In November 2024, CMS finalized a 94-cent (2.83%) conversion factor decrease from 2024. The physician fee schedule conversion factor for 2025 is $32.35, down from $33.29 in 2024.
Physicians and medical groups have expressed concern over the decrease in reimbursements, sharing that year-over-year decreases are proving unsustainable for many.
"There's going to be a breaking point for smaller companies like mine. I hire [certified registered nurse anesthetists] to work for me, but the costs are almost too high to justify keeping contracts with surgery centers," Brian Cross, CRNA, owner of Youngstown, Ohio-based CS Anesthesia, told Becker's.
While there have been some notable reversals of payer moves to further cut anesthesia reimbursements, the push to cut such reimbursements is not new.
Medicare's average anesthesia rate for 2023 was $21.88, a 5.5% decline from 2019, according to an analysis by Coronis Health. Another analysis from VMG Health found that Medicare reimbursements for anesthesia services decreased from $22.2730 per unit in 2019 to $21.1249 in 2023 under CMS' final rule.
The effects of these changes are growing stronger as Medicare rates continue to decline and it becomes more difficult to rely on private payer rates and other forms of reimbursement for compensation, particularly for independent practices.
"Many anesthesia practices rely on private payer rates to offset Medicare and Medicaid losses," Mark Thoma, MD, anesthesiologist and chair of anesthesia at San Francisco-based The Permanente Medical Group, told Becker's. "However, as the proportion of Medicare patients grows due to an aging population, anesthesia practices face increased financial strain, often necessitating hospital stipends to remain viable. Ultimately, hospitals bear the burden of ensuring that anesthesia practices are fiscally viable."
This is all compounded not only by increased demand for anesthesia in general, but the increased demand of anesthesiologists to provide more comprehensive perioperative care.
"We are with our patients through every step of their journey, not just in the operating room, and we would love to see that dedication reflected in fair compensation," Jaiver Marull, associate professor in the department of anesthesiology and pain management at UT Southwestern Medical Center in Dallas told Becker's.