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2024 Medicare Physician Fee Schedule: Impact on Anesthesia

November 13, 2023

Summary

Every November, the federal government issues its physician fee schedule for the following year. The rule for 2024 contains provisions that will impact all specialties. Today’s alert looks at the possible impact the 2024 final rule will have on anesthesia providers, in particular. 

The Centers for Medicare and Medicaid Services (CMS) has released its 2024 Medicare Physician Fee Schedule (PFS) final rule. While there are minimal provisions that apply directly to the anesthesia specialty, anesthesiologists and CRNAs will find a few noteworthy changes for next year—not the least of which involves the rate of reimbursement for Medicare services. In addition to the 2,709-page rule, CMS also published a fact sheet that attempts to summarize the major changes for next year. The following will act to provide a couple of those highlights that will be of interest to the anesthesia community.

Reimbursement Rates

The finalized 2024 PFS conversion factor is to be set at 32.74. This represents a decrease of 1.15 from the current (2023) PFS conversion factor of 33.89, translating to a reduction of 3.4 percent. For anesthesia providers, this conversion factor will come into play when submitting claims for non-anesthesia services, i.e., services other than “TOS 7,” such as invasive lines, postoperative pain procedures and ultrasound guidance.

While the overall conversion factor has been lowered, the final rule indicates that there will be an increase in payments for certain evaluation and management (E/M) services. We submit an E/M code on behalf of our anesthesia clients whenever they perform a pain round (other than those involving an indwelling epidural catheter) or an anesthesia consult, for example.

The anesthesia conversion factor for 2024 has been set at 20.4349. This reflects a 0.69 drop from the current (2023) anesthesia conversion factor of 21.1249, or a 3.27 percent reduction. As we indicated in our recently published “Special Alert,” the final anesthesia conversion factor for 2024 ended up being even less—if ever so slightly—than the proposed anesthesia conversion factor. The 2024 PFS proposed rule set the anesthesia conversion factor at 20.4370. So, the final number comes in just a tad lower than what was originally suggested. To some, this would be seen as adding insult to injury.

The final rule includes comparative data showing the estimated overall change to Medicare reimbursement, per specialty, expected for next year. In Table 118 (pp. 1950-1951) of the 2024 fee schedule, we are treated to a chart with 50 specialties—give or take—depicting the expected change in their overall reimbursement for 2024, as compared with current-year levels. Interestingly, and despite the overall lower conversion factor, some specialties actually had a projected positive change in their Medicare payment percentage. For example, both endocrinology and family practice are shown to have an overall three-percent increase in expected reimbursement. Conversely, specialties such as anesthesiology, pathology and audiology are slated to realize a reduction of two percent. Interventional radiology was impacted the most with a projected loss of four percent in their Medicare reimbursement for next year.

The key takeaway is that the government is continuing to put downward pressure on provider reimbursement relative to Medicare services—in spite of the fact that overall costs in the U.S., from food to housing, are dramatically rising. Once again, it will be up to Congress to step in with a last-minute bill that provides some measure of correction to this trend—assuming they are so inclined.

Provider Enrollment

The 2024 final rule contains several regulatory changes to the Medicare and Medicaid provider enrollment process, which of course would extend to the anesthesia provider community. These changes include, but are not limited to, the following:

  • Creation of a new Medicare provider enrollment action labeled a “stay of enrollment,” which CMS believes will ease the burden on providers while strengthening Medicare program integrity.
  • Requiring all Medicare provider and supplier types to report additions, deletions, or changes in their practice locations within 30 days.
  • Establishing several new and revised Medicare denial and revocation authorities.
  • Clarifying the length of time for which a Medicaid provider will remain in the Medicaid termination database.  

Specialty Response

It didn’t take long for the anesthesia community, through one of its primary lobbying organizations, to weigh in on the provisions of the final rule. The American Society of Anesthesiologists (ASA) released a statement on the same day the final rule was published, calling on the U.S. Congress to block what it termed the “payment cut” that will be realized by anesthesiologists and other Medicare providers should the 2024 conversion factors go into effect.

The ASA statement states, in part:

Congress must act before the end of the year to prevent these deleterious cuts from negatively impacting the Medicare patient population’s access to care. A critical, immediate fix that Congress can do is to block the new G2211 payment code that CMS will launch in its 2024 PFS, which creates instability and imbalance in the payment system. This can be done efficiently by Congress with no impact to the Medicare budget. Congress could also pass hold harmless legislation to protect other important Medicare services from the G2211 generated cuts.

The ASA noted that nearly 90 percent of the negative adjustment to the conversion factors is attributable to a new bonus payment for office and outpatient E/M services—reflected by code G2211 that CMS has finalized for use in the 2024 payment year. So, the ASA is asserting that the implementation of G2211 “will significantly reduce anesthesiologist payments in 2024.”

The ASA places hope in a bill currently circulating in the U.S. House of Representatives. H.R. 2474—the Strengthening Medicare for Patients and Providers Act—seeks to implement a long-term fix to what it deems a broken reimbursement system.

We will have more details from the final rule in upcoming alerts, including new provisions dealing with E/M, telehealth and incentive programs. For a full treatment of the final rule, click on the following link: Federal Register :: Public Inspection: Medicare and Medicaid Programs: Calendar Year 2024 Payment Policies under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; etc.

If you have any questions on this topic, please contact your account executive. 

With best wishes, 

Rita Astani
President—Anesthesia

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