October 8, 2012

The Office of the Inspector General (OIG) within the Department of Health and Human Services has published its Work Plan for 2013.  On the list of Medicare issues on which the OIG will focus next year is the following:

Anesthesia Services—Payments for Personally Performed Services (New)
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 anesthesiologist services reported on a claim with the “AA” service code modifier met Medicare requirements. Physicians report the appropriate anesthesia modifier to denote whether the service was personally performed or medically directed. (CMS’s Medicare Claims Processing Manual, Pub. No. 100-04, ch.12, § 50) The service code “AA” modifier is used for anesthesia services personally performed by an anesthesiologist, and the “QK” modifier is used for medical direction of two, three, or four concurrent anesthesia procedures by an anesthesiologist. The QK modifier limits payment at 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. (Social Security Act, §1833(e).)

The requirements for reporting services with modifiers AA and QK are twenty years old.  We would have thought that the two modifiers, and the differences between them, were well understood by the anesthesia community.   Readers will recall that anesthesia is considered “personally performed” and denoted by modifier AA when:

1. The anesthesiologist continuously performs the entire service alone; or
2. The anesthesiologist is a teaching physician involved in one anesthesia case with one resident; or
3. The anesthesiologist is involved in training residents in a single anesthesia case, two concurrent anesthesia cases involving residents or a single anesthesia case involving a resident that is concurrent to another case paid under the medical direction rules (since 2010); or
4. The anesthesiologist is continuously involved in a single case involving a student nurse anesthetist; or
5. The anesthesiologist and the CRNA or anesthesiologist assistant are involved in one anesthesia case and the services of each are found to be medically necessary. 

The anesthesiologist can report “medically directing” the CRNA or anesthesiologist assistant, entering modifier QK on the claim form, as long as he or she can document performance of the seven steps of medical direction—which are also extremely familiar, and which we will not repeat here.

Most groups that employ both the anesthesiologist and the nurse anesthetist probably do not run the risk of submitting an AA claim for a case in which both providers were involved.  Such a mistake would be too obvious and too costly—and unnecessary, since the group will be paid the full Medicare allowed amount by filing a medical-direction (QK) claim for the physician’s service plus a claim with modifier QX for the medically directed CRNA’s service.

Furthermore, if the documentation cannot support medical direction, for example because the nurse anesthetist took a lunch break during which the physician was personally performing, the group to which both the CRNA and the MD have reassigned their billing rights—most likely, their mutual employer—may follow the practice of reporting the case under the CRNA’s name only, using modifier QZ (CRNA service without medical direction) and thus receiving 100 percent of the payment.  We say “may follow the practice” of using QZ for incomplete medical direction cases because the Medicare regulations neither explicitly permit nor prohibit such use of the QZ modifier.  Some Medicare Administrative Contractors have given their approval.  We are not aware that any anesthesia group has ever been challenged by Medicare for reporting QZ for cases that a CRNA performed without medical direction but with some degree of medical supervision.  Some groups nevertheless avoid this use of QZ out of either an abundance of caution or a commitment to the integrity of the data.  See Byrd JR, Merrick SK, Stead SW. Billing for Anesthesia Services and the QZ Modifier: A Lurking Problem.  ASA Newsl. 2011; 75(6): 36-38.

There is greater potential for error and for fraud where separate employers are billing for an anesthesiologist and a nurse anesthetist involved in a single case.  The CRNA may feel that the MD’s medical direction did not satisfy the seven-step test.  The CRNA may, therefore, report a QZ service while the MD submits a claim for QK—or for AD (medical supervision, which pays less than medical direction), or even for personally performed anesthesia, AA.  Or the CRNA may appropriately report QX while the MD mistakenly files an AA claim.  The total billed to Medicare would be between 100 and 201 percent of the allowable.

Although the OIG expressly targets only the situation in which the anesthesiologist submits a claim with modifier AA without having “personally performed” the service, this appearance of a care-team modifier issue in the annual Work Plan, for the first time, suggests that we should anticipate and pay attention to other possible misuse of the modifiers.  Recall that the only legitimate pairs of modifiers that may be reported for the same case are those in Columns 3 and 4 in the table below:

The broader range of issues that concern the Medicare authorities—as well as the seemingly intractable confusion in this area—are evident in the list of new CMS-approved audit issues on one of the Recovery Audit Contractor’s (Connolly’s) websites.  The list includes both:

and the inverse,

At least one of the RACs, therefore, is just as interested in nurse anesthetists’ QZ (without medical direction) claims as it is in anesthesiologists’ unsubstantiated use of the AA (personal performance) modifier.  We at ABC believe that this may turn out to be the tip of the iceberg.  Just as we did in last week’s Alert, we respectfully remind our readers to make sure that their documentation fully supports the services billed, including the modifiers submitted.

One medical-direction scenario for which there is no clearly applicable set of modifiers gives us pause, now that the OIG and a RAC are going to be focusing on how anesthesiologists and CRNAs report their services.  In this scenario, an anesthesiologist and a CRNA are involved in a single case at the end of the day.  When all the other cases finish, the MD lets the CRNA go home, because the MD can now personally perform the anesthetic just as easily as he or she can continue to medically direct the single CRNA in the operating room suite.

Technically this situation is not personally performed, medically directed, or without medical direction.  The Medicare payment system does not stipulate any way to report a case that changes from one form to another before the end of anesthesia time, e.g., from medical direction (QK) to personal performance (AD) when the CRNA leaves.  Only one modifier can be on the MD claim, and only one on the CRNA claim; and the times need to match. 

Most compliance officials know that Medicare is not seeking a windfall by virtue of the inadequacy of the modifiers to describe common, safe and efficient care-team scenarios.  In the situation we are discussing here, at least one clinician who is qualified to provide anesthesia alone is with the patient throughout the case.  Logically and qualitatively, the divided service furnished is the equivalent of any other scenario in which the anesthesia practice can bill for 100 percent of the allowed amount.  That is why good compliance plans often contain a section establishing a uniform policy of billing these divided cases as AA or QK+QX and explaining the rationale.

Now that the use of the AA and QK modifiers are on the OIG’s and Connolly’s radar, ABC will be seeking clarification from our clients’ MACs as to acceptable ways to bill cases that start out as medically directed and finish as personally performed by the anesthesiologist.  Please let us know if you already have the written clarification we will be requesting.  We will of course keep you posted on our progress.

With best wishes,

Tony Mira
President and CEO