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ASA Submits Comments to CMS FY2011 Physician Fee Schedule Proposed Rule

Chicago — (August 24, 2010) 

Donald Berwick, MD
Centers for Medicare and Medicaid Services
Department of Health and Human Services
Attention: CMS-1503-P
Mail Stop C4-26-05
7500 Security Boulevard
Baltimore, MD 21244-1850

Re: CMS-1503-P, Medicare Program; Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2011; Proposed Rule, July 13, 2010

Dear Dr. Berwick:

The American Society of Anesthesiologists (ASA), on behalf of its over 44,000 members, appreciates the opportunity to comment on several of the issues in the proposed rule published in the July 13, 2010, Federal Register. As the recognized leaders in patient safety and quality, we congratulate you on your new role and look forward to working with you to ensure optimal care for our Medicare and Medicaid patients.

Medicare Economic Index (MEI) Revising and Rebasing

In July 2007, the United States Government Accountability Office (GAO) confirmed for the public and Congress what anesthesiologists have known and struggled with for years: Medicare payments for anesthesia services are drastically low (GAO-07-463, Medicare and Private Payment Differences for Anesthesia Services). According to the GAO, Medicare payments for anesthesia services amount to approximately 33% of the prevailing commercial payment rate. In contrast, other medical specialties receive Medicare payments that approximate 80% of their commercial payment rate. Even with modest but meaningful increases in the Medicare anesthesia conversion factor over the last few years, the GAO findings still hold true as demonstrated by ASA’s annual commercial conversion factor surveys

Clearly, anesthesiologists have been doing their share, willingly or unwillingly, to reduce health care system expenditures long before the passage of the Patient Protection and Affordable Care Act (PPACA). However, given the acknowledged fact that the Medicare anesthesia conversion factor is woefully inadequate and regulators increasingly pressure providers to do more with fewer resources, anesthesiologists cannot absorb any additional Medicare payment cuts.

CMS is proposing to revise and rebase the Medicare Economic Index (MEI), a fixed-weight input price index with an adjustment for the change in economy-wide, private nonfarm business multifactor productivity. Used to estimate the increase in costs for providing physicians services, the index is comprised of two broad categories: physician time (work) and physician practice expense (practice expense and professional liability insurance). Since 2000, the MEI, together with the Sustainable Growth Rate (SGR), has been used to calculate the annual update to the physician fee schedule. 

ASA understands that CMS proposes to rebase the MEI from CY 2000 data to CY 2006 data based on the AMA Physician Practice Information Survey (PPIS). ASA has supported the use of updated PPIS data for the purposes of practice expense valuation and agrees with CMS that PPIS is “the most comprehensive source of PE survey information available to date.” While we agree with the use of the updated data and the general concept of rebasing, we strongly disagree with the CMS proposal to revise the methodology used to calculate the weights in the index. Specifically, the CMS changes to the MEI weights reduce the relative proportion of physician work from 52.466 to 48.266% and increase the relative proportion of practice expense (43.669 to 47.439%) and PLI expense (3.865 to 4.295%). To ensure that Medicare spending in the aggregate is proportionate to the new MEI weights, CMS is proposing to keep the work Relative Value Units (RVUs) constant and to inflate PE RVUs and PLI RVUs (by 16.8% and 41.3% respectively). In addition, CMS plans to reduce the conversion factor by 7.9 percent to maintain budget neutrality. If the MEI proposal is finalized, then services with a relatively higher percentage of work RVUs, such as anesthesia services, will decrease, while services with relatively high practice expenses and PLI will increase.

The proposed revision to the MEI weights will have a dramatic impact on and reduction in payment to anesthesiologists whose conversion factor is work-intensive. Under this revised methodology, provision of cost-effective, high quality care, a goal shared by the Administration and all providers, may be eclipsed by a drive to provide PE-intensive services. In contrast, work-intensive services lend themselves to precisely this type of care as the provider is better positioned to provide appropriately the timely, high quality, efficient service the patient requires.

CMS also proposes to convene a technical advisory panel later this year to “review all aspects of the MEI, including inputs, input weights, price-measurement proxies, and productivity ensure that the MEI accurately and appropriately meets its intended statutory purpose.” ASA strongly urges CMS to finalize the proposal to convene a technical advisory panel with broad representation of stakeholders to thoroughly review the MEI methodology. We believe that the most responsible course of action is for the agency to wait until it has the results of that panel’s work before imposing changes that could well turn out to be in need of revision themselves. Thus, ASA emphatically recommends that CMS delay any revision of the MEI weights pending the findings and recommendations of the technical advisory panel. To finalize the proposed changes for CY 2011, and then potentially alter the methodology in quick succession after the technical advisory panel is convened, will not only increase the administrative burden and confusion for physician practices, but also CMS staff charged with implementing such changes. Further, we fear the impact to and reaction of anesthesiologists from a reduction in their GAO-recognized low Medicare payment rate, if CMS elects to finalize the revision of the MEI weights.

If CMS believes that it must finalize and implement the MEI revisions, despite ASA’s stated recommendations, ASA strongly urges that CMS do so over a four-year transition period. We have seen in the past how the agency tries to “soften the blow” to specialties who will see decreases in payment due to changes in method and/or data source. The most recent example is the four-year transition to PPIS-driven PE RVUs, yet CMS now proposes changes that would be even more detrimental to work-intensive specialties, such as anesthesiology, without that same consideration. While it is not ideal and we strongly urge CMS to delay implementation until the findings of the technical advisory panel, a four-year transition, similar to that imposed by the PPIS PE RVUs, may mitigate to some extent the corrections that will likely be needed once a complete and contextual analysis is available. 

Physician Quality Reporting Initiative (PQRI)

ASA enthusiastically supports the CMS proposal to reduce the threshold for satisfactory reporting under the claims-based reporting mechanism to 50% of the eligible professional’s Medicare Part B FFS population to which the measures reported apply. We believe that this will achieve the intended result of increasing successful participants using the claims-based reporting mechanism. Anesthesiologists currently have three primary PQRI measures (Measures 30, 76 and 193) that may be applicable to their practice, though many will have fewer than those three applicable. The current limitations on applicable measures coupled with the lack of applicable CMS-approved PQRI registries for anesthesiologists, provides few options for anesthesiologists to participate in PQRI. Thus, we appreciate CMS recognizing the rigorous technical specifications required by some measures and the burden of contemporaneous submission of quality data codes with the Medicare claim, and taking the positive step of easing the reporting requirement for those participating via the claims-based reporting mechanism.

Recognizing the changing practice of anesthesiologists, we believe this proposal will afford the opportunity for additional anesthesiologists to satisfactorily report and earn an incentive payment. An increasing number of anesthesiologists practice in multiple facilities. Some of these facilities handle the billing responsibilities for the anesthesiologist practice, but do not provide the opportunity for PQRI participation. Thus, some of our members have successfully reported on a quality measure through one facility (e.g., a hospital), but not had the opportunity to report on the same measure through a second facility (e.g., an ASC) that does not participate in PQRI. The overall result, historically, is that the anesthesiologist would not earn an incentive because he/she would not meet the 80% threshold. We believe the proposed change to 50% will enable anesthesiologists with these administrative barriers to successfully participate in the initiative. Therefore, ASA strongly recommends that CMS finalize its proposal to change the minimum threshold for satisfactory reporting under the claims-based reporting mechanism to 50% of the EP’s Medicare Part B FFS population.

ASA also supports the CMS proposal and reiterates its position that CMS retain the 6-month reporting period for claims-based reporting of individual measures. Elimination of this alternative reporting period establishes an unnecessary obstacle for the reporting mechanism that is available to nearly all eligible professionals and is contrary to CMS’s intent to optimize participation in PQRI. We are unable to determine what costs such an alternative reporting period would add to the system. Further, retaining the 6-month reporting period for other reporting mechanisms (i.e., registry-based reporting and reporting of groups of measures), but eliminating for claims-based reporting, especially for eligible professionals who lack any other alternative reporting mechanism, places an unfair burden on such PQRI participants.

ASA has previously expressed its support of the notion that eligible professionals should be able to authorize a qualified clinical registry to submit quality measures on their behalf for the purpose of PQRI. CMS, again, suggests that future emphasis on registry-based reporting will continue in 2012. While ASA continues to support the use of data registries as a reporting mechanism for PQRI, ASA again urges that CMS ensure the transition from claims-based reporting to registry-based reporting is done on a deliberate, thoughtful timeframe. Eligible professionals are not permitted to participate in registry-based reporting unless they are submitting at least three PQRI measures. While Measures 30, 76 and 193 will provide some anesthesiologists with three measures to report, and thus the ability to participate with a qualified registry, many anesthesiologists will not find all three of these measures applicable to their practice. In addition, if any of these measures was retired or removed by CMS, anesthesiologists would not be eligible for registry-based reporting even if CMS-approved registries existed to submit data on behalf of anesthesiologists.

ASA seeks clarification of the Measure Applicability Validation (MAV) process proposal, in particular, the following CMS statement in the proposed rule.

Under the proposed MAV process, when an EP reports on fewer than 3 measures, we propose to review whether there are other closely related measures (such as those that share a common diagnosis or those that are representative of services typically provided by a particular type of EP).

We believe this statement describes the process by which CMS identifies the measure clusters used by CMS as part of MAV to determine whether an EP who reports fewer than three measures should have reported additional closely related measures. However, the CMS statement in the proposed rule seems to suggest that CMS may be considering an expansion of the MAV process to any measures deemed closely related, even if not part of a measure cluster.

If so, we seek additional clarification as to the process by which CMS would make such a determination so that we can inform our members participating in PQRI with fewer than three measures. If the MAV process only entails the measure clusters that CMS identifies each year, we also seek such confirmation from CMS.

Review of Potentially Misvalued Services - Site of Service Anomalies

Section 1848(c)(2)(K) of the Act (as added by section 3134 of the PPACA) requires the Secretary to periodically review and identify potentially misvalued codes and make appropriate adjustments to the relative values of those services identified as being potentially misvalued. CMS notes in the NPRM that it has been working with the AMA Relative Value Unit Committee (RUC) to identify potentially misvalued codes. ASA has been working within that process to address concerns raised about many of the pain procedures our members provide. We are following through on Action Plans approved by the RUC. CMS has again raised concerns about the value of certain services flagged for review due to a site of service anomaly. We will address these concerns within this letter and also through the RUC process.

Recognizing that CMS has “encouraged the AMA RUC to utilize the building block methodology when revaluing services with site-of-service anomalies,” ASA and other specialties have applied a “zero-based building block” to the services in question which confirms that the existing values, based on the recommendations the RUC made after its review of these services in February and April 2008 are accurate. The concept depends upon starting with a value of zero and building upwards. This is in contrast to the “reverse building block” CMS attempted in the CY 2010 physician fee schedule proposed rule, which began with a starting value and pulled work out. That approach was clearly flawed as it resulted in a negative work RVU for several of the services to which it was applied.

ASA provided feedback on this issue in its comment letter on the CY 2010 physician fee schedule proposed rule. Since the issue continues to be raised by CMS, we reaffirm our comments and supply many of them here. 

In our comment letter on the CY2010 fee schedule, we noted that, “CMS proposes to apply a type of “reverse building block” approach to determine work relative value units for services reviewed by the RUC for site of service anomalies. Many of these codes were reviewed by the RUC in 2008 and CMS accepted the RUC’s recommendations on an interim basis for 2009. In many instances, the pre- and post-service work was altered for the codes subject to this review and CMS is concerned that there may not have been a commensurate adjustment in the work relative value units extracted from the overall value assigned to the re-valued services.”

In the CY 2010 proposed rule, CMS stated: 

We recognize that the AMA RUC looks at families of codes and may assign RVUs based on a particular code ranking within the family. However, the relative value scale requires each service to be valued based on the resources used in furnishing the service.

ASA responded in our FY 2010 comment letter that there are multiple examples within the physician fee schedule where CMS uses methodologies that do not base valuation solely on required resources. The Practice Expense methodology is a prime example of the dollars paid for direct practice expense inputs are scaled depending on the dollars spent on indirect practice expenses. Every budget neutrality adjustment is an example of how relativity is built into the system at both the individual code level and the aggregate. It was only in 2007 and 2008 that CMS implemented a budget neutrality adjustment mandated by changes in work RVUs that resulted from the third Five Year Review by adjusting work RVUs instead of the Conversion Factor. We remain extremely concerned that CMS is suggesting that we use relative values for increases and absolute values for decreases. CMS appears to be inconsistent in that it recognizes the importance of relativity when it proposes to increase the RVUs for PE and PLI to affect revisions to the MEI, but will adjust the conversion factor rather than the RVUs for the corresponding impact on the work portion of a medical service.

ASA must vigorously protest any methodology that ignores relativity or scale under a Resource Based Relative Value Scale. As CMS stated in the background section of the CY 2010 proposed rule,

Since January 1, 1992, Medicare has paid for physicians services under section 1848 of the Social Security Act (the Act), “Payment for Physicians’ Services.” The Act requires that payments under the physician fee schedule (PFS) be based on national uniform relative value units (RVUs) based on the relative resources used in furnishing a service...

We must point out that RVUs are based on relative (not absolute) resources and do not recognize CMS authority to arbitrarily revise the Act.

Given the discussion in the CY 2011 Proposed Rule, CMS apparently continues to believe that a building block methodology is the most appropriate mechanism for valuing the resources required to provide services. If this is true, CMS should consider the potential vulnerabilities of such an approach. For instance, under the building block approach it is critical that all components be accurate and validated. As we saw in 2010, the starting values used in the reverse building block approach were problematic.

Further, a building block approach cannot capture the complexities, intricacies and subtleties involved in providing medical care. These would include those elements specified in the RUC survey: 

  1. Mental effort and judgment
  2. Technical skill
  3. Physical effort
  4. Psychological stress

These factors can be acknowledged when the services are reviewed by medically and scientifically trained physicians and other qualified providers.

Therefore, we strongly urge CMS to adopt the RUC’s recommended values for the codes reviewed due to a site of service anomaly. We remind you that those values reflect a significant reduction from the original valuation. Any misevaluation has already been adequately addressed.

Review of Potentially Misvalued Services – Anesthesia Services (PPACA Section 3134)

As stated above, Section 1848(c)(2)(K) of the Act (as added by section 3134 of the PPACA) requires the Secretary to periodically review and identify potentially misvalued codes and make appropriate adjustments to the relative values of those services identified as being potentially misvalued. The issue is germane not only at the code level but the specialty level. As you are aware, CMS pays for anesthesia services under a separate methodology from the Resource Based Relative Value System (RBRVS), and anesthesia has suffered a pronounced payment inequity since the inception of RBRVS despite some previous nominal updates addressing the situation. Again, we draw attention to the GAO recognition noted above.

Members of Congress agree with ASA on the reality described above. The Secretary received a letter dated May 28, 2010, and co-signed by 75 Members of the U.S. House of Representatives, requesting review of Medicare payments for anesthesia services as possibly misvalued and potentially undervalued. A similar letter echoing these concerns and this request from the Senate will be forthcoming.

ASA joins with Congress in requesting that CMS,

Consider this issue with the involvement of individuals with recent clinical experience, generalized expertise in the valuation process used for Part B services, and specific expertise in unique payment methodologies specifically including that employed for anesthesia services. A thorough review by these experts of possible inaccurate links between the anesthesia payment system and RBRVS system may prove fruitful. Indeed, some payment observers have suggested that misvalued links between the two systems are contributing to the anesthesia payment disparity.

Thank you very much for your consideration of our comments.


Alexander A. Hannenberg, M.D.
American Society of Anesthesiologists


Founded in 1905, the American Society of Anesthesiologists (ASA) is an educational, research and scientific society with more than 52,000 members organized to raise and maintain the standards of the medical practice of anesthesiology. ASA is committed to ensuring physician anesthesiologists evaluate and supervise the medical care of patients before, during and after surgery to provide the highest quality and safest care every patient deserves.

For more information on the field of anesthesiology, visit the American Society of Anesthesiologists online at . To learn more about the role physician anesthesiologists play in ensuring patient safety, visit Like ASA on Facebook , follow ASALifeline on Twitter and follow ASA on LinkedIn .



American Society of Anesthesiologists