Providers face significant changes in their anesthesia arrangements due to reimbursement declines and staffing shortages.1 Payer reimbursement rates have decreased, with average Medicare rates dropping by 5.5% over the past four years. Staffing shortages are forcing leaders to innovate their staffing models and rethink how the anesthesia care team will function in the future. The shortage of certified registered nurse anesthetists (CRNAs) has led many hospitals to employ physicians to perform tasks traditionally handled by CRNAs.
Navigating the complexities of anesthesia billing is essential for managing these challenges, as its process differs significantly from the billing processes of other medical specialties. Anesthesia charges are calculated based on several factors, including:
- Base units: Each procedure has an assigned base unit value based on difficulty.
- Time units: Calculated in 15-minute increments, with anesthesia time starting when preparation begins in the operating room.
- Modifying units: Account for emergencies or patient conditions.
- Conversion factor: Location-specific cost per unit.
Formula: (Base units + Time units + Modifying units) x Conversion factor = Anesthesia charge
Ensure accurate application of Medicare’s concurrency rules. For instance, Medicare allows three base units per procedure when an anesthesiologist is involved in more than four concurrent anesthesia procedures. Be sure to use the correct modifiers; for example, “AD” for medical supervision of more than four concurrent procedures. This Centers for Medicare & Medicaid Services (CMS) rule should be applied for all payers.
Best practices for anesthesia billing and compliance
To optimize anesthesia billing and compliance, consider the following:
- Educate practitioners and staff on documentation requirements. If it’s not documented, it didn’t happen.
- Maintain meticulous records of all anesthesia services provided, capturing and coding every billable item correctly.
- Understand payer guidelines and local coverage determinations (LCDs) to optimize billing.
- Ensure compliance by avoiding overcoding and adhering to correct coding initiatives.
- Recognize the difference between add-on and bundled codes, for example:
- Bill placement of arterial line (36620) and Swan Ganz catheter (93503) separately from the main CABG procedure (00567).
- Use a modifier, such as 59, for bundled post-op nerve blocks (i.e. 64488, 64415, 64447) to bill in addition to main procedure.
- File all claims electronically and in a timely manner and perform multiple checks to ensure compliance with payer requirements.
- Conduct consistent follow-ups on pending claims and denials.
- Perform regular audits to identify and rectify any billing discrepancies.
- Leverage advanced billing software to perform coding checks and flag errors before claim submission, which can reduce claim denials and streamline the billing workflow.
Key performance indicators (KPIs) in anesthesia billing
Monitoring KPIs in anesthesia billing is crucial for assessing the financial health of an anesthesiology practice. Regularly tracking these KPIs can provide a comprehensive assessment of a practice’s revenue cycle health and help identify areas for improvement. Here are the top KPIs to monitor in any practice2:
- Total medical revenue after operating costs
- Gross revenues
- Net FFS or other net revenues
- Collection ratios / average reimbursement rate
- Claims denial rates and denial write-offs
- Bad debt
- Payer mix
- A/R days and A/R aging comparisons
- (By bucket 0-30, 31-60, 61-90, 91-120, 120+, etc.)
- Charge posting and billing lag time
- Copay collections
- Patient due collections
- CPT® codes (E/M comparison to CMS, MGMA Procedural Profile and procedures)
- Physician / APP wRVU productivity
(Please note that this list is not all inclusive and should be modified based on the individual needs of a practice/organization.2)
Optimizing collection processes
Lastly, it is important to implement efficient collection processes:
- Thoroughly work each account while in-house, sending a final notice to the patient stating it’s the last attempt to collect before turning it over to a collection agency.
- Offer a feasible payment plan as a final effort to collect the debt.
- Resolve any disputes and ensure there are no outstanding insurance issues.
- Establish a review process for manually transferring accounts to bad debt:
- Confirm delinquency
- Send minimum number of statements before involving outside collection agency.
Anesthesia billing and revenue management can be complex, but you can ensure your practice is maximizing its revenue with the right strategies. By following these best practices, monitoring KPIs and implementing efficient collection processes, you can ensure success in your anesthesia billing and compliance efforts.
Notes:
- Bell N. “Key considerations for your next anesthesia arrangement.” MGMA Connection. April 2024. Available from: https://www.mgma.com/anesthesia424 .
- MGMA staff members. “Foundational benchmarks and KPIs for medical practice operations in 2023.” MGMA. Feb. 14, 2023. Available from: https://www.mgma.com/kpis23 .
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