news: CMS

Anesthesia Work Value Boost of 32 Percent Spares CRNAs the 10 Percent Cuts Other Specialties Face; Further Payment Fix Requires Congress to Act

By Frank J. Purcell
AANA Senior Director Federal Government Affairs
Washington, D.C.

The Medicare agency November 1 issued the 2008 physician fee schedule (PFS) final rule (CMS-1385-FC) in which the agency adopted its proposed 32 percent increase in the value of anesthesia work – a boost that effectively rescues CRNAs’ 2008 reimbursements from severe cuts that the rule imposes on almost every Medicare Part B service other than anesthesia. In comments to the Centers for Medicare & Medicaid Services (CMS) last summer, AANA and CRNAs as well as anesthesiologists had strongly advocated for the agency to increase anesthesia work values in concluding CMS’ most recent “five-year review” adjustment of relative values of all Part B services.

“This final rule boosts the value of anesthesia work as AANA had requested,” said AANA President Wanda Wilson, CRNA, PhD. “With a modest increase for anesthesia instead of the cuts faced by many other specialties, the rule provides CRNAs a much-needed reprieve from 2008 Medicare payment cuts.

“Now we turn to Congress to act by year’s end, to reverse the extreme cuts that Medicare’s flawed ‘sustainable growth rate’ (SGR) funding formula imposes on all Part B services, including CRNA services,” said President Wilson. “Unless Congress enacts a new law to reverse the SGR cuts, Medicare payments for nearly all physician and clinicians’ services will fall 10 percent starting January 1, 2008. Congress’ action is also important to anesthesia and CRNAs, as the Government Accountability Office (GAO) reported last summer that current Medicare anesthesia payments are 67 percent below private insurance.”

The provisions of the 1,484-page final rule, due to be published in the Federal Register November 27, 2007, include:

CMS accepted its summer 2007 proposal, which AANA supported, to increase the value of anesthesia work 32 percent. Medicare states about three-quarters of the value of anesthesia services is work.
The agency pegs the 2008 national mean Medicare anesthesia conversion factor (CF) at $16.33, 10c per unit or 0.6 percent above the 2007 mean national anesthesia CF of $16.23. Medicare pays for an anesthesia service according to the formula (base units + time units) times (anesthesia CF). Even with the 32 percent increase in the value of anesthesia work, Medicare has imposed a substantial list of other factors that limit the 2008 growth of anesthesia payment – factors which include the SGR formula cuts of 10 percent applied to all Part B services, the calculation of the 2008 fee schedule using 2006 not 2007 payment as a baseline, and budget neutrality adjustors that cut payments across the board when one type of payment is provided an increase.

Without CMS’ increase in the value of anesthesia work, CRNA and anesthesiologist Medicare payment under the anesthesia fee schedule would be in the same boat as the rest of physicians, who are facing 10 percent payment cuts in 2008 under this final rule.

Presuming Medicare pays about $2 billion per year in anesthesia services, then this final rule provides about $200 million more anesthesia payment in 2008 than we would have had without the increase in the value of anesthesia work. The agency computes 2008 allowed charges for nurse anesthetists at $608 million, up 12 percent from 2007. Medicare computes 2008 allowed charges for anesthesiology at $1.579 billion, up 4 percent from 2007.

The regular physician fee service (PFS) CF of $37.90 in 2007 declines to $34.06 for 2008, a reduction of $3.84 or -10.13 percent for physician services other than anesthesia. Several common CRNA services are paid under the regular PFS, such as line insertions and pain management services. Physician payments were cut according to many of the same factors affecting anesthesia services.
If Congress provides Medicare payment cut relief – that is, by reversing cuts of approximately 10 percent relating to the SGR formula for both physician and anesthesia services – the anesthesia CF for 2008 if Congress acts would climb to about $17.95/unit, about 10.6 percent over the 2007 levels.

The final rule includes additional quality measures for the agency to use in its 2008 Physician Quality Reporting Initiative (PQRI, CMS’ pay-for-performance or P4P program). However, the final rule states some quality measures developed through the AMA-Physician Consortium for Performance Improvement anesthesia workgroup process are not included in the final rule, on account of their being completed or vetted too late for the agency to accommodate. The excluded measures are the stress ulcer disease (SUD) in ventilated patients measure, and the perioperative temperature measurement for surgical patients under general anesthesia measure. The latter of these two was approved by the Ambulatory Care Quality Alliance (AQA) very recently, on October 26, 2007.

This statement reflects a preliminary AANA analysis of the CMS final rule on 2008 physician payment. The AANA Office of Federal Government Affairs in Washington, D.C. will continue reviewing the final rule for its impacts on CRNAs. Members of AANA should direct questions or comments to info@aanadc.com.

For More Information
The AANA Federal Government Affairs Hotline is published for the nurse anesthetist members of AANA each week Congress is in session by the AANA Office of Federal Government Affairs, Washington, D.C., (202) 484-8400, info@aanadc.com, Frank Purcell, Senior Director. © 2007 American Association of Nurse Anesthetists.