Medicare Cuts

Because Certified Registered Nurse Anesthetists (CRNAs) bill Medicare Part B just as physicians do, at 100 percent of the Medicare fee schedule, CRNAs are also affected by the threat of 29.5 percent cuts to Medicare payments from the flawed Sustainable Growth Rate (SGR) funding formula.  Though Congress has adopted short-term relief from this reduction, the continuing possibility of dramatic Medicare payment cuts threatens patient access to care and healthcare financing.  America’s CRNAs are deeply concerned about these possible outcomes, and we request that Congress enact long-term relief. 

During the last Congress, the House approved the Medicare Physician Payment Reform Act (HR 3961), and the Senate took up, but did not pass, the Medicare Physician Fairness Act (S 1776); either would have provided longer-term relief from the cuts.  
Though the President has included two years of SGR relief in his FY2012 budget, the 112th Congress must take action before December 31, 2011, in order to reverse pending cuts to the Medicare Part B program.
Discussions have begun on the Hill about how this Congress might address the pending SGR cuts.  We look forward to working with the current Congress to find relief from cuts to ensure as much payment stability as possible, because past Congresses have provided relief month-to-month, sometimes retroactively.  In addition to directly affecting Medicare patients, threatened cuts and the instability of temporary relief affects all plans whose rates are tied to Medicare, including the TRICARE plan for military personnel and their dependents.
The effects of the cuts on Medicare Part B anesthesia payment are dramatic.  While Medicare reimburses most physician services at 80 percent of market rates, Part B reimburses anesthesia services at about 45 percent of market rates.  Today, while private insurance reimburses an average anesthesia service at about $650, Medicare Part B reimburses it at about $276.  If the 29.5 percent cuts take effect, Medicare Part B would reduce the reimbursement of that Medicare service by $81 to $195.  According to AANA member surveys, each CRNA on average provides anesthesia for about 900 cases a year.