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Fall 2015

Anesthesia Informatics: The Future is Upon Us

Jody Locke, MA
Vice President of Anesthesia and Pain Management Services, ABC, Jackson, MI

Anesthesia practice management used to be relatively simple. Bill correctly, collect aggressively, and everyone is happy. It is true that Medicare and managed care made getting paid a little more challenging, but a good day’s work in most facilities generally resulted in enough revenue to cover the cost of the providers, and when it didn’t most hospitals have been willing to make up the difference with some level of stipend or revenue guarantee.

Most anesthesia providers would argue that for all the payment challenges created by diverse payer rules, fee for service medicine is still the preferred system. They like the fact that you get paid to provide services. What they don’t like are the increasing layers of complexity being imposed by efforts to measure quality and appropriateness of care. Especially concerning is the perception that what started as a trickle of inconvenient reporting requirements is gaining momentum to form a river of change that threatens to wash away any vestige of the once familiar mode of practice. Many older doctors are glad their time as anesthesiologists is almost up. They understand that it will be up to the next generation to find opportunity in what appears to be an irreconcilable sea of constraints and regulations.

The Good Old Days

Remember the days of 4-by-6-inch charge books that fit in the pocket of hospital greens? Anesthesia providers got quite good at documenting what they could bill to patients and their insurance. There was never a doubt about the surgical procedure, the start and end times of cases or any of those unusual patient or operative factors that might apply. Their charge tickets even included little check boxes for the other services they might be able to include such as invasive monitoring, transesophageal echocardiography, the administration of nerve blocks for post-operative pain management and ultrasonic guidance. There was a certain freedom that was consistent with the history and culture of the specialty. Each provider developed his or her own protocols and approaches and billed accordingly. Anesthesia has always prided itself on its autonomy. Such notions as peer review, provider profiling or performance assessment were just not a major part of the culture of the specialty. I can remember asking an anesthesiologist if anesthesia were art or science and he said yes!

For years anesthesia has operated in the shadows, an arcane world whose true value was really only understood by its practitioners. “Who is that masked man?” was the title of a Newsday feature article about Dr. Peter Walker, a Long Island anesthesiologist, in 1982. Those were the days when anesthesia was a free good for hospitals, meaning it did not cost the hospital anything to contract with a group for professional services. Then everything started to change. Payers started to question the cost of anesthesia care and hospitals started to get insistent requests for financial support from their contracted anesthesia providers. As the economics of care started to change customers and payers started asking questions. Ultimately the specialty ended up under the magnifying glass.

The evidence of this change has been both general and specific. In general terms the overall cost of American healthcare has become a topic of public debate and anesthesia is no exception. The impact of this transition has been especially evident in payer contract negotiations. But specifically with regard to the specialty, as each individual anesthesia practice made its case for some level of financial support to hospital administration more questions were being raised about what they were getting for what they were paying. This has proved to be a rude awakening for many anesthesia practices. The specialty was crossing over from a world in which providers got paid for what they billed to one in which they got paid for what they negotiated. 


So what? Was anything really changing in the life of the typical anesthesia provider? Yes and no. The first incursion was the Centers for Medicare and Medicaid Services (CMS’) Physician Quality Reporting System (PQRS). What a curious phenomenon! The intent was to implement some quality measures specific to anesthesia, yet the result was a set of process measures:

  • Administration of antibiotic within an hour before incision
  • Use of sterile technique for central venous catheter placements
  • Use of active temperature management for cases 60 minutes or longer

The original list of PQRS official measures started to grow and morph. Anesthesia providers did too well with the documentation of antibiotics so the administration of beta-blockers was added to the list and ultimately antibiotic prophylaxis came off. Each year there was a new iteration. What started as a small bonus evolved, as planned, into a potential penalty for non-compliance.

One might argue that the most curious of these is the recent PQRS “crosscutting” measure #47, which will probably be short-lived. Anesthesia providers who round on patients with continuous catheters—like doctors performing primary care visits in their offices—are expected to ask the patients if they have an advance care directive. They don’t have to look at it or know what is included. They simply need to document that they asked about it and what the answer was. While there is actually some quite compelling literature, justifying how such a measure applies to anesthesia is a little mystifying. Fortunately, most anesthesiologists will not be affected, but even so this is a preview of coming attractions.

Meaningful Use

Meaningful use was another curious experiment in physician behavior modification. Providers started receiving bonus payments to capture information that potentially could be used to populate a patient healthcare portal. Many of us wondered about such rich incentives for a program that appeared to have such limited potential benefits. Now the incentives to implement electronic medical records are considerably more complex.

Little by little, though, a pattern is emerging here. It is not hard to see where this is taking American medicine. The simple mechanics of fee-for-service medicine are giving way to an entirely new era of healthcare informatics. While a pen, an anesthesia record and a good billing agent used to be the essential keys to financial success, a whole new set of high-tech tools is becoming necessary to keep abreast of the rapidly changing face of healthcare informatics.

ICD -10

What should we make of the transition from ICD-9-CM to ICD- 10-CM diagnosis coding, which must be completed by October 1, 2015? Is it the big deal that many practices are worried about, or will it prove to be another of those transitions where the advanced hype outstripped the reality of implementation?

It is a big deal and its implementation will further justify the argument for a perioperative surgical home.

Essentially, an inconspicuous formalistic element of the claim process that never had anything to do with the justification of the anesthetic will become a critical piece of information for payment of the anesthesia claim. This is no small thing. Not only are the logic and structure of ICD-10 codes considerably more complex and intricate that the previous coding sequence, but now there is an expectation that everyone in the operating room who participates in the care of the patient should know why this patient is having this procedure at this point in time. Payers will actually have the ability to use the information on the anesthesia claim to validate the surgical claim, the consequences of which could dramatically impact denials and cash flow.

Figure 1 is a typical ICD-10 decision tree for colonoscopy services. It highlights the logic of the new sequence. While the typical anesthesia diagnosis for a polypectomy might have been limited to “polyp(s),” such a shorthand summary will not be sufficient after October 1st for a qualified ICD-10 coder to determine an appropriate and valid ICD-10 code, the absence of which would surely increase the risk that the claim would be denied by the payer. In order to avoid significant increases in denials and the resulting impact on cash flow, anesthesia providers are having to step up to the plate to master a new language and change how they document the diagnostic justification for the surgical procedure performed.

Table 1 presents a list of valid coding options for a typical colonoscopy. The anesthesia provider must provide sufficient detail in the diagnosis so that a qualified ICD-10 coder can make an appropriate determination. The real question, of course, is whether the endoscopist can make the determination.

Anyone who thinks the transition will go smoothly has not taken the time to look into the details. The logic and the level of detail required vary greatly from one surgical procedure to another. The good news is that about 25 common procedures account for 60 percent of all surgical cases so the list of frequently performed procedures with which anesthesiologists must become familiar is fairly short.

There is a curious irony at work here. If the intent of ICD-10 is to give the payer a means of validating the surgeon’s diagnosis, then it is a very imperfect method. How do payers think the anesthesia provider will confirm the details of the post-operative diagnosis if not by means of a post-operative time out? Actually, it is starting to appear as if many anesthesia providers are better prepared than their surgical colleagues, thanks in no small measure to the full court press put on by ABC to educate all its clients.

Coding Options for a ColonoscopyWhat could possibly justify such a disruption? Proponents such as the American Healthcare Information Management Association (AHIMA) argue the new codes could greatly improve our ability to:

  • Modernize and expand capacity to keep pace with changes in medical practice and healthcare delivery by providing higher quality information for measuring service quality, outcomes, safety and efficiency;
  • Enable better patient care through better understanding of the value of new procedures, improved disease management, and improved ability to study and understand patient outcomes;
  • Improve data capture and analytics of public health surveillance and reporting, national quality reporting, research, and data analysis, and provide detailed data to inform healthcare delivery and health policy decisions.

Like it or not, one of the greatest shortcomings of the current healthcare delivery system is its lack of coordination among providers, which is one of the underlying motivations for the implementation of electronic medical records (EMRs). Individual providers, and this is especially true of most anesthesia practices, tend to operate independently and in a vacuum. Such atomistic behavior and isolated charting practices are certainly not conducive to a detailed analysis of patterns of care that could result in process improvement.

The point is there is no turning back. Academicians, clinical researchers and politicians are insisting on answers to complex and detailed questions about the nature of healthcare utilization and cost. There is a broad-based commitment to finding ways to better manage quality and cost. Anesthesia providers have no choice but to embrace the logic of ICD- 10 and find ways to collaborate with their surgical colleagues in the post-operative determination of appropriate diagnoses.

While the implementation of ICD-10 will preoccupy most providers for the balance of 2015 and into 2016, there is yet another challenge looming ahead of us. CMS is committed to move from the cumbersome claims-based reporting of PQRS indicators to registry reporting. Again this is one of these ideas that make sense if you take a long-lens view, but it is being perceived as just one more complicating factor in the delivery of compassionate and quality healthcare.

Where and how will it all end? At what point does the provision of care become less relevant than the documentation of the care? It is almost Kafkaesque especially when we consider what is being contemplated as the next step in the unfolding saga of clinical documentation requirements: the Qualified Clinical Data Registry (QCDR) (and the Anesthesia Quality Institute’s [AQI] QCDR is arguably the most important such registry for anesthesia).


If you want a simple way of thinking about the QCDR try this: Make a list of all the various aspects of anesthesia care that could be measured and which might tell us something about the quality of the care provided. Put them all together and you have a rough approximation of the basic vision for the QCDR. The AQI’s proposed list for its QCDR currently includes 41 measures.

The proposed plan is that each practice will pick nine measures to report. The measures are grouped into the following domains of which three must be represented by the measures selected.

  1. Person and Caregiver-Centered Experience
  2. Patient Safety
  3. Communication and Care Coordination
  4. Community and Population Health
  5. Effective Clinical Care

The measures are further grouped into process and outcomes measures. “Measure #6: PACU Transfer of care: use of checklist” would represent a process measure. “Measure #11: Immediate perioperative cardiac arrest rate” would be considered an outcomes measure. Each practice must report at least two outcomes measures.

The good news is that the proposed plan allows for considerable flexibility in choosing measures that appear reasonable and relevant to the practice. The challenges will be the practical considerations associated with data capture and reporting. Those with EMRs will find such data capture relatively easy while those still using paper forms will have to modify their forms or add a new form.

The other aspect of QCDR reporting that cannot be overlooked is that this will represent a change in submission methodology. Currently PQRS measures are included on Medicare claims as CPT codes. The plan is to migrate to a registry-based reporting system whereby the measures are sent to CMS. This will impose yet another layer of connectivity on each practice. There are various registry options open to anesthesia practice but most will probably choose the AQI QCDR. It is too early to tell what the full impact of this transition will be but this project will no doubt occupy most practices next year. 

Challenge and Opportunity

It has always been one of the great ironies of anesthesia that despite the dazzling array of space-aged technology used in the operating room to manage patients safely through all manner of clinical obstacles and complications, anesthesia record-keeping still tends to be rather byzantine. Clearly, this is changing rapidly. The historical reporting tools simply cannot support the data requirements of tomorrow’s medicine.

In her book Confidence: How Winning Streaks and Losing Streaks Begin and End, Harvard Business School professor Rosabeth Moss Kanter identifies three qualities that consistently distinguish organizations that evoke confidence in their customers and employees. They are:

  • Accountability
  • Collaboration
  • Innovation

It is becoming quite clear that these are the very qualities that the American public is seeking in our current healthcare system. While the various developments described above may appear to physicians as part of a vast conspiracy arraying itself against organized medicine these are simply attempts, imperfect and inchoate as they are, to bring some order to the chaos and inconsistency of the present system. There needs to be a realignment of incentives such that the system works more as a whole rather than as a collection of individual practices.

So where, you may be wondering, is there any opportunity to profit or gain from such a complicated overlay of reporting requirements? Sometimes one player’s advantage comes at the expense of another’s failure. It is true that the focus of all these developments is analytics, but the ultimate objective is far more significant. Either your practice is making the necessary investment in adopting the necessary technology or it is not. Most would predict that those that are not will soon be left behind. This is one reason why we are seeing such consolidation of anesthesia practices; only those with access to significant capital resources can make the necessary investment in IT.

Maybe this is the wrong question. There is a paradigm shift taking place in medicine. We joke about the fact that physicians are not business people but the fact is this is not true: they tend to be true entrepreneurs focused on the success of their own little cottage industries. For far too long the consumer paid a premium for what economists refer to as supplier–induced demand. Only the doctor knew what was wrong with you and what it would take to make you better. This approach has resulted in the most expensive system on the planet with the least impressive results. Society wants consistent and predictable results for a reasonable cost. It wants a system that provides more accountability for outcomes in which specialists collaborate in the management of a patient’s care and to see evidence that all the impressive technology serves to make the system more effective and efficient, not just more expensive. It is a tall order, to be true, but it is what drives public policy which is where all these new regulations keep coming from.

Until providers start focusing on ways to make the entire system more cost-effective instead of on their share of the healthcare pie, they will find themselves swimming upstream in increasingly perilous waters. Fee for service medicine is destined to be replaced by a far more complicated system of risk-sharing. What we have seen thus far is just a preview of coming attractions. The public knows healthcare can be much better, and, frankly, most anesthesiologists believe that too. Those who find ways to make it so will be the real heroes of the next generation.

Jody Locke, MA serves as Vice President of Anesthesia and Pain Practice Management for ABC. Mr. Locke is responsible for the scope and focus of services provided to ABC’s largest clients. He is also responsible for oversight and management of the company’s pain management billing team. He will be a key executive contact for the group should it enter into a contract for services with ABC. Mr. Locke can be reached at