Addressing cuts to 2021 anesthesia and RBRVS conversion factors

From the ASA

By now you are aware that the proposed rule for the CY 2021 Medicare Physician Fee Schedule predicts drastic cuts to both the anesthesia conversion factor and the Resource-based Relative Value System (RBRVS) conversion factor. These cuts impact anesthesiologists and other medical specialists.

	2020 Medicare Conversion Factor	Estimated 2021 Medicare Conversion Factor
Anesthesia	$22.2016	$19.9631
RBRVS	$36.0896	$32.2605

Source: CMS-1734-P, Table 88 and Table 89

Why are these cuts happening?

The Medicare program has its roots in the Social Security Act. Within that Act is a provision that if changes in the Relative Value Units (RVUs) assigned to services within the fee schedule cause expenditures for the year to change by more than $20 million, then CMS must apply adjustments to the anesthesia and RBRVS conversion factors to bring expenditures for the year back into that range (per Section 1848 (c) (2) (B) (ii) (II) of the Act). We refer to this as budget neutrality. In effect, the Medicare payment pie remains largely the same size. When Medicare decided to increase payments for primary care services, dollars from others were taken away. CMS is implementing increased values for Evaluation and Management (E/M ) services performed in the office/outpatient setting. These changes were finalized last year, but implementation was delayed until 2021. These are high-volume codes representing a large portion of Medicare spending.

AMA estimates that the changes to these codes, along with a new code for prolonged services and a new code to be reported for especially complex patients, will result in additional Medicare spending of approximately $8.9 billion. These changes, along with other proposed values and policies, will result in $10.2 billion in additional spending, per AMA. To bring the change in total expenditures back into the $20 million range requires a budget neutrality adjustment of over 10% to the anesthesia and RBRVS conversion factors. Specialties that report a high number of these codes will still gain under the CY 2021 fee schedule, but those such as anesthesia, surgery, and radiology will sustain significant negative impact. According to estimates in the proposed rule, anesthesia will see a negative 8% impact while interventional pain management will see a positive 7% impact. The forecasted impact for nurse anesthetists is negative 11%. The impact on general surgery is a negative 7%. The range of impact is broad – from radiology and nurse anesthetists at a negative 11% to endocrinology at a positive 17%.

What can be done about this?

ASA and impacted organizations had been working with CMS in hopes that the dramatic payment cuts would be mitigated in the proposed rule. That did not happen, so Congressional action is required to override the budget neutrality requirements. ASA has already been working with other negatively impacted specialties to convince Congress to do that. Now that the rule has been published and the decreases that will be so damaging to so many specialties – and by extension the negative impact on Medicare beneficiaries requiring care from these specialties – have become more evident and tangible, we may see more attention to this matter.

We will continue our efforts and ask our members to join us when we activate our Grassroots Network to facilitate our members’ communications with their representatives in the House and Senate.

Clearly, these are unprecedented times. The E/M updates that result in such a harmful budget neutrality adjustment were considered before the COVID pandemic began. CMS, HHS, the White House, and Congress have responded to the pandemic by waiving other statutory requirements, and we will work to convince them that such action is appropriate and necessary in this matter.