Anesthesiologists Denounce Another Year of Medicare Payment Cuts, Urge Immediate Reforms

Newswise — The American Society of Anesthesiologists (ASA) condemned yet another year of cuts to Medicare payments for critically important anesthesia and pain medicine services. The proposed cuts, announced in the Centers for Medicare & Medicaid Services’ (CMS) 2024 Physician Fee Schedule (PFS), represent the fifth consecutive year of either a pay freeze or payment cut for the services anesthesiologists provide to their patients as shown in the table below. The CMS-proposed Medicare payment cuts will compound the financial strain anesthesia practices are already facing.

“Yet another year of Medicare payment cuts shows that the Medicare physician payment system is completely broken and unsustainable. A comprehensive overhaul of the Medicare payment system for physicians is long overdue,” said ASA President Michael W. Champeau, M.D., FAAP, FASA. “The Medicare payment rates are grossly inadequate due to egregious flaws in the government formula used to calculate physician payment rates. These inadequate payment rates, rising practice costs, and COVID-19 pandemic-related financial pressures seriously threaten physicians’ practice survival and patient access to care. Congress must act.”

Within the fee schedule, CMS has proposed an anesthesia conversion factor (CF) of $20.4370, representing a decrease of 3.26% from the 2023 anesthesia CF of $21.1249. The 2024 proposed Resource-Based Relative Value Scale (RBRVS) CF is $ 32.7476. This represents a decrease of 3.36% from the 2023 CF of $33.8872. CMS established this decrease due to a statutorily mandated budget neutrality adjustment for changes in work relative value units (RVUs) and practice expense updates.

Anesthesia and Resource-Based Relative Value Scale (RBRVS) Conversion Factor Trends

* CY 2024 Proposed CF

Each of these cuts compounds the financial hurt anesthesiologists and their practices are facing with Medicare payments. Although legislation passed in 2023 provided for a 1.25% update to the conversion factor for CY 2024, this is less than the 2.5% update Congress approved for CY 2023. Absent congressional action, new cuts will be effective January 1, 2024. 

ASA is committed to advocating for changes to the broken Medicare payment system to ensure anesthesiologists and other pain medicine physicians are paid fairly for the services they provide to their patients. ASA has strongly endorsed a legislative effort – H.R. 2474, the Strengthening Medicare for Patients and Providers Act, that would provide an inflationary adjustment to Medicare payments so that compensation for physicians and other clinicians matches the rising cost of the health care services they are providing. ASA has also strongly encouraged Congress and policymakers to re-evaluate the flawed budget neutrality clauses of the PFS that greatly restrict payment increases and cause continued payment cuts for many critical health care services. ASA looks forward to advocating our position before Congress and in working with CMS and other government stakeholders on proposed solutions.

Finalized provisions will become effective on January 1, 2024.