November 20, 2017

The 2018 Physician Fee Schedule (PFS) published by the Centers for Medicare and Medicaid Services (CMS) in the Federal Register on November 15, 2017 has set a national conversion factor (CF) of $35.9996 for non-anesthesia services.  This includes all evaluation and management codes as well as all surgical procedures.  This represents a 0.5 percent positive adjustment, as required by the Medicare Access and CHIP Reauthorization Act (MACRA).  Although the increase is modest, this is the first year in several years that clinicians have not had to wait until March for implementation, which means you will have accurate numbers beginning on January 1, 2018.

The 2018 national anesthesia CF of $22.1887 (unadjusted for geographic practice cost differences), includes a slight positive adjustment for practice expense and malpractice updates from the 2017 anesthesia CF of $22.0454.  CMS had originally proposed decreasing the anesthesia CF to $22.0353 based on a decrease in the malpractice component, but did not implement the proposal following lobbying by the American Society of Anesthesiologists and other groups.

Payments for services under Medicare are set according to a common scale known as the Resource Based Relative Value Scale (RBRVS), which weights services according to the resources used.  Relative Value Units (RVUs) are used to assess the value of the services.  An RVU represents a combination of three components:  1) physician work; 2) practice expense; and 3) malpractice expense.  The RVU work, practice expense and malpractice factors are multiplied by a geographic practice cost index (GPCI) that varies according to the billing clinician’s location.  This value is multiplied by the CF to determine the final dollar payment.  A GPCI has been established for every Medicare payment locality for each of the three components of a procedure’s RVU.  The sum of the three geographically adjusted total RVUs is multiplied by a CF that determines the Medicare payment in dollars.

Following is a table of the locality-adjusted anesthesia conversion factors for 2018.

With best wishes,

Tony Mira
President and CEO