CMS 2018 Rule Updates for Anesthesiology

By April 6, 2018 No Comments

The American Society of Anesthesiologists (ASA) is particularly active in the CMS space and has advocated heavily for appropriate and equal reimbursement of anesthesiology services. The new round of Centers for Medicare and Medicaid Services (CMS) has recently released two rule updates that will heavily impact anesthesiology providers in 2018. CMS is a government agency that administers governmental health programs, providing guidelines for pricing and reimbursement at the state level for providers that serve Medicare and Medicaid populations. Anesthesiology providers, including anesthesiologists and Certified Registered Nurse Anesthetists (CRNAs) are subject to such guidelines. On the whole, CMS as an agency is moving towards providing highly specific diagnosis codes for surgical procedures, thus rendering more delineated reimbursement. This applies to anesthesia procedures as well.

As of Jan 1, 2018, CMS has announced that anesthesia procedures will be affected by a unique reimbursement composition. CMS made the decision in consult with key opinion leaders in the anesthesia and medical space, including the Medicare Payment Advisory Commission, the American Society of Anesthesiologists (ASA), and the American Medical Association.

To briefly summarize, the CMS rule changes will affect anesthesiologists and CRNAs as follows:
1. Endoscopic retrograde cholangio-pancreatography (ECRP) will now be treated as a unique code. In addition, ECRPs will be reimbursed at a higher base unit as compared to prior to this ruling, at a rate of 6 units versus 5 units. For reference, one unit is equivalent to approximately 8 to 22 minutes of provider time.
2. On the converse, the unit allocation for colonoscopies, including screening, has been reduced. These procedures will now receive 3-4 units per procedure.

General Anesthesia

In response to the above Rule Updates, the ASA released a statement criticizing the undervaluation of endoscopies. The ASA, after surveying its well-established membership of anesthesiology professionals, has concluded that endoscopic procedures should receive, at minimum, four units.

While the difference in one unit may seem minor, changes in unit allocation has serious implications for reimbursement. To conduct a simple thought experiment, one could imagine 10,000 endoscopy procedures occurring per year in an anesthesia provider’s office. At a rate of 5 units per procedure, the net annual reimbursement would equate to 10,000 procedures * 5 units per procedure * 22.1887 conversion factor = 1,109,435.00 USD. However, at the updated CMS rate, this net annual reimbursement would change to 10,000 procedures * 3 units per procedure * 22.1887 conversion factor = 665,661.00 USD, a sharp decrease in reimbursement. If anesthesia providers continue to allocate the same amount of time to the procedure, the decreased unit assignation could lead to a dramatic undervaluing of the physician or CRNA’s time. However, if the healthcare administrator tied to this provider aims to achieve reimbursement parity, administrators may require providers to minimize the time they spend per procedure per patient, which could potentially lead to medical and safety errors. From the viewpoint of the ASA, CMS rule changes that decrease unit allocation for routine procedures is dangerous for the provider, the patient, and the healthcare system as a whole.

The anesthesia space will continue to be influenced by the rapidly changing US healthcare system. Anesthesiologists, CRNAs, and healthcare administrators will benefit from maintaining an up to date understanding of CMS governance and policy as related to reimbursement for providers.