It comes from the ancient Chinese practice of lingchi. “Death by a thousand cuts” is our way of describing a long, slow, gradual process where the culmination of an entire series of misfortunes ultimately ends in ruin. In ancient China, lingchi was a manner of execution reserved only for the most egregious of criminals. Rather than a quick dispatching of the prisoner, a series of small slices would be administered throughout the entire body over a prolonged period of time. No single cut could kill, but the cumulative effect of the many wounds would eventually lead to the victim’s demise.

Not long ago, we received a communication from one of our clients whom we’ll refer to as “Dr. X.” He was responding to an alert we had published that reported on yet another Medicare policy that would negatively affect anesthesia reimbursement. The way he expressed his disappointment over the news was priceless. “Wonderful news! That’s right, let’s keep undercutting and denying and lowering physician reimbursement!” The sarcasm was thick, and the ire was evident.

Then, Dr. X had an inspired idea. He suggested we chronicle all the ways in which physicians, and anesthesia providers in particular, have been undercut over the last 20 years from a reimbursement perspective. He wanted us to show how “this little snowball is becoming an avalanche” and to summarize all that’s transpired “to cause our death by a thousand cuts.” Well said, Dr. X. The following is our summary.

The List of Grievances

Here are just a few of the challenges with which the anesthesia community has had to contend over the last two decades:

1. Falling Conversion Factors. It’s no secret to anyone who has been paying attention that, over the last several years, the Medicare Physician Fee Schedule (PFS) final rule has mandated increasingly lower RBRVS and anesthesia conversion factors. This translates to lower Medicare reimbursement each year for both surgical procedures (e.g., invasive lines, postoperative pain blocks) and anesthesia services, except in those years where Congress has stepped in to ameliorate the reductions. The PFS proposed rule for 2025 contains similar cuts to both conversion factors.
2. Fee Disparity. While conversion factor reductions have been absorbed by practitioners, such as anesthesiologists and CRNAs, Medicare payments to hospitals have generally kept increasing to keep up with the rate of inflation. It is not surprising then that some would see this disparity between hospital payments and professional fee payments as a bit unfair.
3. Fading Physical Status Payment. Not all payers pay extra for at-risk patients based on higher physical status (e.g., PS 3, 4 and 5). We cited in a recent alert that yet another major payer is now eliminating payment for these modifying conditions in some of their jurisdictions.
4. Fighting Denials. As a revenue cycle management company, we are all too familiar with the increasing effort it takes to get insurance plans to pay up. Some commercial payers have become quite creative in finding new ways to delay or deny payment. Fighting with insurance companies can be time-consuming and costly. Providers who take on this task themselves often just give up because they don’t have the time or manpower to make the calls and file the appeals. That’s why it’s good to have a partner like Coronis to fight on your behalf.
5. Flagging GI Bill. Years ago, we began to notice that some health plans were making it more difficult to get paid for certain GI cases where anesthesia was involved. For example, for an anesthesia provider to get paid for a colonoscopy case, the provider would have to ensure that certain patient metrics were met in order to prove to the payer that there was medical necessity for the anesthesia service. To add insult to injury, there was also a decrease in the colonoscopy base units in 2018 from five to four. There was a further reduction for screening colonoscopy base units to three for Medicare and certain other payers that follow Medicare, causing revenue reductions for this promising revenue stream.
6. Facets and Epidurals. Not long ago, the Medicare administrative contractors (MACs) published policies that essentially made it impossible to get paid for anesthesia services in connection with a chronic pain injection—specifically, epidural and facet injections. So, again, what had been a reimbursement opportunity for some time has now been effectively taken away.
7. Foggy Cataracts. For years, Medicare only paid four units for anesthesia for cataracts, while the ASA’s relative value guide (RVG) listed six units as the suggested value of the service. But in 2009, the RVG came into alignment with Medicare when it listed the base units for cataracts at four, reducing revenue across the payer spectrum.
8. Fiddling with CRNA Reimbursement. While Medicare and most commercial payers have historically paid CRNA services at the same rate as that paid to an anesthesiologist, there have been some outliers. That trend may be growing as a major payer (Anthem) has recently announced that, for certain localities, beginning this November, it will be reducing payments for the anesthesia services performed exclusively by a CRNA (reflected by the QZ modifier) to the 85-percent level, while still reimbursing anesthesiologists at 100 percent of the allowable.
9. Foregoing Balance Billing. Anesthesia providers who wished not to be limited by a commercial carrier’s contract rates could always opt to be non-participating with that payer, which allowed them to bill their full unit rates to the patient. With the No Surprises Act (NSA), non-par anesthesiologists and CRNAs are now limited to billing the patient at the in-network rate.
10. Finagled Contracts. Because the NSA and its implementing regulations called for payers to reimburse nonparticipating providers based on the median contracted rate, some commercial payers began to lower the rates they offered participating providers so they could establish a lower median. Some even terminated the group’s contract to force the group into a lower contract rate. In other words, a few payers used the NSA to lessen the pay for everyone—participating and nonparticipating.
11. Forced Pre-authorizations. We have reported on a recent trend involving a noticeable increase in the number of surgical cases requiring a preauthorization. If the procedure is not effectively approved by the insurance plan prior to surgery, then reimbursement is jeopardized for both the surgeon and the anesthesiologist.
12. Faltering Imaging Payment. Over the last several years, we have seen a tendency among Medicare and/or the American Medical Association (AMA)—(which produces the CPT coding manual)—to incrementally bundle imaging, whether that involve fluoroscopy in certain chronic pain procedures or ultrasound guidance (USG) in connection with certain peripheral blocks. So, whereas you could once get paid for both the block and the USG; now, the USG is not separately reimbursable for the code set in question. Those blocks pay more now, but the increase does not reach the level of compensation previously received by billing blocks and USG separately.
13. Finessing Time. For decades, anesthesiologists and CRNAs were able to bill anesthesia time during their placing of invasive lines and postoperative pain blocks—assuming those placements occurred in the OR. But since the AMA back in 2007 indicated that placement time would need to be deducted from total anesthesia time if the placement occurred prior to induction, potential time unit reimbursements were now lost.
14. Federal Incentive Programs. When Medicare began the implementation of various so-called “incentive programs” (read “coercive programs”), like the old PQRS, EHR, E-Prescribing and VBPM, they were setting up a pay for performance structure. If you were eligible to participate and failed to do so or failed to meet the various metrics, a percentage of your Medicare pay would be taken away. That same dynamic continues with today’s QPP and MIPS.

The Long Game

The above represents just a few of the developments that have taken place over the past 20 years or so that compromised provider revenue—especially in terms of the anesthesia space. Gradualism is a term that can be applied to science, politics and other disciplines. For example, a gradualist approach to political change involves incremental adjustments in law and policy implemented over a multi-year period, so as to avoid civil unrest and revolt that can break out in response to sudden dramatic change. From the perspective of many, there appears to be a gradual process in place, where—over a period of time—incremental hits to anesthesia reimbursement are creating a real financial and psychological hardship: the drip, drip, drip of bad news, the final piece of straw that causes the camel’s collapse. I like the way Dr. X puts it:

It’s pretty evident “they” are [set] on destroying independent physician practices so that we all are employed in some fashion, so that we go out of business and become a controlled widget, a commodity.

So, from the perspective of Dr. X and others, this is what it’s like to experience death by a thousand cuts. So, what can anesthesia providers do to combat this discouraging trend? Two suggestions come to mind. First, voice your concerns to the ASA and your other specialty organizations. They maintain a lobbying effort with Congress and federal regulatory agencies. Second, take full advantage of the opportunity to submit your comments to Medicare when these proposed rules come out. If you see something in their proposals that will be detrimental to anesthesia reimbursement, that’s your chance to make your voice heard.