Medicare payment trends compared to inflation for anesthesia services

Study objective

Identify changes and trends in the real value of Medicare payments for anesthesia services between 2000 and 2020 and how it may affect practices.

Design

Retrospective analysis.

Setting

We utilized the Physician/Supplier Procedure Summary (PSPS) datasets of Medicare Part B claims to identify high volume anesthesia services in 2020 with 20 years of data. The Consumer Price Index was used as a measure of inflation to adjust prices.

Patients

The PSPS datasets contain summaries of all annual Medicare Part B claims and payment amounts by carrier and locality.

Interventions

Patients receiving anesthesia services.

Measurements

For each service, identified by Current Procedural Terminology (CPT) codes, we trended the average Medicare payment per procedure from 2000 to 2020 and calculated year to year changes and compound annual growth rate (CAGR). We also evaluated base and time units for each CPT code and the national Medicare anesthesia conversion factor (CF) for the same years.

Main results

The average Medicare payment in the study sample increased 20.1% from 2000 to 2020. After adjusting for inflation, the average Medicare payment per anesthesia service decreased by 20.8% over that period. The Medicare anesthesia CF increased 24.9% in the same period, and after adjusting for inflation, the real value of the CF decreased 16.9%. Average CAGR across the 20 anesthesia services was 0.88%, compared to the average annual inflation at 2.06%.

Conclusions

Average Medicare payment for common anesthesia services after adjusting for inflation have decreased from 2000 to 2020, consistent with findings in other physician specialties. Understanding these trends is important for practice viability and suggests significant financial implications for anesthesia practices and hospitals if the trend were to continue.