Anesthesia Business Consultants

The Anesthesia Insider Blog

Ipad menu


Tony Mira, President and CEO

This is some blog description about this site

Anesthesia and the Final Medicare Fee Schedule Rule for 2014

The Centers for Medicare and Medicaid Services (CMS) released the 1369-page final regulations containing the changes to the Physician Fee Schedule for 2014 (the “Final Rule”) on the Wednesday before Thanksgiving.  Updates and provisions of interest to anesthesiologists include the 2014 conversion factor and changes to the Physician Quality Reporting System (PQRS) and Value-Based Payment Modifier requirements.

Conversion Factor

The national average anesthesia conversion factor (CF) is set at $17.2283 for 2014, down from $21.9243 this year.  This includes a one-percent increase in the Medicare Economic Index for anesthesia services; many other specialties saw no increase or a negative impact.

The general Medicare conversion factor, which applies to pain medicine, critical care, evaluation and management and other “flat fee” services, will decrease by 20.1 percent, to $27.2006.  In March 2013, CMS had projected a CF decrease of 24.4 percent for 2014.

The announcement of a decrease should not raise an alarm:  we are all accustomed to the annual two-step dance in which CMS applies the statutory Sustainable Growth Rate (SGR) formula, resulting in an arithmetic reduction, and then Congress overrides the cut in last-minute legislation.

In its explanation of the calculation of the new CF, CMS made clear its dislike for the reduction that the SGR compels:

By law, we are required to make these reductions in accordance with section 1848(d) and (f) of the Act, and these reductions can only be averted by an Act of Congress.  While Congress has provided temporary relief from these reductions every year since 2003, a long-term solution is critical.  We will continue to work with Congress to fix this untenable situation so doctors and beneficiaries no longer have to worry about the stability and adequacy of payments from Medicare under the Physician Fee Schedule.

The Senate Finance Committee has scheduled a December 12 "open executive session" on the draft bipartisan proposal that would repeal the SGR and replace it with a mix of payment freezes and alternative payment models that reward physicians with bonuses for value and quality rather than volume. 


Next year will be the last in which physicians and other “eligible professionals” (EPs) will be able to earn an incentive payment, of 0.5 percent, for successful participation in PQRS.

For 2014, there is both a positive “incentive” and a negative payment “adjustment.”  EPs must participate in PQRS in order to avoid a penalty that would be applied to adjust payments in 2016.  This potential penalty will increase from 1.5 percent (for failure to report successfully in 2013) to a 2-percent  reduction beginning in 2016, based on 2014 reporting.

Qualifying for the 2016 incentive by successfully reporting PQRS measures in 2014 will automatically prevent the physician or other EP from experiencing any adjustment in 2016.  Failure to report successfully will result not only in the loss of the potential incentive payment, but, additionally, in a 2-percent reduction in Medicare remittances throughout 2016.

To qualify for the incentive and to avoid the penalty, EPs must select a reporting mechanism.  Of those that are theoretically available—claims-based, through a qualified clinical data registry, through a certified EHR and EHR data submission vendor, administrative claims or Group Practice Reporting Option web interface—the claims-based method of reporting is the only one used by the vast majority of anesthesiologists.  The National Anesthesia Clinical Outcomes Registry (NACOR) maintained by the Anesthesia Quality Institute (AQI) qualified as a PQRS-approved registry for reporting in 2013, but it is still in the process of qualifying as a “clinical data registry” for future use.  Once it does qualify, all AQI members will be able to satisfy their PQRS reporting requirements through the NACOR.

With the addition of 57 new measures in the Final Rule, there are now 287 PQRS measures.  In 2014, physicians and other EPs will need to report more than the minimum of three measures required through this year, i.e., to:

Report at least 9 measures covering at least 3 NQS domains, OR, if less than 9 measures covering at least 3 NQS [National Quality Strategy] domains apply to the eligible professional, report 1—8 measures covering 1—3 NQS domains, AND report each measure for at least 50 percent of the Medicare Part B FFS patients seen during the reporting period to which the measure applies.  Measures with a 0 percent performance rate would not be counted.

* For an eligible professional who reports fewer than 9 measures covering 3 NQS domains via the claims-based reporting mechanism, the eligible professional will be subject to the MAV [Measure Applicability Validation] process, which would allow us to determine whether an eligible professional should have reported quality data codes for additional measures and/or covering additional NQS domains.

What this means is that in order to earn the 0.5 percent incentive payment, an EP must now report nine measures representing at least three NQS domains: Patient Safety; Person and Caregiver-Centered Experience and Outcomes; Communication and Care Coordination; Effective Clinical Care; Community/Population Health; Efficiency and Cost Reduction—if nine or more measures and three or more NQS domains apply to that EP’s practice.  As we know, however, there are only three anesthesia-specific PQRS measures:

#30 – timely administration of prophylactic parenteral antibiotics
#76 – prevention of catheter-related bloodstream infections
#193 – perioperative temperature management

and they all come from a single NQS domain, Patient Safety.  For pain physicians, there are no specialty-specific measures, but there are several that can be reported with evaluation and management services, including:

#128 – preventive care and screening – BMI
#130 – documentation of current medications in the medical record
#131 – pain assessment and follow up
#226 – preventive care and screening – tobacco use

We are currently reviewing the complete set of 287 measures to identify all those that could be reported by typical pain practices.  We will bring our readers up to date in a forthcoming Alert.

If fewer than nine measures from three different domains are reported, CMS will analyze the EP’s totality of claims to see whether other measures in fact applied in 2014 and should have been reported pursuant to the MAV process. 

If there are no such additional measures, the one, two, or up to eight measures that the EP reported will be sufficient as long as they were reported on at least 50 percent of all eligible claims.

Two changes implemented in 2013 are so important, going forward into 2014 and beyond, that we are repeating them here:  (1) the proportion of eligible claims for which the EP must report a PQRS measure decreased from 80 percent to 50 percent, and (2) measures with a “0 percent performance rate” are not to be counted.  The second item means that it is not acceptable for an EP to report all instances of antibiotic prophylaxis, or any other measure, with modifier 8P.  Modifier 8P is used to indicate that a PQRS measure was not performed and that the reason for non-performance is not specified.  CMS has previously indicated its aversion to overuse of the modifier; accordingly, 8P should not be reported by default.

Value-Based Payment Modifier (VBM) 

As noted in our Alert dated April 1, 2013, “The 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.”  Implementation of the VBM is based on participation in the PQRS.  Physicians practicing high-quality, low-cost medicine will earn a positive VBM, while physicians deemed low quality and high cost will receive a negative one.  A physician's VBM will partly reflect quality-of-care data submitted through PQRS. By 2017, the phase-in will be complete, and all physicians will be subject to the VBM.

For 2016, CMS will apply the VPM to groups of physicians with 10 or more eligible professionals based on performance in 2014.  This number is decreasing; for 2013, only groups with 100 or more EPs are subject to the VBM.

The amount of payment at risk will increase from 1.0 percent to 2.0 percent for performance year 2014.  This means that groups of 10 or more anesthesiologists and/or nurse anesthetists who do not participate in PQRS reporting in 2014 could see a VBM reduction on top of the 2.0 percent penalty for failure to successfully report PQRS measures.

To avoid that potential penalty, anesthesia groups will need to select one of the following participation options:

  1. Self-nominate to participate in PQRS as a group, through the Group Participation Reporting Option (GPRO) web interface, or
  2. Report through an electronic health record, or
  3. Report through a CMS Qualified Registry such as NACOR, or
  4. Make sure that at least 50% of the individual EPs report successfully and avoid the 2016 PQRS payment adjustment.

For groups that do report successfully, CMS will perform a “quality tiering calculation,” as shown in the chart below from CMS’ December 3, 2013 National Provider Call on The Physician Value-Based Payment Modifier under the 2014 Medicare Physician Fee Schedule.  Only groups with 100 or more EPs are at risk for a negative adjustment.  Upward performance-based adjustments only will be applied to groups of physicians with between 10 and 99 EPs.

We will provide much more detailed information on the VBM program during the year to come, after CMS publishes regulations.  For now, readers might note simply that the GPRO nomination period will open in Spring 2013 and remain open through September for those groups who are interested in that option.  Most anesthesia groups will simply need to take care that at least 50 percent of their EPs report PQRS measures successfully.  We echo CMS’ statement in the fact sheet Changes for Calendar Year 2014 Physician Quality Programs and the Value-Based Payment Modifier:  “We encourage all physicians in groups of less than 10 EPs and solo practitioners to use 2014 as a “practice” year with the PQRS quality reporting mechanism of their choice so that they are ready for the value-based payment modifier in 2015.”

What is the Value of A Chronic Pain Practice to an...
Value for Hospitals, Anesthesiology Practices and ...


No comments made yet. Be the first to submit a comment