Summary: The recent passage of the Consolidated Appropriations Act provides a modicum of consolation for providers who had been preparing for major cuts in Medicare reimbursement. While the legislation does not reverse these cuts, they have been significantly pared down to a more manageable level.
Over the last several months, the American people have become quite accustomed to fast-moving and life-altering change. Often that change has involved financial and other setbacks that have been hard to endure. How refreshing it is, then, to see a change that actually involves some positive news—especially for our anesthesia and chronic pain providers. That news is outlined in the following sections.
Anesthesia Conversion Factor
In late December, President Trump signed the massive COVID-19 relief legislation, officially known as the Consolidated Appropriations Act (CAA) of 2021, which contains nearly 5,600 pages of assorted and often unrelated provisions. One of those provisions will be welcome news for our readers. The approximate 10 percent reduction in the anesthesia conversion factor (CF) scheduled to take effect on Jan 1, 2021 has been modified. A statement published by the American Society of Anesthesiologists (ASA) provided the following take on the CAA:
The scheduled cut to the anesthesia conversion factor will be reduced to a 3% cut rather than the previously proposed 10% cut. An improvement, but still entirely inadequate for a specialty already hampered with a flawed payment rate, whose members are caring for COVID-19 patients on the frontlines of the pandemic.
According to an update released by the Centers for Medicare and Medicaid Services (CMS), the new national anesthesia CF will officially be 21.5600 for 2021 instead of the originally set anesthesia CF of 20.0547. This translates to a 2.9 percent reduction from the 2020 anesthesia CF, which is far better than the 9.7 percent reduction that was authorized in the 2021 Medicare Physician Fee Schedule (PFS) Final Rule. Your exact anesthesia CF will vary depending on your geographic location.
While a reduction is still a reduction, anesthesia providers will be gratified to know that their Medicare payments will face less of a hit this year than they had previously anticipated. As a result of the CAA CF adjustments, groups may want to revise their budgetary estimates and practice plans for the current year.
General Conversion Factor
A CMS source is reporting a modification of the scheduled non-anesthesia, i.e., “general,” CF reduction, as well. This is the conversion factor that applies to services such as invasive line placements and postoperative pain blocks. Immediately after the CAA was signed, it was unclear what the newly revised national conversion factor would be—though there was never any doubt that the ultimate outcome would mean good news for most specialties. That good news has now been confirmed with the publication of a Medicare Learning Network article, which is reporting that CMS has readjusted the general CF to 34.8931, based on the changes found in the CAA.
The revised general CF would mean an increase from the general CF of 32.41 previously set by the 2021 PFS Final Rule. However, the newly revised general CF still represents an overall reduction for 2021 when compared to the 2020 general CF of 36.09. Sources are further reporting that the latest reworking of the numbers based on the CAA will mean even greater increases in the value of certain evaluation and management (E/M) codes that had already been scheduled to score higher reimbursement in 2021.
What all this means is that, while there will still be reductions in Medicare reimbursement for anesthesia providers in 2021 as compared to 2020, the reductions are not as drastic. In addition, chronic pain practices can count on much better payments for their Medicare E/M services, which represent a significant component of most pain practices.
Surprise for 2022
In addition to the conversion factor revisions, perhaps the most significant news coming out of the CAA involves a section of the bill that has been dubbed the No Surprises Act (NSA). These provisions finally address the longstanding surprise medical bills issue from a national perspective. According to one legal analysis, the NSA is scheduled to become effective on January 1, 2022 and “and will apply to a broad set of health plans, including individual and group health plans (and self-funded employer plans traditionally governed by ERISA).”
As we’ve reported in the past, Congress had been looking to pass legislation on this topic for some time now. While we have not had a chance to pore over the full range of details, the ASA is reporting the following general provisions within the NSA:
- An explicit prohibition on health insurance companies presenting artificially low Medicare, Medicaid and public payer rates to an arbiter as part of the independent dispute resolution (IDR) system.
- Elimination of unreasonable timelines and other requirements related to patient notification and billing requirements.
- Enhanced physician access to the IDR process by adding clarity to the “90 days cooling-off period.”
The ASA went on to note:
The language in this bill are improvements to earlier proposals, which included aggressive government rate-setting, administrative burdens on small and medium sized practices, and inaccessible and insurer-friendly dispute resolution processes.
It will take time to determine the full range of provisions in this section of the CAA, including how this legislation will affect similar laws already passed by individual states. As the No Surprises Act will not become effective until next year, we will have time to review and report its details in the weeks ahead. Generally, however, we can state that this part of the CAA provides some good news for anesthesia practitioners, as the reimbursement methodology called for in the legislation is more favorable to non-participating providers than some had initially proposed.