CMS 2018 Anesthesiology Rule Updates

By April 6, 2018Uncategorized

The Centers for Medicare and Medicaid Services (CMS) has released two rule updates that will heavily impact anesthesiology providers in 2018. As previously discussed, CMS is a government agency that administers governmental health programs, providing guidelines for pricing and reimbursement at the state level for Medicare Centers of Excellence and other Medicare/Medicaid-serving providers. Anesthesiology providers, including anesthesiologists and Certified Registered Nurse Anesthetists (CRNAs) are subject to such guidelines. Furthermore, CMS as an agency is trending towards providing more specific diagnosis and reimbursement codes for surgical procedures, highlighting the specific anesthesia procedures. The most recent round of Rule Updates supports the trend.

As of Jan 1, 2018, CMS has pronounced that anesthesia for endoscopies are to be affected by a new reimbursement scheme. The decision was driven by a meeting of key stakeholders, that included the Medicare Payment Advisory Commission, the American Society of Anesthesiologists (ASA), and the American Medical Association.

In sum, the rule changes will change services rendered as follows:
1. Endoscopic retrograde cholangio-pancreatography (ECRP) is now a unique code. As such, ECRPs will be reimbursed at a greater base unit as compared to prior to this ruling, at a rate of 6 units versus 5 units. For reference, one unit is roughly 8 minutes to 22 minutes of provider time.
2. Colonoscopies and screening for colonoscopies has been reduced. These procedures will now receive 3-4 units per procedure.

The American Society of Anesthesiologists is particularly active in the CMS space and has advocated heavily for appropriate and equal reimbursement of anesthesiology services. In response to the above Rule Updates, the ASA has released a public statement criticizing the undervaluation of endoscopies. The ASA, after conducting market research among its membership, is assured that these procedures should achieve at least 4 units. While the difference in one unit may seem negligible, in terms of reimbursement it can have grave implications. Sum reimbursement is dependent on the CMS-determined conversion factor; for 2018, CMS has concluded that the anesthesia conversion factor will be 22.1887 USD (a rise from 2017’s 22.0454 USD value), in comparison to an overall resource-based conversion factor of 35.9996 USD. Therefore, to conduct a simple thought exercise, one could imagine 1000 endoscopy procedures occurring per year in an endoscopy suite. At a rate of 5 units per procedure, the net annual reimbursement would equate to 1000 procedures * 5 units per procedure * 22.1887 conversion factor = 110,943.50 USD. However, at the updated CMS rate, this net annual reimbursement would change to 1000 procedures * 3 units per procedure * 22.1887 conversion factor = 66, 566.10 USD, a dramatic decrease. In combination with the fact that many physicians will continue to devote the same amount of time to the procedure, the decreased unit allocation could lead to a severe undervaluing of the physician’s time. Conversely, if the physician or physician’s office aims to achieve reimbursement parity, they must require that physicians minimize the number of minutes they spend per procedure per patient, which can lead to medical error and lapses in safety. From the perspective of the ASA, rule changes which decrease unit allocation for routine procedures is dangerous for the provider, the patient, and the healthcare system as a whole.

The anesthesia space will continue to be impacted by rapid changes in CMS governance. Anesthesiologists, CRNAs, and healthcare administrators must be kept knowledgeable of such changes to keep pace with the rapid innovation present in the American healthcare system.