Anesthesia Coding Alert

Did Congress’ last-minute intervention to stave off payment cuts come up short?

In the closing days of December, Congress passed a massive spending bill that made multiple revisions to previous federal health provisions. People who wanted the feds to offer a reprieve from the crushing 4.5 percent cut to the 2023 conversion factor (CF) got their wish.

But, in a classic case of be careful what you wish for, Congress opted for the middle ground. The $1.7 trillion omnibus spending package only included moderate changes to the CF cuts; however, it did offer relief in other areas. Keep reading for the details.

Context: On Dec. 29, 2022, President Biden signed the Consolidated Appropriations Act (CAA), 2023, into law, offsetting impending 2023 Medicare payment cuts. Among the top Medicare-related updates were adjustments to the 2023 CFs, changes to the PAYGO sequester, and extensions for the COVID-inspired telehealth flexibilities and waivers.

Focus on These 4 Takeaways

When the Centers for Medicare & Medicaid Services (CMS) released the CY 2023 Medicare Physician Fee Schedule (MPFS) final rule in November, it landed with a thud and was met with industry ire. The American Society of Anesthesiologists (ASA) joined in an unprecedented joint lobbying campaign with the nation’s leading organizations to urge Congress to get involved after CMS finalized cutting the MPFS CF by $1.53 from $34.61 to $33.08 and slashing the anesthesia conversion factor by more than 4 percent.

Legislators heard the outcry, but instead of completely circumventing the 4.5 percent payment crunch, they decided on a partial adjustment that spans a couple of years. Here’s a breakdown of the four CAA 2023 actions you should add to your Medicare reimbursement checklist:

1. Find out how the updated anesthesia CF softens the blow. While providers were expecting the anesthesia CF and the MPFS CF to be lower in 2023 than in 2022, the final rule brought even bigger CF reductions than anticipated. Back in November, the 2023 MPFS final rule declared the anesthesia CF would be $20.6097, representing a decrease of 4.42 percent from the 2022 anesthesia CF of $21.5623. However, the updated anesthesia CF for 2023 is now set at $21.1249, reflecting only a 2.03 percent cut from the 2022 anesthesia CF.

While this last-minute intervention by Congress saved providers from deeper cuts that had been previously announced, it did not eliminate Medicare pay cuts altogether, much to their chagrin. “We are extremely disappointed with this outcome,” ASA President Michael W. Champeau, MD, FASA, said in a release upon the passage of the omnibus bill. “The entire Medicare payment system that is supposed to ensure appropriate payments for the essential services provided by our members is fundamentally broken — it just doesn’t work,” he added.

The ASA press release turned even more dour, if not dire, with the following characterization of the current state of the anesthesia specialty, “The combination of these Medicare cuts and the badly flawed implementation of the No Surprises Act is creating a perfect storm threatening anesthesiologists’ practices across the country. ASA is exploring legal, regulatory, and legislative options for 2023 to address this threat.”

2. Understand how the MPFS CF change will work. Instead of a 4.5 percent reduction in the Resource-Based Relative Value Scale (RBRVS) CF next year, you can expect a two-pronged approach spanning two payment cycles. “The bill would offset the planned cuts by more than 2 percent, providing a 2.5 percent positive adjustment to the CF for calendar year (CY) 2023, and a 1.25 percent positive adjustment to the CF for CY 2024,” explains McDermott+Consulting, an affiliate of law firm McDermott Will & Emery, in a bill summary.

The American Medical Association (AMA) feels Congress should have gone further to help providers. “The AMA is extremely disappointed and dismayed that Congress failed to prevent Medicare cuts next year, threatening the financial viability of physician practices and endangering access to care for Medicare beneficiaries,” laments AMA President Jack Resneck Jr., MD, in a release. “This 2 percent cut following two decades of flat payment rates will have consequences on health care access for older Americans. High inflation compounds the threat to practice viability because physicians are the only Medicare providers without annual inflation-based updates,” he adds.

3. Mark your calendar, as PAYGO cuts get pushed to a later date. The bill offers some relief on the much-maligned PAYGO Medicare sequester by preventing the cuts in 2023 and 2024.

“The Statutory Pay-As-You-Go Act of 2010 (PAYGO) requires that automatic payment cuts of 4 percent be put into place if a statutory action is projected to create a net increase in the deficit over either five or 10 years,” McDermott explains. In fact, “the PAYGO sequester has never actually been implemented despite being triggered on multiple occasions,” it notes.

Last December, Congress postponed PAYGO cuts for a year in its omnibus spending package. This year, at least that relief will last two years.