Anesthesiology Digest – August 30, 2022

August 26, 2022

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Anesthesiology Digest: News from August 2022.
The Stark Reality of Physician Reimbursement
By Mark Isenberg, EVP, Health Advocacy, Zotec Partners |August 24, 2022

The Centers for Disease Control and Prevention (CDC) defines health equity as, “Every person having the opportunity to attain his or her full health potential and no one is disadvantaged from achieving this potential because of social position or other socially determined circumstances.”  It is indeed a noble pursuit, but without access to qualified physicians financially able to provide services to underserved populations, it is nothing more than a myth. Today, physicians are managing the business of healthcare with the deck stacked against them. Just months after being lauded as heroes for their efforts in the pandemic, they are being rewarded by significantly reducing their ability to maintain a private independent practice. They are not just fighting to save lives but fighting to keep their practices afloat.

Decreasing Medicare reimbursement, declining commercial rates, inflation, and the ever-changing “quality” metrics that physicians are forced to comply with are leading to burnout, retirement, change of profession, consolidation, and an overall strain on our healthcare system.

Reality of Medicare Cuts and Inflation Rates
The 2023 Medicare Physician Fee Schedule Proposed Rule poses a significant reduction in Medicare reimbursement for many clinicians, including: Cut of approximately 4.42% to the conversion factor (containing a Congressional one-time boost of 3% for 2022). Reduction to the fee schedule and an outstanding threat of the 4% PAYGO decrease. End of the 2% sequestration moratorium in 2022. Collectively, this could create double-digit cuts if no action is taken.

You can take action now by contacting your representatives and senators.

To read more, go to Becker’s Hospital Review.  
Current Insurer Calculation of Qualified Payment Amount for Out-of-Network (OON) Care May Violate No Surprises Act
August 22, 2022

In possible violation of the No Surprises Act, health insurance company calculations of Qualified Payment Amounts (QPA) for anesthesiology, emergency medicine and radiology services (and possibly other specialty services) likely include rates from primary care provider (PCP) contracts. A new study conducted by Avalere Health and commissioned by three national physician organizations examined a subpopulation of PCPs and determined that contracting practices may directly impact the QPA. This new study raises significant concerns about the accuracy of insurer calculated QPAs. ASA remains committed to eliminating the QPA as the primary factor in arbitration and implementing a more fair dispute resolution process to ensure a level playing field for providers and continued access to quality care for patients.

Read the full press release.   
High Out-of-Pocket Costs Led to Low Patient Collection Rates
By Victoria Bailey | August 17, 2022

Self-pay after insurance patient collection rates dropped from 76 percent in 2020 to 55 percent in 2021 as the share of out-of-pocket balances over $7,500 grew.

Patient collection rates at hospitals declined and bad debt increased when out-of-pocket bills reached $7,500, according to a report from Crowe Revenue Cycle Analytics (Crowe RCA).

The report reflects data from more than 1,400 hospitals across 47 states through 2021.

The firm found that self-pay after insurance accounts were responsible for nearly 60 percent of patient bad debt in 2021, compared to 11 percent in 2018. The increasing number of high deductible health plans (HDHPs) has led to lower premiums but higher out-of-pocket costs when care is needed.

“In the past, insured patients may have had a $75 to $200 copay and many were able to pay the total amount at the point of service,” Brian Sanderson, a principal in the Crowe healthcare consulting group, said in a press release. “These days medical bills could be thousands of dollars, even after the insurance balance has been resolved, which is more than a lot of patients can afford, and hospitals are struggling to collect this revenue.”

The share of patient statements with balances of more than $7,500 grew from 5.2 percent in 2018 to 17.7 percent in 2021. The percentage of balances higher than $14,000 increased from 4.4 percent in 2018 to 16.8 percent in 2021.

As these high balances are more difficult for patients to pay, hospitals and providers face challenges when collecting payments before services or during the 120-day collection window after the insurance balance is resolved.

Self-pay after insurance collection rates dropped over 20 percentage points between 2020 and 2021, going from 76 percent to 55 percent. The report found that patients with insurance were less likely to pay their out-of-pocket bills when the balance surpassed $7,500. The collection rate in 2021 for claims between $5,000 and $7,500 was 32 percent, while the collection rate for claims between $7,501 and $10,000 was 17 percent. According to Sanderson, ongoing labor shortages and rising patient out-of-pocket costs have led hospitals to struggle to collect these high balances from patients.

To read more, go to Revcycle Intelligence.  
Hospitals Squeezed, Insurers Boosted as Utilization Lags
By Nona Tepper, Caroline Hudson | August 17, 2022

The balanced relationship between COVID-19 and non-coronavirus utilization tipped during the second quarter, leading some of the largest health insurance companies to raise profit forecasts while health systems bemoaned the negative impact on their finances.

Health systems attributed the slump in inpatient services to staff shortages that limited procedures, telemedicine alternatives and fewer acute COVID-19 patients. Insurers credited the decline to patients deferring care due to rising inflation, the availability of more cost-efficient value-based care payment arrangements and care shifting from hospitals to less expensive outpatient sites.

This condition may be short-lived. Volume is down compared with before COVID-19 arrived, but that appears to be gradually changing. “It’s not at 2019 levels, but it’s trending towards that,” said Glenn Melnick, a health economics and policy professor at the University of Southern California. “Volume is going from minus 10 to minus five to minus three-something. It’s still below, but the trend suggests that it’s going to return to normal, certainly at some point this year.”

Changes in volume
Fewer patients are being admitted to hospitals, but those who are, tend to be sicker, said Erik Swanson, senior vice president of data and analytics at the consulting firm Kaufman Hall. Higher inpatient acuity and longer stays at Mass General Brigham led to a 5% decrease in discharges during the quarter that ended June 30, which denied the Boston-based not-for-profit hospital of revenue it would have gained from new intakes.

Inpatient surgeries, in particular, are lagging. Those volumes are about 18% below the pre-pandemic level, according to a Kaufman Hall analysis of 900 hospitals. Inpatient surgery volume fell 4% in the second quarter at Nashville, Tennessee-based HCA Healthcare’s facilities. Inpatient surgeries at Boulder Community Hospital in Colorado were down 3.4% in the first half of 2022.

To read more, go to Modern Healthcare.  
CMS Cancels MIPS Facility-Based Scoring Option for Performance Year (PY) 2022
August 10, 2022

The Centers for Medicare & Medicaid Services (CMS) announced, in response to the ongoing COVID-19 public health emergency (PHE), a measure suppression policy in the Fiscal Year (FY) 2023 Hospital Value-Based Purchasing (VBP) Program. This policy allows CMS to suppress the use of measure data if the agency determines that circumstances caused by the COVID-19 PHE significantly affected those measures and the resulting quality scores. CMS finalized this special scoring policy for FY 2023, resulting in a total performance score not being calculated for any hospital for FY 2023. 

This finalized policy directly impacts the Merit-based Incentive Payment System (MIPS) facility-based scoring in performance year 2022. CMS uses the total performance score from the Hospital VBP Program to calculate the previous year’s MIPS facility-based scores. Since the 2023 total performance score from the Hospital VBP will not be available, the MIPS facility-based score will not be able to be calculated for PY 2022. 

While this may have little to no impact on most anesthesia groups reporting to MIPS, there may be some groups that rely on the facility-based score to satisfy their reporting requirements and will be directly affected by this policy. Eligible clinicians and groups that rely on the facility-based score will need to submit data on MIPS quality measures to receive a score other than zero for the quality performance category. CMS will automatically calculate a score for the cost performance category for facility-based clinicians and groups that meet the case minimum. If the facility-based clinicians or group does not meet the case minimum for any cost measures, the cost performance category will be reweighted to 0% and the weight redistributed to other performance categories. Facility-based clinicians and groups that find themselves without available or applicable measures to report can request a performance category reweighting by submitting an extreme and uncontrollable circumstances (EUC) application.

To read more, go to ASA’s website.  
Only 16% of Hospitals Complying with Price Transparency Rules
By Amy Baxter | August 10, 2022

Few hospitals are actually complying with price transparency rules nearly two years after being implemented. 

In fact, only 16% of 2,000 hospitals are posting prices of their most common procedures for the public, according to a new report released by The Hospital Price Transparency Rule, which went into effect Jan. 1, 2021, requires hospitals to post some 300 procedures, with the intent to create a more competitive marketplace and enable consumers to price shop for procedures. 

Since the rule went into effect, hospitals have been slow to comply, even after they were granted extensions to meet the rule. The noncompliance has forced federal agencies to consider increasing monetary penalties.
“Unfortunately, after nearly 20 months of the Hospital Price Transparency Rule being in effect, the compliance rate has stalled, with only marginal improvement to 16% compliance up from 14.3% in our previous report,” Cynthia Fisher, founder and chairman of, said in a statement. “The quickest way to substantially improve compliance is through monetary fines which work, as our report shows.”

Out of 2,000 hospitals, just 319 were complying with the rule, according to’s report. Another 101, or 5%, did not post any standard charges file and were in total noncompliance. In addition, none of the hospitals owned by HCA Healthcare and Ascension Health, two of the largest hospital systems in the country, were found to be compliant. CommonSpirit Health Systems, the second-largest hospital system in the U.S., was much more compliant, with 45 out of 111 hospitals meeting the requirements. That’s compared to just 8 out of 111 hospitals in the system in February 2022. 

To read more, go to Health Exec.  
Americans Are Spending Less Due to the Cost of Healthcare
By Amy Baxter | August 8, 2022

Nearly four in 10 Americans are cutting costs due to the high cost of healthcare –– and rising inflation may be making the issue worse, according to a recent West Health and Gallup poll. 

Overall, that’s roughly 98 million adults who have delayed or skipped healthcare treatments, trimmed regular household expenses or borrowed money in the past six months in order to afford healthcare in the United States. These actions were much more common among lower-income households, with over half of adults in households earning less than $48,000 per year reporting cutting some spending. 

However, the high cost of healthcare impacts wealthier adults, too –– 19% of respondents in households earning at least $180,000 have reported cutting spending to pay for healthcare. The issue also impacts women more frequently than men, and women younger than 50 are disproportionately compelled to cut back on healthcare costs due to its rising costs. Three in 10 women report economizing to pay for healthcare –– and 36% of women under 50 –– compared to 22% of men, according to the poll, which surveyed 3,001 U.S. adults June 2-16, 2022.

For those who can’t pinch pennies to afford healthcare, skipping treatments can have dire impacts. More than one-quarter of adults reported delaying or avoiding medical care or purchasing prescription drugs in the prior six months due to high healthcare prices, and 43% of adults in lower-income households making less than $24,000 per year said the same. Without regular healthcare, those with certain conditions could see their health status deteriorate and acuity rise.

Inflation is likely having a big impact on Americans’ wallets and their ability to pay for healthcare, as 21% of respondents said they delayed or avoided medical care or purchasing prescription drugs because of inflation in general. Overall, the rising cost of goods and services is driving more cost-cutting measures that are non-healthcare related, as well. A whopping 59% of adults reported driving less and 30% reported cutting back on utilities because of the higher price of goods. 

To read more, go to Health Exec.  
Insurers to Crack Down on Providers Performing Unscheduled Procedures
By Nona Tepper | August 9, 2022

Health insurance companies are increasingly pressing doctors for more information when they perform unscheduled, minor procedures such as drawing blood, performing skin biopsies or conducting electrocardiograms on patients the same day as visits for other reasons. 

Insurers are zeroing in on providers evaluation and management claims that include modifier 25. Providers use evaluation and management codes on claims for assessing or controlling patient health, such as when they have office visits or perform surgical procedures. They add a modifier 25 when they provide significant and separately identifiable services during the same patient visits, such as removing a mole.  Insurers have previously paid out massive settlements because they denied payments for modifier 25, and their new policies set them up for more lawsuits, said Ed Gaines, vice president of regulatory affairs and industry liaison at Zotec Partners, a revenue cycle management company. 

“This is history repeating itself,” said Gaines, who sits on the American College of Emergency Physicians’ reimbursement committee and participated in legal challenges to similar practices in the past.

Horizon Blue Cross Blue Shield of New Jersey is mulling a plan to halve pay for all claims that include modifier 25 starting Nov. 1, according to a notice sent to providers. The not-for-profit insurer was originally set to enact the policy at the start of August. The company credited the reimbursement cut to revisions made by Change Healthcare in its ClaimsXten claims editing software, according to the notice. 

Change Healthcare and Horizon, the largest carrier in New Jersey with more than 3.8 million members, didn’t respond to interview requests. 

“These modifiers just take into account real life,” said Larry Downs, CEO and general counsel at the Medical Society of New Jersey. “This is what happens. Patients come in, and they need additional services.” 

The physician group sent a letter to Horizon asking the insurer to reconsider the policy last month. Standard coding practices operate under a theory of “multiple procedure logic,” which reduces payment for additional care provided during a patient encounter to avoid double paying for services such as anesthesia and facility fees, Downs said. Under this theory, modifier 25 claims are already discounted, he said. Cutting payment for these modifiers will increase healthcare costs by forcing patients to schedule separate appointments and delay needed care, he said. 

To read more, go to Modern Healthcare.  
Coming to a Contract Negotiation Near You: The No Surprises Act
By Nona Tepper | August 3, 2022

When Cigna wanted to cut reimbursements for a physician group, the health insurance company came armed with a new negotiating tool: the No Surprises Act.

The insurer notified a clinical practice last week that its contracted rate was no longer competitive because of the federal ban on surprise billing, according to an email provided to Modern Healthcare. Indeed, Cigna wrote, it was requesting rate reductions for all providers with the same specialty.

Cigna regularly reviews contracted rates it deems above-market with an eye toward bringing them down, a spokesperson wrote in an email. And the company doesn’t routinely cite the No Surprises Act as a reason to change payment levels, the spokesperson wrote.

Yet written notices from Cigna and other health insurance companies citing the No Surprises Act indicate that the new law is influencing insurers’ in-network and out-of-network negotiations with providers. Whether that’s a good thing depends on who you ask. 

Physicians point to these messages as evidence that health insurance companies are trying to leverage the surprise billing ban to strong-arm them into accepting lower payments. Insurance carriers are seeking pay cuts as high as 50%, American Medical Association President Dr. Jack Resneck Jr. wrote in an email. 

“We continue to communicate our concerns to regulators that these payer tactics will lead to inadequate networks or access issues,” Resneck wrote. “The AMA is monitoring this situation and will work relentlessly to beat back these cynical ploys.”

Insurers argue they are working to lower costs for patients, particularly among private equity-owned specialty providers that charge exorbitant rates. 

In February, CVS Health’s Aetna refused to pay more than the rate outlined in the No Surprises Act for services the air ambulance company Global Medical Response provides its members, according to a bill the Greenwood Village, Colorado-based firm submitted to regulators. Aetna didn’t respond to interview requests.

Blue Cross and Blue Shield North Carolina, which declined to comment, referenced the No Surprises Act in letters sent to providers in March and November 2021, writing that it would end contracts with anesthesiologists, radiologists, emergency physicians and others unless they agreed to payment reductions of up to 30%.

UnitedHealth Group subsidiary UnitedHealthcare likewise requested a 40% decrease, according to a letter the American College of Emergency Physicians sent to the North Carolina congressional delegation in March.

North Carolina physicians charge some of the highest rates nationwide, with some out-of-network doctors billing at more than 1,000% of Medicare rates, a UnitedHealthcare spokesperson wrote in an email. “The No Surprises Act is bringing greater price transparency to the healthcare system and finally putting an end to the financially crippling surprise bills that consumers have struggled with for years,” the spokesperson wrote.

Doctors who accept these reimbursement cuts would struggle to keep their practices open and those who reject them would only be available out-of-network, said Ed Gaines, vice president of regulatory affairs and industry liaisons at revenue cycle management firm Zotec Partners. Both outcomes threaten patient access, he said. Health systems are already struggling with rising costs due to inflation, labor shortages and looming Medicare pay cuts, said Gaines, who sits on the American College of Emergency Physicians’ reimbursement committee.  

To read more, go to Modern Healthcare.  
Coding Drives Up Medical Billing Costs in the US
By Jacqueline LaPointe | August 3, 2022

Complex coding structures in the US are driving up medical billing costs in the US, making it one of the most expensive countries to get paid, according to a new study.

The study published in Health Affairs used microlevel time-driven activity-based costing measurements to compare the billing and insurance-related (BIR) costs at provider offices in the US and five other countries.

The countries included single-payer systems (Canada), as well as multipayer systems in which there are public and private payers that reimburse providers (Germany and Australia). Researchers also included sites in Singapore, which uses a government subsidy model to reimburse providers global budget payments, and the Netherlands, which has universal and compulsory multi-private-payer coverage.

The study confirmed what research has established: BIR costs in the US are generally much higher than the costs in other countries. In fact, BIR costs ranged from a low of $6 in Canada to a high of $215 in the US for an inpatient surgical bill. In the US, that represented about 3.1 percent of the total professional revenue for the procedure. Providers also spent about 100 minutes processing the claim.

Only the sites in Australia had comparable BIR costs. The country has a mix of publicly and privately funded payers, as well as universal coverage. BIR costs were significantly less in Canada than in the other nations, while Germany, Singapore, and the Netherlands had comparable costs.

Higher costs in the US and Australia were attributed to higher coding costs, researchers found.

“We observed that high US costs are caused primarily by expensive and extensive coding activities, not higher wages paid to US personnel,” they wrote in the study. Meanwhile, hospitals in Canada, Germany, Singapore, and the Netherlands had much lower coding-related costs. Researchers said the finding suggests that the US could achieve savings by “simplifying and standardizing payment procedures.”

The countries mentioned above may have vastly different ways of financing healthcare, but researchers noted a common thread with coding. Each country has national structures that standardize how payers reimburse providers. For example, providers in Canada, Germany, and the Netherlands have a standard list of charges, like Medicare’s diagnosis-related groups (DRGs). Contract terms for German and Dutch payers are also the same for most billing codes, with just a small fraction of billing code prices determined through negotiations between providers and payers.

The US has a very different coding process in which each payer has its own forms and documentation requirements, creating a significant burden on providers to translate clinical documentation into billable codes for reimbursement. Because of standardization in other countries, providers spend less time coding or do not need coders to translate documentation into billable codes, researchers explained. Singapore also has an automated billing system to record and process its DRG codes based on ICD-10 codes and its list of charge codes.

To read more, go to RevCycle Intelligence.  
Inpatient Hospitals get 4.3% Medicare Reimbursement Bump
By Maya Goldman | August 1, 2022

Medicare payments for hospital inpatient services will rise 4.3% in fiscal 2023 under a final rule the Centers for Medicare and Medicaid Services published Monday.

That amounts to (A)pay increase of about $2.6 billion and is higher than the 3.2% rate hike CMS proposed in April.

Hospital trade groups asked CMS to use its “exceptions and adjustments” authority to override the regulatory payment formula and give facilities anevenlargerincrease, but the agency declined to do so. The original proposed rate wouldn’t have adequately covered hospitals’ costs, industry groups said.

“Regarding commenters’ request that CMS consider other methods and data sources to calculate the final rule market basket update, we believe the 2018-based [inpatient prospective payment system] market basket continues to appropriately reflect IPPS cost structures and we believe the price proxies used…are an appropriate representation of price changes for the inputs used by hospitals in providing services,” CMS wrote in the final rule.

The rates for next fiscal year apply to general acute care hospitals that participate in the Hospital Inpatient Quality Reporting Program and use electronic health records, although other adjustments could impact individual hospitals’ rates, according to CMS. Long-term care hospitals will get a 2.3%, or $71 million, increase.

CMS used the most recent available data to set fiscal 2023 rates, despite the ongoing COVID-19 public health emergency. But the agency will continue to suppress and edit measures for its Hospital Readmissions Reduction Program, Hospital-Acquired Condition Reduction Program and Hospital Value-Based Purchasing Program to keep facilities from being rewarded or penalized by pandemic circumstances.

Medicare Disproportionate Share Hospital and Medicare uncompensated care payments will decrease by about $300 million in fiscal 2023, down from a proposed $800 million cut. CMS will distribute about $6.8 billion in uncompensated care payments next fiscal year.

To read more, go to Modern Healthcare.  
Learn more about what Zotec Partners can do for your anesthesiology practice here.
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