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2016 Medicare Physician Fee Schedule Final Rule: A Few Notes for Anesthesiologists


On October 30, the Centers for Medicare and Medicaid Services (CMS) issued a final rule updating payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) on or after January 1, 2016. For the first time, the proposed rule implements several policies mandated under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) back in April, the same legislation that fixed the flawed Sustainable Growth Rate formula.

Among the many provisions of the proposed fee schedule, the following items are among those most noteworthy for the coming year, particularly for anesthesiologists.

2016 Anesthesia Conversion Factor

The proposed national anesthesia conversion factor (CF) for 2016 is $22.4426, a slight decrease from the CF of $22.6093 which went into effect on July 1, 2015. CMS originally published the anesthesia conversion factor as $22.3309, however that number failed to take into consider all calculations required. The American Society of Anesthesiologists (ASA) found the error and worked with CMS to resolve the miscalculation.

The overall conversion factor for flat fee E&M services and other procedures paid under the Resource Based Relative Value System (RBRVS) will be $35.8279. While providers were expecting a .5 percent increase under MACRA, that increase was reduced by a .02 percent RVU “budget neutrality adjustment” and an additional .77 percent decrease introduced because CMS did not meet a certain cost-savings target implemented under the ACA. In all, the overall conversion came in at.3 percent less than the current 2015 factor of $35.9335.

According to a Medscape Medical News article which walks through the calculations used, though the decrease is small, some providers are still angry that they are receiving a cut. “CMS’s inaction will result in an across-the-board cut to physicians in 2016,” said Halee Fischer-Wright, MD, the president and CEO of MGMA. “For all the ambitious plans touted by the agency to move Medicare toward a value-based payment system for physicians, its inability to adequately review misvalued codes under current fee-for-service calls into question how CMS will be able to implement far more sophisticated payment models in the future.” Fischer-Wright submitted a statement to Medscape Medical News on behalf of MGMA.

Anesthesia in Screening Colonoscopies

The 2015 Medicare Fee Schedule statutorily included separately billable anesthesia services as integral to screening colonoscopies, regardless of the diagnosis or tissue removed, and prohibited Medicare Administrative Contractors (MACs) from applying deductibles for the surgical or anesthesia services for those procedures. However, as most of you know, Medicare did not make all necessary changes to the regulations to expressly reflect the inapplicability of the deductible to those anesthesia services.

In the 2016 final MPFS, that technical change has been made. Meanwhile, the MACs should already have updated their payment processed to reflect that change.


The guidelines to successfully report or participate in the Physician Quality Reporting System (PQRS) for the 2016 reporting year (affecting 2018 payments) remain largely the same. One change is that group practices using the GPRO option will now be able to choose the Qualified Clinical Data Registry reporting option, which was previously available only to providers who reported as individuals.

As well, 37 new individual measures were finalized across various reporting options, including four new cross-cutting measures. As well, three new measures groups (registry only) and one new GPRO web measure is included in the proposed rule. Eight additional measures were proposed but not finalized.

Five new measures proposed by the American Society of Anesthesiologists were finalized for the registry reporting option only:

  • 404 Anesthesiology Smoking Abstinence
  • 424 Perioperative Temperature Management
  • 426 Post-Anesthetic Transfer of Care Measure: Procedure Room to a Post Anesthesia Care Unit (PACU)
  • 427 Post-Anesthetic Transfer of Care: Use of Checklist or Protocol for Direct Transfer of Care from Procedure Room to Intensive Care Unit (ICU)
  • 430 Prevention of Post-Operative Nausea and Vomiting

Several commenters on each of these five measures expressed concern that none of the proposed anesthesia measures included a claims option, noting that “not all eligible professionals have the resources to implement registry reporting.” CMS said they “appreciate” the concerns but do not feel that the new measures being registry only will “negatively impact a significant number of providers.” In an article about the final rule, the ASA expressed their disappointment with the limited reporting options of these new measures. “ASA appreciates the inclusion of additional measures into PQRS but is disappointed that the agency did not finalize the use of such measures in a way conducive to the reporting mechanism that most anesthesia providers report.”

As well, CMS will remove measure 193 Perioperative Temperature Management, which was available in both the claims and registry options, and will change measure 44 Coronary Artery Bypass Graft: Preoperative Beta Blocker in Patients with Isolated CABG Surgery to no longer be available for claims.

Finally, under MACRA, PQRS is set to expire with the 2016 reporting year (affecting 2018 payments). The Merit-Based Incentive Payment System (MIPS), mandated through MACRA, will replace PQRS and other Medicare quality programs beginning with the 2017 reporting year (affecting 2019 payments).

Value-Based Payment Modifier

For the 2016 reporting year (affecting 2018 payments), CMS will now include several non-physician practitioners (NPPs) in the Value-Based Payment Modifier (VBPM) program: PAs, NPs, CNSs, and CRNAs. As in the past, those providers newly introduced to the program will be held harmless from downward adjustments, but that provision applies only to those providers who practice as solo NPPs or those who are in a group of only NPPs. Any solo physician or group of two or more physicians and/or NPPs will be subject to upward or downward payment adjustments based on their ratio of quality to cost as compared to other providers in the Medicare program.

CMS did hold steady the adjustment factors and percentages for the upward or downward payment adjustments to +2.0x and -2.0 percent for solo practitioners and groups up to nine providers and +4.0x and -4.0 percent for groups of 10 or more providers.

Like PQRS, the VBPM program is set to expire with the 2016 reporting year (affecting 2018 payments) to be replaced by MIPS.

Misvalued Codes

Because anesthesia procedure codes 00740 (Anesthesia for procedure on gastrointestinal tract using an endoscope) and 00810 (Anesthesia for procedure on lower intestine using an endoscope) are used for anesthesia furnished in conjunction with lower GI procedures in more than 50 percent of several types of colonoscopy cases, Medicare has flagged these codes for review in their misvalued codes initiative. While the base value of these codes will not necessarily be lowered, because of the mandate to reduce costs by 1 percent through revaluing codes, these codes are easy targets because of their increased use. No action was taken for 2016, but CMS left these codes on the list to review further.

As well, CMS has flagged 103 high utilization codes as potentially misvalued, including emergency intubation and placement of central venous lines, arterial lines and PA catheters. The American Medical Association/Specialty Society Relative (Value) Update Committee will evaluate these codes for misvaluation.

For more information, review the CMS Fact Sheet about the Final Rule of the MPFS or view the Final Rule in its entirety.

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Charity Singleton Craig

Charity Singleton Craig is a freelance writer and editor who provides communications and marketing services for CIPROMS. She is responsible for creating, editing, and managing all content, design, and interaction on the company website and social media channels in order to promote CIPROMS as a thought leader in healthcare billing and management.

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