Anesthesia Coding Alert

Anesthesiologists and PM specialists will see the effects

Whether your group focuses on anesthesia or pain management, conversion-factor news for 2007 isn't pleasant: CMS' final rule includes substantial cuts to all physicians, effective Jan. 7, plus reduced conversion factors for both the Medicare Physician Fee Schedule Database and anesthesiologists.

The 2007 national conversion factor (CF) announced in the Dec. 1, 2006, Federal Register is $35.9848, down 5 percent from the 2006 factor of $37.8975.

The new anesthesia conversion factor (ACF) for 2007 is $15.3328, a cut from last year's ACF of $17.7663.

Know When to Use Each Factor  

As an anesthesia or pain management coder, you might rely on both conversion factors, depending on your providers' specialties. Be sure you calculate your providers' fees based on the correct factor to ensure accurate reimbursement.

National CF use: You should base claims for any non-anesthesia services on the non-anesthesia (or national) CF. This includes any pain management services your group provides, such as diagnostic/therapeutic nerve blocks (64400-64530, Injection, anesthetic agent ...).

You should also refer to the national CF when reporting surgical services that anesthesiologists often perform in conjunction with anesthesia administration, such as Swan-Ganz catheter placement (93503, Insertion and placement of flow directed catheter [e.g., Swan-Ganz] for monitoring purposes) or arterial line insertion (36620, Arterial catheterization or cannulation for sampling, monitoring or transfusion [separate procedure]; percutaneous; or 36625, ... cutdown).

To determine payment for a procedure, multiply the conversion factor (35.9848) by the RVU (relative value unit) amount assigned to the procedure's code.

How the ACF works: The ACF comes into play when you report anesthesia services. Multiply the procedure's base units by the ACF, then add the appropriate number of time units for your total reimbursement. The area's cost of living, insurance expenses, business expenses and other factors combine to create your local ACF, which means the ACF varies from one state to another.

Brace Yourself for More Cuts

In the June 29, 2006, Federal Register, CMS proposed a new practice expense methodology, plus changes in work values stemming from the recently conducted Five- Year Review.

Federal law requires that these changes be "budget neutral," which means higher payments to some specialties must be offset by larger cuts to other specialties.

What it means: The government now estimates 6 percent in total payments to anesthesiologists in 2007 due to the Five-Year Review and an additional 1 percent cut every year through 2011 due to the practice expense changes. Following that plan would amount to a 10 percent cut in Medicare payments to anesthesiologists over the next four years -- in addition to other cuts to the national CF.

Get updates: Go online to the Federal Register or the American Society of Anesthesiologists' Web site (www.asahq.org) for the most up-to-date conversion factor information and how it will affect your practice.