July 6, 2009

The Centers for Medicare and Medicaid Services (CMS) published the “proposed rule” for the 2010 Physician Fee Schedule on Wednesday July 1^st. CMS will receive written “comments” on the proposed changes through August 31, 2009 and then issue the final rule in November. This Alert will summarize the proposals of greatest interest to anesthesiologists and pain medicine specialists. Much of what follows will be of interest to nurse anesthesia practices as well.

1. Payment Rates Effective January 1, 2010

As expected, the proposed rule would cut Medicare spending on physician services by 21.5 percent starting in January. CMS has no leeway on this figure, which is driven by the Sustainable Growth Rate (SGR) formula. The general conversion factor, which applies to evaluation and management (E/M) services and pain medicine procedures, is slated to drop from $36.07 to $28.32. The national average anesthesia conversion factor would drop from $20.92 to $16.42. Eliminating or mitigating the SGR decrease is still up to Congress, and it appears that more and more health policymakers consider the SGR and the 21.5 percent cut untenable. Individual lobbying remains imperative!

CMS also warns that further annual decreases in the five to six percent range will be inevitable without legislation fixing the SGR. To reduce the blow, CMS is proposing to take physician-administered drugs out of the “physician services” overall category on which the annual payment update is based. The American Medical Association, among others, has long advocated this change. The cost of prescription drugs has increased far more rapidly than the cost of procedures (other than imaging). Removing physician-administered drugs from the formula will not affect payment in 2010, but CMS anticipates that the change would reduce the number of years after 2010 in which the SGR would continue to mandate negative updates. It would also remove $87.5 billion, over 10 years, from the estimated $285 billion total cost of making permanent reforms to the way Medicare pays physicians and thus make healthcare reform a little cheaper.

2. Anesthesiology Teaching Rule – “Yes, But…”

On January 1, 2010, teaching anesthesiologists who are involved with two resident cases concurrently will receive full payment for both cases. The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) requires payment at the regular rate for the anesthesiologist’s services in either a single resident case or two concurrent resident cases – but it does not specifically address the scenario where a resident case is concurrent with a case in which the anesthesiologist is medically directing a CRNA.

In the proposed rule, CMS has indicated that in the mixed concurrent case scenario it will pay at the unreduced rate for the teaching case and at the medically directed rate for the CRNA case. In the latter case, the anesthesiologist and the CRNA will each be able to bill 50 percent, assuming that all the medical direction requirements are met.

A question that arises periodically is whether the teaching anesthesiologist may be paid 100 percent for a resident case if he or she is involved in more than one additional case. Taking its lead from the Accreditation Council on Graduate Medical Education (ACGME), which limits the attending to two resident cases, CMS has answered that question in the negative. The proposed text of the new regulation (42 C.F.R. §414.46 as amended) clarifies that full payment for the resident case requires that “The single anesthesia resident case is the only case or concurrent to one other anesthesia case that is being medically directed by the physician.”

CMS has also taken a narrow position on the issue of handoffs between teaching physicians. It is common in group practices for anesthesiologists to relieve or succeed each other in performing a single case. Claiming “It is our understanding that teaching surgeons do not hand off to another teaching surgeon during a key or critical portion of the surgical resident case,” CMS proposes to require that the same individual teaching anesthesiologist be present during all of the key or critical portions of the case. Applying another part of its regulations for teaching surgeons, however, CMS will allow handoffs to “another teaching anesthesiologist with whom the teaching anesthesiologist has an arrangement [and who] could be immediately available to furnish services during a noncritical or non-key portion of the procedure.”

CMS admits that it has no data supporting its suspicions that handoffs between teaching anesthesiologists may impair quality, and in the narrative portion of the proposed rule it explicitly seeks anesthesiologists’ views:

We are also soliciting specific comments on how the continuity of care and the quality of anesthesia care are preserved during handoffs. We are interested in whether there is an accepted maximum number of handoffs and whether there are any industry studies that have examined this issue. We would like to hear from anesthesia practices that do not use handoffs and what procedures they have implemented to achieve this result. Finally, we would like to know what factors or variables are contributing to anesthesia handoffs and what short term adjustments can be made to affect these factors.

If ASA members have any answers for CMS, we are sure that ASA’s Government Affairs Office would be happy to receive them directly. ABC clients are also welcome to send their comments to Karin Bierstein, JD, MPH who will forward them to the appropriate individuals at ASA.

3. CRNAs Teaching Student Nurse Anesthetists

Teaching CRNAs stand to benefit significantly from the MIPPA teaching anesthesiologist rules under CMS' proposal. A CRNA supervising student nurses in two concurrent cases will, similar to the teaching anesthesiologist, receive the unreduced fee schedule amount for each case, as long as the CRNA is not being medically directed by an anesthesiologist and otherwise meets the payment conditions. Until and unless the proposed rule goes into effect, such CRNAs may continue to bill the full base units for each SRNA teaching case, but only the actual time spent in each. The face-to-face time limitation will disappear if the final fee schedule rule incorporates the proposed change.

In cases where an anesthesiologist is medically directing a CRNA who is in turn teaching a SRNA, the anesthesiologist and the teaching CRNA will each continue to receive 50 percent of the regular payment amount.

4. Demise of the Consultation Codes

Do you report a lot of consultation codes (CPT™ codes 99241-99255)? CMS is proposing to stop paying for these codes. Pain physicians and other specialists would use the standard E/M codes for their inpatient and outpatient visit services (the critical care codes are not affected). Overall, the shift from the consultation codes to the E/M codes is intended to be budget neutral, while boosting primary care’s share of the pie.

Using Detroit, Michigan in our example, the respective 2009 participating rates for a level 4 visit service in the physician’s office should be:

The elimination of the difference between the consultation and E/M amounts would be tempered to some extent by increases in the work values for the E/M and adjustments to the values for practice expenses and professional liability insurance. (Some of the practice expense changes will have a positive effect on anesthesiology payment rates as well as on E/M services.)

It is harder to gauge the impact of the elimination of the hospital consultation codes because the proposed rule does not indicate clearly which codes specialists should use instead. The initial hospital care codes can only be reported by the admitting physician. CMS is proposing to distinguish between the admitting physician and others who may be consulted through a modifier identifying the admitter. Whether anesthesiologists who currently use the inpatient consultation codes to report services provided in conjunction with acute pain medicine services will be using “unmodified” initial or subsequent hospital care codes instead remains to be seen.

We will be working with clients to make any necessary operational and reporting changes when the proposal is finalized.

Incidentally, some radiology and cardiology services would see substantial reductions above and beyond the SGR cut and the elimination of the consultation codes. According to the July 2 issue of the Wall Street Journal, “Payments to cardiologists would be trimmed by 11% overall, but certain procedures they perform would see steeper reductions. Alfred Bove, president of the American College of Cardiology, figured that cardiologists would receive 42% less for an echocardiogram and 24% less for a cardiac catheterization. . . .Radiologists would see an estimated cut of 20% for imaging services using expensive equipment such as MRI and CT scans.”

5. Physician Quality Reporting Initiative (PQRI)

CMS is at last proposing to add the Perioperative Temperature Management measure, bringing to a total of three the measures intended for use by anesthesiologists.

Another significant proposed change to the PQRI program would enable group practices to qualify for the 2010 bonus (2 percent, as in 2009) based on a determination at the group practice level, not just the individual practitioner level, that the group has satisfactorily reported data on the applicable PQRI measures.

The proposed rule includes changes to the electronic health record (EHR)-based reporting mechanism and on the e-prescribing incentive program. Future Alerts will cover these proposals.

In the meantime, we encourage ABC clients to bring questions to their account managers or to me directly – and we strongly urge all readers to continue lobbying their federal legislators to fix the SGR.

With best wishes,

Tony Mira
President and CEO