What Makes Anesthesia Billing Unique?
Summary: The billing rules applicable to the practice of anesthesia are particularly complex when compared to other specialties. Anesthesia providers need to understand the nuances of these rules as they pertain to anesthesia services, OB services and flat-fee procedures. Today's article tackles all three.
The most common question our clients usually ask is whether we are collecting everything that is collectible for their practice. It is a good question, but the answer is more complicated than one might think. It has been said that anyone who asserts that anesthesia billing is easy is either a terrible biller or a terrible liar.
While every specialty has its subtleties and nuances, nothing compares to the complexity of anesthesia charges and payment calculations. This explains our focus on your specialty. First of all, there are three types of anesthesia charges: those related to surgical services, those related to obstetric services and those related to all the non-time-based incidental services provided by anesthesia practitioners. And because of the complexity of charge calculations, payers have become somewhat suspicious of the method by which charges have been determined. As a result, the specialty has become targeted from many perspectives by most major insurance plans. Staying current with the policy changes has become the primary objective of our organization.
Surgical Anesthesia Charges
We focus first on the method by which anesthesia charges and payments are determined for surgical anesthesia services. These charges often generate between 90 and 95 percent of total practice revenue. While most clients understand the basic formula used for these services—the ASA base-plus-time-unit formula—each component poses subtle and unique challenges from a billing perspective. One should also keep in mind that the way charges are calculated does not always conform the method by which insurance plans determine payment.
The ASA Relative Value Guide (RVG) provides a list of ASA codes and their base values. The calculation of a surgical anesthesia charge involves adding the base value to any appropriate modifier units and time units. No other medical specialty is paid using such a formula, which factors risk and time into the charge. While Medicare, Medicaid and most commercial insurance plans accept this basic structure for the determination of allowable payment values, there are numerous variations on the theme. Some plans accept most ASA base values but not all.
Medicare plans, for example, do not provide additional payment for physical status, age or emergency conditions. Some plans have even formulated their own relative value schedules. The calculation of anesthesia time units has been a subject of considerable debate among payers. Many years ago, CMS decided that anesthesia time should be reported by the minute. Since then, a number of plans have followed suit. All of this means that these distinctions need to be established for each payer so that charges will be calculated and claims will be prepared to each payer's specifications. An additional complication stems from the wide range of values for conversion factors. Projecting the expected value to the services provided requires a careful reconciliation of all these factors.
The most unique feature of anesthesia billing is medical direction. Since each practice will have its own staffing configuration, medical direction rules must be applied judiciously. Our system must evaluate each case separately to determine whether concurrency exists and how many locations the physician may be responsible for during each case. Although CMS has standardized payment for medically directed cases, its guidelines do not apply to all payers. Medical direction is a common source of frustration and confusion for patients trying to interpret their bills.
Since payer contracts generally define the terms of payment for surgical anesthesia services, it is essential to segregate charges by category. In other words, any review of yield per billed unit must only include charges for surgical services. Such analysis is typically performed by payer, although the details of insurance payment policy can complicate the process. Medicare plans will determine an allowable based on the units billed. The actual payment, however, is limited to 80 percent of the allowable unless it is also reduced by a deductible. Medicaid plans, by contrast, have no patient copayment. For commercial plans, actual payments may be further compromised by coordination of benefits issues. Although the applicable requirements vary by location and payer mix, they are knowable, which is why our First Anesthesia software has continually evolved over time. The best way to enhance collections is to know exactly what they should be.
In many ways the ASA billing methodology provides a very useful tool for determining operating room utilization and provider productivity. Because the anesthesia billing database includes all the critical details of each case, such as when it started and stopped, how long it lasted, how many units were generated and what the potential financial value is, this information can be very useful for determining staffing and hospital subsidy requirements. Many clients have come to rely on this data to right-size their practice and to suggest OR management enhancements to administration.
Obstetric Anesthesia Charges
Obstetric anesthesia not only represents a separate line of business for most practices, which needs to be monitored and tracked separately, but the billing and payment rules are often arcane. While the basic base value plus time formula may apply to the calculation of charges, there are many special considerations and exceptions. Since some patients may labor for extended periods of time, it is not uncommon for charges to be calculated with a cap. The use of epidurals makes the management of a laboring patient's analgesia quite different than performing a surgical anesthetic. It must also be noted that concurrency rules do not apply since a single provider may be managing multiple patients concurrently.
There are three methods by which payers determine payment. They may recognize the base value and time units submitted and pay the claim as they would for a surgical anesthetic, but this has become the exception rather than the norm. Many plans will have their own rules for the determination of allowable time units. A commonly used policy allows 2 units for the setting of the epidural and one unit per hour of management. Epidurals that convert to Cesarean section always involve separate guidelines and are billed with add-on codes for the surgical procedure. Still other plans simply pay flat fee for deliveries. Obviously, it is essential to understand the specific payer rules to determine the appropriateness of the payment.
Another reason to segregate obstetric anesthesia activity is that most productivity calculations used for OR productivity do not apply to OB. The challenge becomes especially evident when the payer mix for OB is compared to that of the operating rooms. Medicare does not typically apply to OB activity, but Medicaid is often the predominant payer. Calculations of net yield per unit do not pertain to OB. Usually the best approach is to monitor yield per case.
Non-time-based Services
The third bucket of charges is the most difficult to monitor and evaluate without drilling down to the CPT code level. It includes all the services that are billed without time units. This includes invasive monitoring charges, arterial line, CVP, Swan-Ganz catheter and TEE; nerve blocks such as interscalene, femoral, sciatic and TAP blocks; ultrasonic guidance (USG) and follow-up; and rounding charges. What these have in common is that they are all paid from a fee schedule. Clients often ask how many units they get for a particular procedure, but that is the wrong question. Fee schedule payments are fixed dollar amounts. Each payer will have its own schedule.
While these services can generate additional revenue for a given case, specific rules often apply. A CVP will be assumed to be the introducer for the Swan-Ganz catheter, unless there is a separate stick. Nerve blocks can only be billed separately if they are not the mode of anesthesia and if the anesthesia provider attests on the medical record that the procedure was performed "at the surgeon's request." USG charges apply when the necessary documentation criteria have been met. Hospital visits and rounding charges must conform to the Evaluation and Management (E&M) guidelines found in the CPT manual.
As is always the case for incidental services, there is always a concern about potential abuse. The general rule is that these charges should represent the exception rather than the rule. Much time is spent in our standard in-service sessions explaining what constitutes appropriate usage.
Conclusion
It has been said that two factors have been particularly important to the advancements in modern medicine. They are antibiotics and anesthesia. While the role and potential value of anesthesia has evolved considerably over the years it has come with an inherent challenge. In their commitment to manage the entire perioperative continuum many practices are becoming over extended. Ultimately, every practice must be able to understand the economics of the specialty and use the information outlined above to make reasonable and effective management decisions. If you have any questions or would like to discuss further, please contact your account executive. You can also reach us at info@anesthesiallc.com.