Anesthesia Business Consultants

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Anesthesia Industry and Market News: eAlerts

eAlerts are the latest industry information regarding regulatory changes, helpful compliance reminders, or any number of relevant topics in the fast-paced, ever-evolving specialty of anesthesia.

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September 11, 2017


The Office of Inspector General has begun issuing monthly rather than yearly or biannual updates on its Work Plan.  Anesthesia and pain groups should become familiar with the new format on OIG’s website and subscribe to the agency’s Work Plan updates to stay informed.  The 2017 Work Plan includes two anesthesia-related items:  non-covered services and payments for personally performed services.  These two projects remain active; OIG expects to issue a report in 2018.  (Of interest to pain specialists: OIG cites opioid-related fraud and abuse and safety concerns among Medicare beneficiaries as one of its continuing priorities.)  Anesthesia providers and pain specialists are reminded to be certain that services provided comply with Medicare requirements and that this compliance is accurately reflected in their documentation.

Anesthesia practices should be aware that the Health and Human Services Office of Inspector General (OIG) has converted to a "dynamic, web-based” format for its annual Work Plan that now publishes updates monthly rather than once or twice yearly.  The change reflects the agency’s effort to “enhance transparency around OIG's continuous work planning efforts” and more effectively “respond to emerging issues.”

Anesthesia providers and practice management staff will want to familiarize themselves with the new format.  The current OIG Work Plan includes two issues specific to anesthesia services (see below).  These anesthesia-related areas have been a part of previous Work Plans and anesthesia-related items are likely to appear in future years’ audits and evaluations.  If you haven’t done so already, we suggest signing up for the OIG email list serve (scroll down and select "get email updates") to receive news regarding Work Plan projects on a regular basis.

As stated on its website, the OIG Work Plan sets forth projects to be addressed during the fiscal year and beyond by OIG’s Office of Audit Services and Office of Evaluation and Inspections, including OIG audits and evaluations that are underway or planned.  Projects listed in the Work Plan involve participants in programs funded by the Centers for Medicare & Medicaid Services as well as public health agencies, such as the Centers for Disease Control and Prevention and the National Institutes of Health, and human resources agencies such as Administration for Children and Families and the Administration on Aging.

Consistent with the announcement, the OIG Work Plan website now reflects three categories of Work Plan items: (1) Recently Added; (2) Active Work Plan Items; and (3) Work Plan Archive, which captures all OIG Work Plan reports released since 1997.  Each month, newly initiated Work Plan items are posted to the Recently Added category.  These new items are shifted to the Active Work Plan Items category the following month, where they will remain until deemed "complete" by the OIG, at which time they will be added to the archives.

Two items specific to anesthesia services were included in the 2017 Work Plan and remain in the Active Work Plan Items category.  The OIG indicates that it will report the findings from its audits and evaluations in these two areas in 2018.  The items are: 

Anesthesia Services:  Non-Covered Services

Medicare Part B covers anesthesia services provided by a hospital for an outpatient or by a freestanding ambulatory surgical center for a patient.  We will review Medicare Part B claims for anesthesia services to determine whether they were supported in accordance with Medicare requirements.  Specifically, we will review anesthesia services to determine whether the beneficiary had a related Medicare service.

Anesthesia Services:  Payments for Personally Performed Services

Physicians must report the appropriate anesthesia modifier code to denote whether the service was personally performed or medically directed (Centers for Medicare & Medicaid Services, Medicare Claims Processing Manual, Pub. No. 10004, Ch. 12, § 50).  Reporting an incorrect service code modifier on the claim as if services were personally performed by an anesthesiologist when they were not will result in Medicare paying a higher amount.  The service code “AA” modifier is used for anesthesia services personally performed by an anesthesiologist, whereas, the “QK” modifier limits payment to 50 percent of the Medicare allowed amount for personally performed services claimed with the AA modifier.  Payments to any service provider are precluded unless the provider has furnished the information necessary to determine the amounts due (SSA § 1833(e)).  We will review Medicare Part B claims for personally performed anesthesia services to determine whether they were supported in accordance with Medicare requirements.  We will also determine whether Medicare payments for anesthesia services reported on a claim with the AA service code modifier met Medicare requirements.

The key with regard to this issue is to ensure accurate documentation.  There is no problem with reporting “personally performed”/“AA” when that is the situation. Several anesthesia groups are physician only; 100 percent of their cases will be coded “AA.”  Other groups medically direct many cases but still have a number of physician-only cases.  The risk is in coding the case “AA” when it was medically directed—unless the physician is medically directing residents.  Those cases would also be billed using the “AA” modifier.  To ensure accuracy and identify any troublespots, we recommend that you review how your billing staff is coding medically-directed and personally-performed cases.

Opioids a Top Priority

Of special interest to pain specialists is OIG’s identification of “protecting beneficiaries from drug abuse, including opioid abuse” as an ongoing top priority for the agency (see the May 2017 Compendium of Unimplemented Recommendations.)  OIG reported striking trends in Medicare Part D spending for opioids and compounded drugs in a June 2016 data brief.  An OIG study reported several trends raising concerns of fraud and abuse as well as concerns regarding patient safety, including:

  • Medicare spending for Part D drugs has continued to rise by more than $10 billion a year
  • Spending on commonly abused opioids exceeded $4 billion in 2015
  • Spending on compounded drugs has increased dramatically
  • In particular, spending on compounded drugs has risen more than 3,400 percent since 2006 (see graph below)

Source: Office of Inspector General, U.S. Department of Health and Human Services,

OIG also zeroed in specifically on opioids in a 2017 data brief, which reported the following findings:

  • One in three Medicare Part D beneficiaries received a prescription opioid in 2016
  • About 500,000 beneficiaries received high amounts of opioids
  • Almost 90,000 beneficiaries are at serious risk; some received extreme amounts of opioids, while others appeared to be doctor shopping
  • About 400 prescribers had questionable opioid-prescribing patterns for beneficiaries at serious risk.


While more frequent updates to the OIG's Work Plan will provide information on new and emerging trends, it may also pose challenges from an operational and resource perspective.  With the monthly updates, anesthesia groups, practice managers and compliance officers will need to more proactively monitor OIG initiatives that may occur throughout the year, as priorities and direction may be subject to change.  Anesthesia providers will want to be certain that services being provided are in compliance with Medicare requirements and that this compliance is reflected in their documentation.

The fall issue of our quarterly newsletter, Communiqué, will feature an article by attorney Vicki Myckowiak, Esq., of Myckowiak Associates, P.C., on strategies for dealing with a government audit.

With best wishes,

Tony Mira
President and CEO