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Summer 2010


Managed Care Participation - Yes or No?

Susan K. Firestone,
Administrator, Department of Anesthesiology NYU Langone Medical Center, New York, NY
Executive Board, MGMA Anesthetic Administration Assembly

As the sole anesthesia provider in a large academic medical center, we have been advised by School and Hospital administration that they would prefer we be participating with all managed care plans. Trying to honor that request with some of the managed care contracts offered to us provides us with an on going dilemma. How do we keep our bottom line in the black and continue to stay in the good graces of the administration?

Admittedly this is quite the balancing act and some days we tip to one side. We struggle with contracts that have been made with all other clinical departments, and we include clauses that providers will pre-certify all care, bill using CPT codes instead of ASA codes, provide proof of referral, and when providing “non-covered services,” adhere to policies such as the following:

In the event that an Enrollee requires or requests a service that is not covered or authorized by Plan, and such service is also not covered by the Program through which Enrollee is entitled to receive services, Provider or Personnel must:

  1. Inform the Enrollee that the Enrollee will be personally responsible for all fees related to the service and the estimated fee for the service. In the event that Provider or Personnel has not been given a list of Health Care Services by Plan and/or Provider or Personnel is uncertain as to whether a service is covered, Provider or Personnel shall contact Plan and obtain a coverage determination prior to advising an Enrollee as to coverage and liability for payment and prior to providing the service.
  2. Obtain an executed acknowledgment of financial responsibility from Enrollee or Enrollee’s legal representative prior to the time such services are provided.
  3. Obtain Plan’s express prior approval.
  4. Obtain patient signature authorization for non-covered services, maintain all medical records, etc.

Managed care companies that will not “fine tune” agreements that include clauses such as these place us in uncomfortable positions. So, how do we handle it when untenable clauses will not be deleted and rates are below what we know we are able to negotiate elsewhere? We do not participate. As such, we get many unhappy patients. We have provided letters to all the surgeons (600+) who provide care in our hospitals and requested they share the letter with their patients who are being scheduled for surgery. The letter is our attempt to advise the patient that they will be having surgery and that they should contact their insurance company to determine if we participate with them and to contact our billing company should they wish to get an idea of the cost. We have explained to the surgeons that this letter also helps their office staff and them as they often bear the brunt of patient complaints when an anesthesia bill is received. Additionally, we have placed the letter in the patient packet that the hospital gives out and have made the same letter available in Pre-Admission Testing. Despite all of these avenues we still receive patient complaints.

When the patient contacts our billing company to say that they were not aware they were going to have anesthesia, that they did not realize anesthesia would be a separate bill or that they had requested a participating anesthesiologist and did not get one and therefore should not be responsible for the co-payment, co-insurance, deductible or full bill, the patient is referred to me. Clearly this is high on my list of items I do not like about my job. With as much patience as possible I explain to the patient that we have attempted to let them know ahead of time about the anesthesia portion of their care and ask if they received the letter from the surgeon’s office. The majority of times the patient says no, they did not receive such a letter. We have since revised our policy and requested that the surgeon’s office have the patient sign the letter and keep a copy in their file. Now, when the patient says they didn’t know, we will contact the surgeon’s office to see if the signed copy of the letter is in their file.

Although we have tried to cover all bases, we have learned that many surgeons, for a multitude of reasons, do not wish to give the letter to their patients. In those instances we reaffirm that the letter was also in the packet they received from the hospital. We suggest to the patient that they contact their insurance company and explain that they went to a participating hospital and a participating surgeon and did not have the option of a participating anesthesiologist. They have adhered to everything they could have per their contract and since they could not go around the corner to a participating anesthesiologist and back to the hospital, they expect the insurer to cover the bill in full. I have received many phone calls back from patients advising that this has worked for them.

As with many issues in healthcare this is not a good system. Patients are caught in the middle at the worst possible time, when they are recuperating from surgery, and confusing medical bills fill their mailboxes.

Would I love to have this issue go away by accepting every contract put before me? Yes. However, I have a job to do and one of the primary functions of that job is to insure there are sufficient funds to cover anesthesiologists’ salaries, benefits, malpractice, etc. Without the funds to cover these costs there would be no anesthesiologists to render the care patients need.

Talk about being stuck between a rock and a hard place!


Susan K. Firestone is the administrator of anesthesiology at NYU Langone Medical Center in New York City. She has worked in private and academic anesthesia practices for the past 14 years and can be reached at Susan.Firestone@nyumc.org.