Conversion Factors
Due to constraints of existing law, there will be another reduction in the “conversion factor” for Medicare providers in the coming year. This numerical indicator helps to determine expected reimbursement rates under the PFS. For 2025, the RBRVS (non-anesthesia) conversion factor will be reduced by 2.83 percent, compared to the average amount these services were paid for most of 2024. Again, this applies to non-anesthesia services, such as surgical procedures. For anesthesia providers, this means a reduction in the amount of reimbursement they receive for postoperative pain blocks and invasive line placements, for example.
The decrease in the RBRVS conversion factor incorporates the following factors:
- The 0.0 percent overall update required by statute;
- Expiration of the temporary 2.93 percent increase in payment for 2024 required by statute; and
- A relatively small estimated 0.02 percent adjustment necessary to account for changes in work relative value units (RVUs) for some services.
This amounts to an estimated 2025 RBRVS conversion factor of $32.3465, a decrease of $0.94 (or 2.83 percent) from the current 2024 conversion factor of $33.2875.
The final rule for 2025 will also mean lower Medicare reimbursement for anesthesia services. The 2025 anesthesia conversion factor (ACF) is $20.3178, representing a decrease of 2.20 percent from the 2024 ACF of $20.7739.
Practical Impact
As the American Society of Anesthesiologists (ASA) has rightly noted, actual payment rates are impacted by a range of policy changes that are included in the final rule. Naturally, the actual financial impact of the final rule on each practice will largely depend on the group’s case and payer mix. In addition, the reimbursement impact will differ based on specialty. CMS expects that the final rule will have a -2 percent financial impact on vascular surgeons and a +4 percent change for clinical social workers, for example. The table below (taken from the final rule) indicates the overall expected financial impact the final rule will have on anesthesiology and interventional pain management. However, changes in the conversion factors are not reflected in the table.
In response to the final rule for 2025, the ASA released the following comment concerning these latest cuts to provider reimbursement:
The final rule underscores how the Medicare payment system is broken and in dire need of reform. Since the summer, ASA and other medical specialties have been advocating for congressional action to stop these cuts and for more comprehensive reforms to take place.
ASA is committed to advocating for changes to the broken Medicare payment system and ensure that anesthesiologists and pain medicine physicians are paid fairly. ASA supports stopping the January 1, 2025 payment cut and implementing a mandatory inflation adjustment to Medicare payments to allow for the compensation of our physicians and other clinicians to match rising cost of living across the country.
We will continue to support the lobbying organizations, such as the ASA, in their efforts to stop these cuts from going into effect by convincing Congress to put a permanent, workable and equitable system in place; or, at the very least, mitigate the 2025 reimbursement reductions. More information about the final rule will be coming your way over the next few weeks, including changes for chronic pain practices and the Quality Payment Program.