Anesthesia for Endoscopic Procedures: An Update

Summary:  Endoscopy cases had been an increasing line of business for many anesthesia practices in recent years, but revaluing of certain endoscopy-related anesthesia codes and the lingering effects of the COVID pandemic have caused concern among some groups. This article will explore where we currently stand as it concerns endoscopic cases.

No one aspect of anesthesia care has been the subject of such practice focus and policy updates as endoscopy. The story of endoscopic anesthesia care can be written in three chapters with a possible epilog called COVID-19. While for many ABC clients this has been the fastest growing and most profitable line of business, the good train endo seems to be encountering some headwinds, and it is not entirely clear what the future holds. Most client surgical venues have seen case volumes return to pre-COVID-19 levels, with the exception of those dedicated to endo cases. It is true that some client practices have seen their endo volumes return to normal, but these are the exception rather than the rule. It is a complex story with many dimensions including, health care policy, economics and practice management. Every time we think the last chapter has been written there is a new factor to be taken into consideration.

Background of the Surge

From a public policy perspective, it is considered important that Americans who are over fifty receive regular colonoscopy screenings. The cost of such screenings is a small fraction of what would be paid if patients developed colon cancer and had to have their colons resected. The prevailing view has been that because of the nature of the procedure most recipients are not likely to agree unless they can be put to sleep. Because of these assumptions, the Centers for Medicare and Medicaid Services (CMS) implemented a policy change a number of years ago intended to motivate Medicare patients to get regular colonoscopies. The policy introduced the concept of screening colonoscopy into the payment formula. Specifically, it said that, if the patient was scheduled for a screening colonoscopy and the colon was found to be normal, then the patient would have no responsibility for deductible or co-payment. If a polyp was found and removed, their only responsibility would be the 20 percent co-payment.

It is not entirely clear whether this policy alone motivated so many anesthesia practices to focus on endoscopy as a new and viable line of business. The fact is that is what happened. Over a period of a few years, endo volumes increased for all clients across the country. Because so many clients perceived this as a profitable line of potential new business, they pursued it aggressively.

The Effect of Economic Law

Economists love to remind us of the law of supply and demand. When supply increases, demand drops and the price erodes. Endoscopy was a case in point. The increased volume of claims for anesthesia for endoscopic procedures resulted in a serious review of the value of the basic values assigned to endo codes, which historically has been five units. For many years, there were two ASA codes for endoscopy: 00740 for upper GI procedures and 00810 for lower GI. A few years ago, the new codes were rolled out: two codes for upper GI, two codes for lower GI and one for upper and lower. For upper GI procedures, there would be an extra unit for ERCP cases. The real drama, though, involved the values for lower GI procedures. The proposed value dropped from five to four, but CMS took this one step further and dropped the base value of a screening colonoscopy to three units. The potential impact of these code and value changes was significant. The reality seems to be that only a small percentage of colonoscopies actually meet the screening criteria. Before the codes were implemented, we were projecting a potential drop of 12 to 15 percent in endo revenue. For most practices, the actual drop was less than 9 percent.

By now, the endo train was chugging along at full speed and payers were starting to express concern about the value of anesthesia claims for these services. Despite the fact that CMS has always considered it important to pay for anesthesia so that patients will get regular screenings, some payers are starting to balk. Within a few months of each other's announcements, Harvard Pilgrim in Boston and the UCLA Medical Group in Los Angeles announced that they would not pay for colonoscopies for normal, healthy patients otherwise classified at ASA I and II physical status (but Harvard Pilgrim essentially relented and only excludes physical status 1 patients). Apparently, they came to realize that they were paying for many more anesthetics than they had budgeted for. If you are a healthy non-Medicare patient who works for UCLA, you can get anesthesia for your endoscopy but on a cash basis.

We are now experiencing what economists call the diminishing marginal productivity of the far side of the supply curve. As practices continue to develop their endo business, a combination of factors is starting to drive down the average yield per case. The Medicare yields have obviously dropped as a result of the new codes. What we are also starting to see, however, is an increase in the number of denials. For the most part, this has not impacted the actual payment received, but payers are denying an ever-increasing number of claims and asking for additional information before they will pay them. The chart below is snapshot of this trend based on a sample of data for ten clients across the country. The summary of this story is that insurance plans are making it ever more challenging to get payment.

The Effect of COVID 

And then there is the COVID pandemic, which has provided another overlay of concern to this entire discussion. Most endo centers closed in March, April and May, so obviously very few cases were done. When the centers opened up again in June for elective cases, many patients did not rush back to reschedule the procedure they should have had during the closure. As the chart below indicates, many are still reluctant to expose themselves to the virus by undergoing an endoscopic procedure. It is unclear when things will get back to pre-COVID levels. The question many clients are asking is, what will the new normal look like?

This is certainly no time to panic. Our clients have all survived the worst of the pandemic. This is the time to carefully evaluate all lines of business as one plots a course for the future. Let us be of assistance in helping you assess the revenue potential of each line of business, its profitability and optimum staffing levels. After all, your success is our success. If you have any questions, please reach out to us at info@anesthesiallc.com