FINANCIAL IMPACT OF THE MEDICARE FEE SCHEDULE ON A DEPARTMENT OF ANESTHESIOLOGY IN AN ACADEMIC-MEDICAL-CENTER - 2 SCENARIOS

The purpose of this study was to model the financial impact of the Med icare Fee Schedule (MFS) on an anesthesiology department in a large ac ademic medical center under two different scenarios. Scenario 1 assume s continued use of actual-time units throughout the five-year transiti on period. Scenario 2 assumes a change to the use of average-time unit s by the time the MFS is fully implemented in 1996. Twelve months of a ctual payments and frequencies for services billed to Medicare in 1991 were used as baseline data. It was assumed there would be no change i n volume of services, billing practices, or staffing patterns. It was estimated that upon full implementation of the MFS, the anesthesiology department that was studied would lose $244,000 (13%) under Scenario 1 and $945,000 (51%) under Scenario 2. There is a full transition to f inal fee schedule rates in Year 1 of the MFS transition under Scenario 1, whereas there are additional incremental losses in each successive year under Scenario 2. This study shows that HCFA's future policy dec isions with regard to anesthesiology reimbursement will have substanti al financial consequences for many practicing anesthesiologists.