GAO report confirms payment disparity between Medicare and commercial payments for anesthesia services
The U.S. Government Accountability Office (GAO) has just released its long-awaited report comparing Medicare and commercial payment rates for anesthesia services. The GAO concludes that Medicare anesthesia payments are 67 percent lower than average commercial payments.
The GAO study was requested in late 2005 by Representative Pete Stark (D-CA), now chair of the Ways and Means Health Subcommittee, and by former Representative Nancy Johnson (R-CT), his predecessor as chair. Reps. Stark and Johnson expressed concern that the difference between Medicare and private anesthesia payments could create regional discrepancies in the supply of anesthesiologists and nurse anesthetists, and asked GAO to explore the issue.
The GAO studied:
1. The extent to which Medicare payments for anesthesia services were lower than private payments across Medicare payment localities in 2004
2. Whether the supply of anesthesia practitioners across Medicare payment localities in 2004 was related to the differences between Medicare and private payments for anesthesia services, or to the concentration of Medicare beneficiaries in these localities
3. Compensation levels for anesthesia practitioners compared to other health care practitioners in 2005 and trends in the number of anesthesiology residency positions and the number of graduates of nurse anesthesia programs
Among relevant information included in the GAO report:
In 2004, average Medicare payments for a set of seven anesthesia services provided by anesthesiologists alone were lower than average private payments in 41 Medicare payment localities, and ranged, on average, from 51 percent lower to 77 percent lower than private payments. For all 41 payment localities, Medicare payments were lower than private payments by an average of 67 percent.
The number of anesthesiologists decreased as the concentration of Medicare beneficiaries increased in 87 payment localities; the number of nurse anesthetists increased as the concentration of Medicare beneficiaries increased in the 87 payment localities.
Notwithstanding Medicare payments, the overall compensation for anesthesiologists and nurse anesthetists compares favorably to other physicians and non-physician practitioners.
GAO specifically did not review hospital stipend levels and any correlation to Medicare beneficiary numbers—a possible marker of cost-shifting to cover Medicare physician payment shortfalls. ASA believes this was a missed opportunity to highlight another indicator of Medicare payment problems.
