Anesthesia Coding Alert

The 2001 Physician Fee Schedule, effective Jan. 1, 2001, was published in the November 1, Federal Register. Understanding the changes in this years fee schedule will allow anesthesia professionals to plan for the financial consequences of the new conversion factor.

Conversion Factor Changes

One big change that affects medical professionals across the board is the rise in the Medicare Part B conversion factor, or what Medicare will pay per unit for any given procedure. The new conversion factor is $38.2581, a 4.5 percent increase from the 2000 conversion factor of $36.6137. This conversion factor is the base dollar amount that is multiplied by the relative value units (RVUs) of each procedure to arrive at the national Medicare payment rate for each code.

Although the overall conversion factor increased for 2001, anesthesia reimbursement has seen a slight decrease. Because anesthesia billing is based on procedure units as well as time, anesthesia uses a conversion factor separate from that of other specialties. This is the conversion factor with which anesthesia providers should be primarily concerned. The national average conversion factor for anesthesia is now $17.26 (effective Jan. 1), down from $17.77 in 2000. Local conversion factors can vary, however, depending on geographic location.

For example, the new anesthesia conversion factor for Ventura, Calif., is $17.62, which is higher than the new average factor. The anesthesia conversion factor for the rest of the state, however, is $17.07.

This change in conversion factor will obviously affect providers reimbursement levels. Consider these comparisons between the same procedure performed under the 2000 and 2001 anesthesia conversion factors.

Coronary artery bypass graft surgery is performed on a patient (using, for example, 33511, coronary artery bypass, vein only; two coronary venous grafts). The base amount for anesthesia during this procedure is 20 units. If the procedure takes six hours and 21 minutes to complete, that equals 26 time units (four 15-minute time units for each of six hours and two 15-minute time units for the extra 21 minutes). The 26 time units are added to the 20 base units for a total of 46 units that the anesthesiologist can charge for the procedure.

If performed on a Medicare patient, the average pay for such a procedure in 2000 would have been $817.42 ($17.77 x 46 units); in 2001 the average pay for the same procedure and patient will be $793.96 ($17.26 x 46 units).

For those patients with private insurance, reimbursement can increase but still may not cover the anesthesiologists charges. Assuming the same procedure and amount of time as above, if the usual, customary and reasonable reimbursement for the private carrier is $29.10 per unit, the anesthesiologist will now receive $1,338.60 for the procedure ($29.10 x 46 units). That may look much better than the Medicare situation on the surface, but may still represent a loss for the provider. If the anesthesiologists charges $50 per unit, his or her total charge for the procedure would be $2,300, or almost $1,000 more than what the carrier will reimburse.

As shown in this example, the write-offs associated with anesthesia care are extreme. If the provider tries to recoup all of his or her costs, the patients responsibility toward payment is huge. Coders expect this situation to worsen in 2001 because of the decreasing conversion factors. Unfortunately, providers and coders can do little except cope for the moment and hope that conversion factors will be increased in the coming years.

Pain-management Conversions

The conversion factor news for pain management practitioners is better: Pain-management codes (such as 64400*-64484 for diagnostic or therapeutic nerve blocks) and other procedures paid under the general fee schedule follow the overall conversion factor average of $38.2581. The exact factor will vary by area (as with the anesthesia conversion factor), because this is an average increase instead of an across-the-board implementation.