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November 2000
Financial
Impact If Payers Use Medicare Rates
Johnstone
RE, Hosaflook C. Anesthesiology 2000; 93:852-7
Commentary by David
Lubarsaky, M.D.
[see
abstract below]
Bob Johnstone and
Carrie Hosaflook have written a very interesting article. Their conclusions
mirror those from another article recently published in the Journal
of Clinical Anesthesia on the same issue, albeit with a different slant
[1]. Basically, the government undervalues the provision of anesthesia
services compared to similar services provided by other doctors. If
a single payer system were proposed, Medicare rates would be the most
likely anchor of such a system. Even in the absence of a single payer
system, many third party payers are converting to MCR multiples as payment
schemes. Dr. Johnstone and Ms. Hosaflook examine the impact on West
Virginia University if all third party payers converted to MCR rates,
and also examined what would happen if all patients (including current
indigent patients with no payments) were covered under these same rates.
Appropriately, they also compared the effect on the anesthesiology department
to that of radiology (another hospital based service), surgery (with
whom we work closely), and the medicine department.
We'll cut right
to the chase. The anesthesia department would lose 37% of its third
party payments if MCR rates were universally employed, and still lose
more than 20% if those rates were expanded to cover all indigent patients
currently receiving care. The cuts in expected reimbursement were larger
than any other department. Compared to the 37% hit that the anesthesia
department would take, Radiology took a reduction of 26%, surgery 22%,
and medicine 13%.
The Johnstone article
assumed that 100% of the MCR rate would be paid. However, that is only
true if MDs are supervising one resident or working alone. At institutions
where a care team practice is utilized, or where the faculty routinely
supervises two residents, the application of MCR rates AND rules (as
in a single payer system) would destroy that department's finances.
The insult would be doubled due to the halving of rates when two or
more rooms are supervised, and the fact that the residency review commission
demands a maximum of two rooms supervised.
The ASA has prepared
a booklet outlining the reasons for the disparate way that anesthesiology
is valued, and this article, the one from JCA, and the ASA booklet are
key tools for the practicing anesthesiologist. It has been my experience
that referring to these reports are helpful when entering into negotiations
over anesthesia rates and as support to avoid MCR multiples as a "fair"
way to divvy up multi-specialty payments.
References:
-
Using
Medicare multiples results in disproportionate reimbursement for anesthesiologists
compared to other physicians. Lubarsky DA, Reves JG: J Clin
Anesth 12:238-241, 2000 Link
to full abstract
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ABSTRACTS
Financial Impact
If Payers Use Medicare Rates
AUTHORS:
Johnstone RE, Hosaflook C
SOURCE:
Anesthesiology 2000; 93:852-7
ABSTRACT:
BACKGROUND: In 1992,
Medicare changed its method for calculating physician payments. The resulting
fee schedules have contained low payments for anesthesiologists. Now,
other third-party (insurance) payers are using these schedules. The financial
impact on anesthesiologists if all payers pay Medicare rates is unknown.
METHODS: Payments
from Medicare were compared with payments from other third parties in
each clinical procedural terminology (CPT) grouping used by the West Virginia
University Department of Anesthesiology during 1998. Changes in total
Department of Anesthesiology receipts were determined if non-Medicare
third-party payers paid Medicare rates. Then, the effect of adding payments
at Medicare rates from patients without insurance was determined. Finally,
potential changes in receipts of the Departments of Anesthesiology, Radiology,
Surgery, and Medicine were compared by considering only patients with
insurance and recalculating total payments to the departments using Medicare
rates.
RESULTS: Medicare paid less than other third-party payers in every clinical
procedural terminology group. Total Department of Anesthesiology payments
would decrease by 31% if all non-Medicare third-parties paid Medicare
rates. Adding payments at Medicare rates from patients without insurance
still leads to a 21% decrease in total Department of Anesthesiology receipts.
Considering only patients with third-party coverage, Medicare-rate payments
would decrease total Department of Anesthesiology payments by 37%, whereas
radiology, surgery, and medicine payments would decrease by 26, 22, and
13% respectively.
CONCLUSIONS: Universal payments at Medicare rates would substantially
reduce revenue to anesthesiologists, proportionally more than to radiologists,
surgeons, or internists.
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