May 3, 2010

Medicare pays about 33 percent of average commercial payments for anesthesia services. This fact, well known to anesthesiologists, was one of the findings in a report published by the Government Accountability Office in 2007. The GAO study was based on a representative sample of anesthesia services performed in 41 Medicare payment localities. Other specialties, including pain medicine, collect an average of 80 percent or more of their commercial rates for Medicare patients.

The health care reform package that was enacted in late March, the Patient Payment and Affordable Health Care Act (PPACA) of 2010, contains a provision that offers the specialty a new approach to fixing the “33 percent problem.” Section 3134 authorizes the Secretary of Health and Human Services to identify and adjust, periodically, the relative values of “potentially misvalued services” under the Medicare physician fee schedule.

At the ASA Legislative Conference held in Washington D.C. on April 26-28, 2010, anesthesiologists saw a draft of a letter that a number of Members of Congress are considering signing and jointly sending to HHS Secretary Kathleen Sebelius. The draft asked the Secretary to examine the relative undervaluation of anesthesia “with the involvement of individuals with recent clinical experience, generalized expertise in the valuation process used for Part B services, and specific expertise in unique payment methodologies specifically including that employed for anesthesia services.”

Section 3134 calls upon the Secretary to adjust relative values for various reasons. Some, but far from all, of those reasons have been the grounds for changes made regularly by CMS the implementation on the Physician Fee Schedule in 1992. The new law provides:

For purposes of identifying potentially misvalued services pursuant to clause (i)(I), the Secretary shall examine (as the Secretary determines to be appropriate) codes (and families of codes as appropriate) for which there has been the fastest growth; codes (and families of codes as appropriate) that have experienced substantial changes in practice expenses; codes for new technologies or services within an appropriate period (such as 3 years) after the relative values are initially established for such codes; multiple codes that are frequently billed in conjunction with furnishing a single service; codes with low relative values, particularly those that are often billed multiple times for a single treatment; codes which have not been subject to review since the implementation of the RBRVS (the so-called ‘Harvard-valued codes’); and such other codes determined to be appropriate by the Secretary.

The types of codes thus subject to reconsideration under Section 3134 are clearly sufficiently encompassing to allow anesthesiology to show that the specialty has never caught up since work values for anesthesia codes were slashed across the board by more than 40 percent in 1992. The appropriateness of that original huge decrease, which translated to a 29 percent payment cut, can be reopened for questioning under the terms of the statute.

The more Members of Congress who sign on to the draft letter to Secretary Sebelius requesting the review, the more likely it is that her office will give the valuation of anesthesia services serious consideration. We suggest that you watch for further information on the ASA web site (and in a future Alert) on the finalization of the letter. When it is ready for more signatures, contact your Congressional representatives and urge them to sign on to the request.

ABC would like to congratulate ASA on another successful Legislative Conference. Attendance was higher than ever, no doubt reflecting the profession’s obvious interest in health system reform and its ever more urgent need for a permanent correction of the Sustainable Growth Rate (SGR) formula driving the 21.3 percent Medicare payment cut that was just postponed again, this time until June 1.

We would especially like to congratulate Norman A. Cohen, M.D., Chair, ASA Section on Professional Practice, on receiving the Bertram W. Coffer, M.D. Excellence in Government Award “For Exemplary Contributions to the Medical Specialty of Anesthesiology and its Practitioners and Their Patients.” ASA President Alexander A. Hannenberg, M.D. presented the award to Dr. Cohen in front of several hundred Conference attendees on Tuesday afternoon. On behalf of all our clients, thank you, Dr. Cohen, for your tremendous dedication to the specialty.

With best wishes,

Sincerely,

Tony Mira
President and CEO