Anesthesiologists are wondering how to respond to questions about an article that appeared in the New York Times on September 20, 2014, reporting on a $117,000 bill received by a spinal fusion patient from a neurosurgeon who had assisted in his procedure. We cannot come up with a better justification for such a charge than can anyone else.  That includes the presidents of the American Association of Neurological Surgeons and of the Congress of Neurological Surgeons, who co-signed a letter to the editor of the Times declaring themselves “outraged” and the “practice of ‘surprise’ medical bills … indefensible.”  The orthopedic surgeon in the case was paid $6,200, or less than five percent of his $133,000 bill.  The anesthesiologist charged $4,300 and was presumably paid a smaller amount.  The difference is that the neurosurgeon did not participate in the patient’s health plan.  And the health plan eventually sent him a check for the full amount. Accounts...

Anesthesia Business Consultants (ABC) will be attending The ANESTHESIOLOGY™ 2014 annual meeting in New Orleans, Louisiana, held this weekend October 11-15 at the Ernest N. Morial Convention Center.This five-day event includes special lectures, hands-on workshops and late-breaking panel discussion and attracts upwards of 15,000 attendees from around the world seeking to learn the latest science and technology about the specialty of anesthesiology.ABC will be demonstrating its Big Data platform, F1RSTAnalytics™.  F1RSTAnalytics provides insight at your fingertips.  We all know that data helps us make better, more-educated decisions. But collecting large amounts of data is ineffective without the proper tools to display those insights. Without understanding the context of a specific metric, it can be easily misunderstood and misrepresented. Physicians and administrators alike require a smooth transition from the clinical, administrative and operational data sets to better understand the true messages that the data is trying to tell.Make the Data Work for...

On October 1, 2014, the start of the fiscal year for hospitals, Medicare’s maximum penalties for “preventable” readmissions increased from two percent to three percent.  At the same time, CMS added three new conditions, including two frequently performed orthopedic procedures, to the list of conditions for which readmissions are deemed preventable, which now consists of the following: heart failure acute myocardial infarction (AMI) pneumonia chronic obstructive pulmonary disease (COPD) knee arthroplasty hip arthroplasty Authorized by the Patient Protection and Affordable Care Act, the Hospital Readmissions Reduction Program (HRRP) began in October 2012 (FY 2013) with a maximum penalty of one percent of total Medicare payment.  Historically, about one in five Medicare patients discharged from a hospital is readmitted within 30 days.  Readmission rates vary considerably by hospital and by geographic area after controlling for case mix and severity of illness.  According to a Health Affairs Health Policy Brief, studies have estimated the...

Analogies make us stop and think. Sonya Pease, MD, chief medical officer of TeamHealth, invites us to consider that customers of service industries such as restaurants reward outcomes rather than work processes in this Communiqué’s lead article, Working for Tips…. Much as patron satisfaction is key to success in the restaurant business, patient satisfaction is an outcome that physician compensation is going to reflect, whether we believe that patients are appropriate judges of quality medical care or not. Patients’ perception of the caliber of the care they receive is determined in part by their doctors’ communication skills. Implementing multimodal pain and post-operative nausea and vomiting programs are very important, and so are the clinician’s self-introduction and expressed concern for the patient’s comfort. Think about the waiter’s keeping customers informed about delays and asking whether they need anything. These are skill sets most physicians “didn’t learn in residency but it is imperative we...

An article in the September 21 New York Times Sunday Review asked the question Can a Computer Replace Your Doctor?  The author, Elisabeth Rosenthal (who identified herself as a “former physician”)  opened with the following:I shivered a bit when I heard Dr. Vivek Wadhwa say he would rather have an artificial-intelligence doctor than a human one.  “I would trust an A.I. over a doctor any day,” he proclaimed at a recent health innovation conference in San Francisco, noting that artificial intelligence provided “perfect knowledge.” When asked to vote, probably a third of those in attendance agreed.Artificial intelligence is obviously far more than data collection and management.  Data collection and reporting is where much health care technology is today, however.  Rosenthal noted devices that could turn an iPhone into an otoscope, blood alcohol measurement gadgets, home cholesterol test kits, cardiac trackers worn for more than a few days, devices that record sympathetic...

Anesthesiologists routinely perform a “pre-operative” assessment of a patient scheduled to undergo an invasive procedure that requires anesthesia services. This assessment is a standard of care that has benefits that are guided by the provider’s intention to limit surprises. No physician wants to be in the middle of a complex surgical case and first find out about an underlying chronic condition that has deleterious effects on the patient. It is our observation that more anesthesia groups than ever are about to undergo the business equivalent of an invasive procedure. Shouldn’t you apply the same standard to your own practice, and find out how your group will look to a possible partner, investor or employer before your group is in the middle of negotiations with another entity? The radically changing healthcare world will confront all hospital-based anesthesia group practices with complex and difficult choices. Do you stay the course and try to...

It is unusual to open a health policy periodical without seeing the words “Accountable Care Organization,” or, more frequently, “ACO.”  Are these entities as successful as they are visible?According to recent estimates, there are some 500 ACOs operating in the US today.  More than 360 Medicare ACOs have been established, serving over 5.6 million Medicare beneficiaries, since passage of the Affordable Care Act in March 2010.  There are two distinct categories of Medicare ACO:  the Pioneer Model ACOs, which are on a faster track toward value- and population-based payment, with higher levels of shared savings and risk, and the ACOs participating in the Medicare Shared Savings Program (MSSP).  Together, the ACOs reduced Medicare spending by approximately $817 million in 2013.The 23 ACOs that participated in the Pioneer program in 2013, and for which CMS has just released performance data, generated estimated savings of $96 million and qualified for shared savings of...

[Author’s note: This article is based on a piece I wrote for Anesthesiology News.] “What’s our anesthesia group worth?” I hear that question on a frequent basis. In fact, you’re probably thinking it right now. There are a lot of people out there who are happy to fool you with their answer. They might say something like, “well, your practice is worth X times pro forma earnings before income tax depreciation and amortization, otherwise known as ‘EBITDA.’” Or, they might even have a super-complicated formula, sort of like the ones economists use to make you think that they are scientists. But that’s all BS. The real answer is that your practice is worth exactly what an actual buyer will actually pay you to acquire your practice. So, if buyer A will actually pay you $30,000,000 and buyer B will actually pay you $40,000,000, then the practice is worth $40,000,000. That’s the case...

Many medical services and procedures can be performed either on their own or in conjunction with another service or procedure.  The National Correct Coding Initiative (CCI) identifies pairs of services that a physician cannot normally report for the same patient on the same date of service.  The two services may be mutually exclusive, as when one is performed only on female patients and the other only on males.  Most commonly, the reason for the linkage—the CCI “edit” that bundles the two services and prevents separate payment—is that the second service in the pair is a component of the more extensive service performed by the same physician for the same patient at the same encounter.  An example familiar to anesthesiologists is the bundling of postoperative pain management procedures with an anesthetic delivered through the same catheter.Under appropriate circumstances, the physician may bill for two services in a code pair and include a...

  Management Service Organizations (MSOs) will have an increasingly important role in anesthesia practices. What today are cooperatives of independent anesthesia groups may morph into something quite different in the future. The original goal of an MSO was to be a cooperative of local independent anesthesia services that reduced costs and gained management expertise for its members. The desired functions and advantages were similar to those offered by cooperatives in other industries. Traditional and attainable goals to be sure, but then reality got involved. Here’s one version of reality. Some anesthesia groups and anesthesia professionals are concerned (read terrified) that the “sharks” of the anesthesia business world, anesthesia management companies (AMCs) and private equity investors (PEIs), will devour local practices. The facts behind this assumed reality are quite different than imagined; more people die each year from being crushed by vending machines than from shark bites. Here’s another reality. Many more...

"Properly structured, arrangements that compensate physicians for achieving hospital cost savings can serve legitimate business and medical purposes. Specifically, properly structured arrangements may increase efficiency and reduce waste, thereby potentially increasing a hospital’s profitability."  (Office of the Inspector General, Advisory Opinion No. 07-22, December 28, 2007.) As hospitals come to expect more and more from their anesthesia providers, many groups are uncovering ways in which to add value to their hospital relationships while maintaining their own margins.  One common approach is to explore gainsharing arrangements, a form of pay-for-performance in which anesthesia groups work to enhance quality or to reduce hospital costs and are compensated with a portion of the affected revenues. Since gainsharing arrangements began surfacing in the hospital context, there have been questions about their legality.  The federal anti-kickback statute, Stark law and Civil Monetary Penalties (CMP) statute could all be implicated.  As the OIG warned, “like any payment...

For as long as anesthesia providers can remember, the payment for post-operative pain procedures has been bundled into the surgeon’s global fee. The exception to this general rule arises when the surgeon requests the anesthesiologist to administer the service. Although the National Correct Coding Initiative (NCCI) Coding Policy Manual for Medicare Services (Manual) provision has not changed, Medicare contractors’ payment for post-operative pain procedures is beginning to shift and the anesthesia community must be aware of this shift and ensure compliance with The Center for Medicare and Medicaid Services’ (CMS’) and its contractors’ documentation requirements. The CMS annually releases the NCCI Manual, which was developed to “promote national correct coding methodologies … to control improper coding leading to inappropriate payment in Part B claims.” The Manual includes a section specifically pertaining to billing for anesthesia providers furnishing post-operative pain procedures. This section provides that post-operative pain services are included in the...

HHS’ Office for Civil Rights (OCR) is about to begin a new round of audits to determine the extent of providers’ and their business associates’ compliance with the HIPAA privacy, security and breach notification rules. OCR conducted the Phase I “pilot” audits mandated by the HITECH Act in 2011 and 2012.  Among the findings, from audits of 115 covered entities (CEs), among them, 61 providers, were the following: Only 11 percent of the CEs audited had no negative observations; The smallest CEs had the greatest difficulties in complying with all three of the HIPAA Standards; More than 60 percent of the findings or observations were Security Standard violations, and 58 of 59 audited health care provider CEs had at least one Security Standard finding or observation even though the Security Standards represented only 28 percent of the total audit items; More than 39 percent of the findings and observations related to...

For all the time most anesthesiologists spend in the operating room and the Post-anesthesia Care Unit (PACU) there is a curious firewall when it comes to the Intensive Care Unit (ICU). Most anesthesia practices are actively pursuing ways to generate additional revenue and further strengthen their relationship to administration and yet rarely do such considerations include any discussion of the ICU. As a large national billing company with hundreds of clients across the country, we only bill for a few clients that cover the ICU. One might therefore ask, “Are these practices visionaries of a future reality or isolated exceptions?” What is the opportunity and what would be involved in exploring it? Why are the very physicians who promote themselves as ideal managers of the entire perioperative continuum not pursuing a more active role in the ICU? It would appear to be a logical and integral part of the Perioperative Surgical...

The “two-midnight rule” was established by the 2014 Medicare inpatient prospective payment rule.  According to the policy, inpatient admissions extending through at least two midnights generally qualify for Medicare Part A payments.  Surgical procedures, diagnostic tests and other services are presumptively appropriate for inpatient hospital admission and payment when (1) the physician “reasonably” expects the patient to require a stay that crosses at least two midnights and (2) admits the patient to the hospital based upon that expectation.  Inpatient stays lasting fewer than two midnights are considered and should be billed as outpatient or observation services under Medicare Part B.CMS introduced the policy to monitor Medicare reimbursement for short inpatient stays and to reduce the number of inpatient admissions deemed non-medically necessary.  Aggressive auditing by the Recovery Audit Contractors (the RACs) had recovered more than $2 billion a year from hospitals over the two fiscal years prior to June 2013, according...

Reimbursement pressures for anesthesia practices are continuing to escalate due to fluctuations in our healthcare environment. Safeguarding collections is critical and it has become more important than ever to collect every dollar without leaving anything on the table. Good clinical documentation supports accurate coding and the impending ICD-10 implementation increases that significance. For anesthesia providers to facilitate the reduction of coding errors, it is imperative that they have a sound understanding regarding the relationship between good clinical anesthesia documentation and accurate coding. Incomplete documentation requires a return visit to the provider or a review of the operative report which in turn delays the processing and payment of a claim. Delays in claims processing decreases revenue. Procedure Undercoding Lack of detail by the anesthesia provider concerning the procedure description is one of the top reasons for undercoding. Detail is vital for accurate coding and optimal reimbursement. Opening the lines of communication between...

One of our readers asked us recently what his group needed to report under the Physician Payments Sunshine Act.  The answer:  nothing.  The Sunshine Act, which is part of the Affordable Care Act, requires pharmaceutical and medical device manufacturers to report payments and other items of value worth more than $10, as well as certain ownership interests held by physicians and immediate family members.  (See our Alert of August 5, 2013, Drug Manufacturers’ Payments to Anesthesiologists Are Now Reportable under the Sunshine Act.)  It does not impose any tasks on physicians. Prudent physicians will want to take advantage of the option to verify the information that will be posted under their name in the Open Payments System before publication, though.  Time is running.  If you log on to the American Medical Association website (www.ama-assn.org), the first thing you will see is this message.   Detailed information about how to complete each part...

Anesthesiologists are uniquely qualified to coordinate the care of patients in the intensive care unit because of their extensive training in clinical physiology/pharmacology and resuscitation. Some anesthesiologists pursue advanced fellowship training to subspecialize in critical care medicine in both adult and pediatric hospitals. In the intensive care unit, they direct the complete medical care for the sickest patients. The role of the anesthesiologist in this setting includes the provision of medical assessment and diagnosis, respiratory and cardiovascular support and infection control. Clinical competence and expertise in meeting the needs of a critically ill or injured patient unfortunately does not automatically transfer to payer’s documentation and coding requirements. The following article reviews the critical care services documentation, coding and billing guidelines. * * * The American Medical Association’s Current Procedural Terminology® (CPT) Codebook defines critical care as the direct delivery by a physician(s) or other qualified health care professional of medical care...

We recently had the opportunity to talk with one of our favorite surgeons about what she wants from her anesthesiologist or care team.  Some of the items on the list below will be very familiar—so much so that it’s surprising that the issue still comes up.  Others are specific to our surgeon’s specialty, otolaryngology, they may sensitize readers to analogous concerns affecting other specialties. Classic Bêtes Noires I would like fast turn-over times; my time is valuable. Anesthesiologists’ time is valuable too, and they like fast turn-overs as much as do the surgeons.  This is an area where performance metrics can be particularly helpful.  If turn-overs take longer than national or local benchmarks, there is a wealth of information on how a facility might improve (e.g., numerous publications by Franklin Dexter, MD, PhD including Economics of Reducing Turnover Times, 2014; Laura Dyrda, 8 Steps to Quicker Turnover Time in ASCs, Beckers...

According to Socrates, “Education is the kindling of a flame, not the filling of a vessel.” A thirst for knowledge by one who is new to the field can be just as important to an employer as an employee with years of experience—even more so if the experienced employee believes they know all there is to know. This is especially true about anesthesia billing—just when you think you have the rules down pat, something changes. Staying on top of your game requires constant learning, and the vessel will never be full. Knowledge is power and, literally, at our fingertips. Much of what one seeks to find can be accessed through search engines. Now it seems the hardest part of learning is an understanding of how to whittle down the vast amounts of data into just the information one needs. Qualifying circumstances, including field avoidance and special positioning, are unique to anesthesia...