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Tony Mira, Chairman and Chief Executive Officer of MiraMed

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Anesthesia for Endoscopy: Economics 101

Following dramatic growth in the provision of—and reliable reimbursement for—anesthesia services by an anesthesiologist or nurse anesthetist for endoscopic procedures, we are seeing isolated payer policy changes intended to limit utilization. We predict similar changes from other key payers. We advise anesthesia practices that are expanding their endoscopy service to continue, but with close monitoring of productivity and reimbursements. ABC clients interested in a detailed analysis are invited to contact their account executives.

When the Centers for Medicare and Medicaid Services (CMS) implemented its policy for anesthesia payment for endoscopy four years ago—after which most other insurance plans followed suit—many anesthesia providers felt a critical question had been definitively answered. For years, advocates had argued for the presence of an anesthesia provider during endoscopic procedures, but the concern was that payers would not agree. Payer policies had been inconsistent and unpredictable.

While many anesthesia practices, especially those in the East, had expanded their role in endoscopy and endoscopy centers, others, especially those in the West, proceeded more cautiously. The current Medicare policy not only confirmed a public policy commitment to anesthesia in encouraging Medicare patients to obtain regular screenings, but also provided a means for anesthesiologists to be paid. It meant that if a patient had anesthesia for a routine screening colonoscopy and nothing was found, the patient had no financial responsibility for a deductible or co-payment.

The result of this policy change was a dramatic growth in the provision of anesthesia services for endoscopy. Anesthesia for endoscopy has been the fastest growing service line for most anesthesia practices across the country. The 2018 code changes that expanded the endoscopy codes from 2 to 5 and changed the base values for lower endoscopy procedures have not diminished the enthusiasm of most practices to pursue and expand this line. From a practice management perspective, anesthesia services for endoscopy have been a significant line extension for many groups.

Endoscopist preferences have also contributed to the expansion. In an article, Donald Arnold, MD, former chair of the ASA committee on quality management and departmental administration, noted that endoscopists "prefer to have their patients as comfortable as possible during procedures and also be able to focus exclusively on performance of endoscopic procedures which entail unique risks. These goals have led endoscopists to increasingly request use of sedation/anesthesia techniques which requires involvement of physician anesthesiologists and other anesthesia professionals."

For a while, public pressure to ensure payment for anesthesia for endoscopy was a powerful motivator for insurance plans. At one point, Aetna proposed a policy of not paying for procedures involving ASA I and II patients. The backlash was so swift and compelling that Aetna immediately backed off.

For years, claims for anesthesia services for endoscopy have been paid in a manner consistent with payment for other anesthesia services; that is, some claims were denied for a variety of reasons, but most were resolved.

It is difficult to determine the exact increase in the overall volume of claims for anesthesia for endoscopy for each insurance plan, but based on the increase in such claims that ABC has seen, we can assume substantial growth.

The chart below represents a sample of 24 large clients across the country that administered a total of 980,000 anesthetics in 2017. This total represents a 16 percent increase in surgical and obstetric volume for the five-year period (2013 to 2017). During this same period, endoscopic activity increased 36 percent.

Two aspects of this growth should be noted. First, five practices in the sample saw very little growth in their endoscopic volume, but 19 saw significant increases. It should also be noted, however, that while a 16 percent increase in endoscopy cases took place from 2013 to 2014, the rate of growth has diminished over time (as indicated by the line on the chart). In fact, the overall volume of endoscopy cases in the sample actually dropped one percent from 2016 to 2017 (as indicated by the bar)

Anesthesia Services for Endoscopy, 2013-2017*

*Data compiled by ABC from a sample of 24 anesthesia practices across the U.S.

The dramatic growth in endoscopy cases among anesthesia practices has not gone unnoticed by insurance plans that must pay more for these claims than originally budgeted. Many insurance plans had not predicted the growth—and the expense—of these claims, and have begun rethinking their commitment to these services, underscoring the fundamental economic reality that healthcare is a business.

Harvard Pilgrim in Massachusetts is an example. The Harvard Pilgrim policy was the first to state a set of specific conditions that must be met in order for a patient to receive anesthesia care for an endoscopic procedure. Essentially, these conditions preclude ASA I and II patients. The endoscopist must document medical necessity for anesthesia as they must do for every other procedure.

It is curious that the Harvard Pilgrim policy specifically refers to the criteria that must be met for MAC anesthesia. Most patients undergoing endoscopy receive a general anesthetic. They receive propofol and are unconscious for the procedure. None of the policies we have reviewed thus far mention whether a general anesthetic is more likely to be approved. 

Based on anecdotal evidence from anesthesia providers across the country, other plans appear to be formulating similar policy guidelines. Increasingly, we are hearing that endoscopists are having trouble obtaining preauthorization for anesthesia care for these operations. (ABC monitors denials by payer for clients for evidence of a new policy.) 

From an economic perspective, the trend away from payment for anesthesia for endoscopy is not surprising. The high volume of endoscopy claims raised questions about whether the services were over-valued, and the AMA and CMS agreed to a devaluation of a colonoscopy from a base of 5 to a base of 3 for Medicare claims and a base of 4 for commercial claims. Now, we are seeing isolated payer policy changes intended to limit utilization. We predict similar changes from other key payers.

Where will it end? The economic and medical arguments for providing regular screenings still stand. It is much cheaper to pay for routine screenings than an extensive colon resection, and the screening colonoscopy has clearly shown its value as an important tool for early detection. What seems to be happening is a logical attempt by payers to pre-screen patients for anesthesia services for endoscopy based on medical necessity.

If you are expanding your endoscopy service, we recommend that you continue, but be sure to closely monitor your productivity and reimbursements.

ABC clients: If you would like more information about how changes in payment for anesthesia services for endoscopy may affect your practice, please feel free to contact your account executive for a detailed analysis.

With best wishes,

Tony Mira
President and CEO

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