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Winter 2009


Group Considerations in Anesthesiologists' Pain Practices

Paul Kennelly
Anesthesiologists Associated, Inc. (AAI)

In a time of reduced reimbursement and decreasing OR activity, many anesthesia groups look for alternative revenue streams. They may entertain the idea of establishing a pain practice. As with all practice decisions, however, there are considerations and consequences to weigh. A pain service is not a panacea to cure the financial or staffing ills of an anesthesia practice and the decision to enter the market should not be taken lightly.

It is important to understand the difference between an anesthesia practice and a pain practice. Anesthesia is a hospital-based service, while a pain practice is considered office-based. A pain practice depends on steady referral business and physicians providing the service must be willing to cultivate and develop these referral sources (see Ruth Morton’s article “Building a Successful Pain Practice” in this issue of the Communiqué). It is here where many anesthesia groups face their first test. A service approach to both patient and referring physician is critical and failure to cultivate one can prove fatal. Often, anesthesia groups have physicians who have an interest in pain management but who are not prepared to devote their entire energy to the effort. Additionally, if a group’s culture is to view pain services as an adjunct to its core anesthesia business and not as a stand-alone practice which requires adequate resources, the pain service is destined to struggle. Unless the group decides they are “all in” they may find that this part-time approach yields more problems than expected. If your group is considering a part-time approach, make certain you understand the expectations of the marketplace and the ramifications that a part-time approach can have for your practice.

Operational matters such as call and vacation coverage should be discussed. How will the group respond to after-hour calls if the pain physician is unavailable and how will it cover the pain practice during vacations and other absences? Will the practice cancel the clinic when the pain physician is unavailable, on vacation, or caught in an OR case – and run the risks of damaging referral relationships and inconveniencing patients? Referral physicians and patients expect smooth access to coverage. Inconsistent service and a high hassle factor will shift their business to other providers.

Staffing may be an important factor for anesthesia practices when deciding on a pain practice if OR volume is low. Using the pain service as a safety valve to cover the operating room can be a short-term solution. Note the following caveats about such an approach. While it takes someone out of the OR rotation, groups may forget to plan for what happens when OR volume increases or pain referrals drop off. How will the practice respond when the pain physician wants to return to the OR pool on a full-time basis? How quickly can he or she come back in to the OR pool, and what is the impact on other pain providers when someone drops out of the pain service? In its most general terms a practice cannot allow the pain providers to simply roll in or out of the OR rotation based on the current economics of the group. Practices must have a clear understanding of how a clinician enters or exits the pain practice. The group should also address how the pain service fits into the OR call schedule. If the pain specialists are covering pain call they may balk at carrying an equal share of the anesthesia call. That means an increased call burden for the other members of the group.

Outline and agree clearly how the pain physicians will share in the group’s revenues and costs. Carving pain into its own compensation pool makes sense but decide up front how items such as overhead, call stipends, billing fees, and other practice expenses will be allocated to the pain pool.

Pain practice is on the radar for the payer community. It is very important to understand each of your payers’ policies and to investigate if the payer will negotiate a stand-alone pain contract. Review the agreement carefully to understand key issues such as pre-authorization requirements. In states that include pain medicine services in CRNAs’ scope of practice, some groups employing CRNAs may believe that the profit margin will be higher if they rely on lower cost providers to deliver pain care. This may be a red herring; some health plans may adjust their fee schedules to account for this difference. Be certain to evaluate the compensation exhibit carefully.

While a pain service makes sense for many groups, it is not for everyone. Give careful consideration when considering pain management as part of your practice ensuring you understand the internal dynamics and culture of your Group, the economics of your marketplace, who your competitors will be, and health plan reimbursement policies. Failure to address these issues may result in larger and more complex internal concerns for the practice. If the group is serious about developing a pain service, consider the use of a consultant conversant on group governance, pain billing, compliance, and market analysis to help with the process.