery (ISOBS), an independent, non-profit 501(c)(3) organization, has developed a safety checklist for use in the office-based setting. A recent study to be published in the journal ePlastydemonstrated a more than 75% reduction in the number of surgical complications with use of the ISOBS Safety Checklist (see below for citation). While this positive effect on surgical complications validates much of the data already collected in the inpatient setting, it also clearly emphasizes the need for a tailored patient safety approach to the office-based setting. For that reason, ISOBS has developed a second checklist for use by patients to engage them in office-based surgical safety.The ISOBS Patient Checklist (ISOBS PC) contains a number of questions and concerns every patient...

The creation of Health Insurance Exchanges (HIEs) is among the most important changes to the health care system made by the Affordable Care Act (ACA).  The HIEs are marketplaces where consumers and small businesses can shop for private health insurance plans. Many anesthesia and pain medicine patients will be covered by health plans participating in HIEs beginning as soon as October 2013.  Payment rates under such plans have the potential to make or break providers.  Additionally, some group practices may choose to offer coverage through the HIEs.  A basic familiarity with HIE structure and operations is therefore in order. Who The ACA provides that effective January 1, 2014, there shall be at least one HIE in each of the fifty states.  States have the option of (1) setting up their own HIEs, (2) partnering with the federal government to run an exchange, or (3) opting out—in which case, the Department of...

Christopher Ryan, Esq. Giarmarco, Mullins & Horton, P.C., Troy, MI Neda M. Ryan, Esq. Clark Hill, PLC, Birmingham, MI Reporting post-operative pain management procedures often gives rise to questions, especially toward the beginning of the new year when the Centers for Medicare and Medicaid Services (CMS) issues its National Correct Coding Initiative (NCCI) edits. Historically, epidurals and blocks that are placed pre-operatively for the purpose of managing post-operative pain have been, and still are, separately reportable and not bundled into the anesthesia service itself. The exception to this general rule is when the epidural or block is the anesthetic itself. While CMS has not called for significant changes in 2013, anesthesia providers should, nevertheless, be aware of new post-operative pain management coding changes taking effect January 1, 2013. NCCI Edits  The NCCI edits for 2013 provide, in part, that certain post-operative pain management procedures may only be separately reportable with anesthesia...

“Much has changed in health care since HIPAA was enacted over fifteen years ago,” said HHS Secretary Kathleen Sebelius in the Department of Health and Human Services’ January 17th press release announcing the publication of the long-awaited final omnibus rule with Modifications to the HIPAA Privacy, Security, Enforcement and Breach Notification Rules under the Health Information Technology for Economic and Clinical Health Act and the Genetic Information Nondiscrimination Act. “The new rule will help protect patient privacy and safeguard patients’ health information in an ever expanding digital age.” The final omnibus rule will go into effect on March 26, 2013. Covered entities such as anesthesia and pain medicine practices and billing companies including ABC—and their business associates—must be in compliance by September 23, 2013. The final rule changes HIPAA in several important ways: It toughens the definition and consequences of failure to notify affected parties of security and privacy breaches;It strengthens...

Gastrointestinal endoscopy is one of the safest and most commonly performed adult procedures. The record of safety extends to the sedation or anesthesia for both upper and lower GI endoscopy.  Because of both the safety and the frequency of the procedure, anesthesia for GI endoscopy has been under scrutiny by health plans for a decade or more.  Lately, the number of claims denied for lack of “medical necessity” for endoscopic anesthesia services have once again been growing.  Without taking any position on the merits of anesthesia vs. moderate sedation in connection with endoscopies and especially colonoscopies, we would like to remind our audience of the principles followed by payers in evaluating the medical necessity of anesthesia for these procedures. The differences between anesthesia and moderate sedation Moderate sedation (aka “conscious sedation”) is a “drug-induced depression of consciousness during which patients respond purposefully to verbal commands, either alone or accompanied by light tactile...