2011 Medicare Rates for Anesthesia and Other Services Extended Through February


December 27, 2011

On Friday, December 23, President Obama signed legislation extending 2011 Medicare Fee Schedule payment rates for two months.  The final bill that passed the House of Representatives, the same day, was virtually identical to the bill approved by the Senate a week earlier, with the Democrats conceding little more than a commitment to continue negotiations on a one-year deal when Congress returns to Washington.

The legislation postpones again the impact of the Sustainable Growth Rate (SGR) update formula.  The two-month continuation of 2011 rates will cost approximately $3.6 billion.  The physician community is all too well aware that if allowed to take full effect on March 1st, the SGR will cause a 27 percent decrease in Medicare payments.  The pressure on Congress to eliminate the SGR altogether cannot let up after the holidays — no matter how hard it will be to find the $300 billion that the "doc fix" is estimated to cost over the first decade following passage.

Also of interest to anesthesia practices, the payroll tax cut will remain in effect through January and February.  This means that employees will be paying 4.2 percent rather than 6.2 percent on their salaries.  If the cut is extended until the end of the year, individuals earning $110,100 or more will save a total of $2,000 in payroll taxes.   The cost of the two-month continuation of the 4.2 percent rate will be $21 billion.

The third extension is that of emergency unemployment benefits, at a cost of $8.4 billion.  The total $33 billion cost of the legislation will be financed through an increase in the amount that the two federally-chartered mortgage agencies, Fannie Mae and Freddie Mac, will charge lenders to guarantee repayment of new loans.

We can now expect two more months of sticky negotiations and legislative brinksmanship in Washington before we find out what the Medicare payment rates will be on March 1st and beyond.

5010 "Not Otherwise Specified" Anesthesia Codes Issue Resolved

As explained in the November 28, 2011 Alert, version 5010 of the HIPAA standard for electronic claims transactions introduced a new problem by requiring additional information for CPT™ codes that include the phrase "Not Otherwise Specified" in their descriptors.  Numerous anesthesia codes contain the NOS language.

The ASA announced, on December 22nd, that it had reached an agreement with the X12 Committee responsible for the HIPAA standards and that the additional information would not be required for "NOS" codes 00100-01996.  Code 01999, "unlisted anesthesia procedure," however, will need to have further information in the SV101-7 segment.  The X12 Committee is working on the particulars.

ASA states in its update that "CMS representatives advise us that any data submitted in SV101-7 will satisfy the edit for Medicare claims until revisions have been made." The emphasis in the original serves to remind us that private payers are not bound by the CMS policy and may reject claims not containing the necessary information. ABC staff will seek to resolve problems with any carrier, Medicare or private, that denies claims based on the data submitted or not submitted in SV101-7.   There have already been some inconsistencies in the transition to the 5010 standard between carriers and we can reasonably expect more errors, given the complexity of the process.  We urge all readers who experience such errors to contact their carriers.

We hope that 2012 will see the elimination of the SGR update formula, a smooth transition to the 5010 and a clear and simple path forward through healthcare reform.  We look forward to welcoming clients to the new ZenithAnesthesia Practice Network.  We wish all our readers a successful and Happy New Year.

With Best Wishes,

Tony Mira
President and CEO