Anesthesia Billing & Reimbursement - PowerPoint Presentation

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Anesthesia Billing & Reimbursement

Sho Me da Money

Jerry Stonemetz MD

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Billing Basics

There are many clinical settings within anesthesia that have unique billing concerns.OB

Critical CarePain ManagementPECHere we will concentrate on billing for anesthesia for surgical procedures.

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Billing Basics

Every surgical procedure generates three feesFacility Fee: charged by the hospital/surgical center for the OR and support services

Surgeon’s Professional FeeAnesthesiologists Professional Fee

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Billing Basics

The each procedure has a certain value in units based on:Surgical Procedure (Base Units)

Length of Procedure (Time Units)Special Circumstances, Procedures or Techniques (Qualifying Circumstances Units)BU + TU + QCU = Total Units

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Billing Basics

Our fee is then calculated by:Total Units x Conversion Factor = $$$

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Base Units

Based on CPT (Current Procedural Terminology) codes.Surgical versus Anesthesia CPT codes

CMS (Center for Medicare Services) defines the relative value units (RVUs) for each Anesthesia CPT code with input from the ASA.Base units includes the preop assessment and preparation time.

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Base Units

Procedure

Base Units

Cystoscopy/ Breast Bx

3

ORIF fracture repair

4

Bowel Resection

6

Lap Cholecystectomy

7

Cervical Spine Fusion

11

Craniotomies

16

CABG on bypass

20

CABG off bypass

25

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Time Units

Anesthesia time starts when the anesthesia practitioner begins to prepare the patient for anesthesia services in the operating room or the equivalent area and ends when the patient may be placed safely under postoperative care.

This excludes time for preoperative assessment and preop, placement of lines or blocks.May include transport if documented.

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Time Units

One time unit is equal to 15 mintuesThe CMS now effectively treats time units as a continuous variable, thus180 min = 12 units

185 min = 12.33 unitsThe time factor means each anesthetic is unique, making anesthesia billing the most complex in medicine.

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Qualifying Circumstance/Modifiers

Allows units for provision of anesthesia services under particularly difficult circumstances that necessitate the skills of a physician beyond those usually required.

Emergencies, deliberate hypotension, hypothermia.Allows units for certain specific proceduresArterial lines, central lines, PA catheters, regional blocks (with GA), TEE

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Conversion Factor

Unless reimbursement is non-par, this is essentially determined by the payer.Managed care organizations negotiate discounted conversion factors with participating providers. CMS is usually among the lowest.

Reimbursement for Medical Assistance is lower still.Indigent typically = No Pay.

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Conversion Factor

According to the ASA 2016 Survey of Annual Fees

The national mean conversion factor among commercial payers is $71.02/unit ($71.92/unit in 2015)

Stead et al. Commercial Fees Paid for Anesthesia Services - 2016. ASA

Newsletter 2016; 80 (10)

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Conversion Factor

Highest CF in survey $182/unit25th

percentile in survey $32/unitCMS pays $21.99/unit (national average)Medicaid – less than $5/unit

Blended Unit Rate – Total revenue/total units$100,000/2000 units = $50 per unit

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Anesthesia Professional Fees

Incisional Hernia for 120 minutes with epidural for postop pain management:

BU (6) + TU (8) + QC (8) = 22 units Conversion Factor = $70/unitCharges = 22 units x $70/unit = $1540

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Anesthesia Professional Fees

Incisional Hernia (22 units) - $1540 chargeBest Managed Care Contract ($70/unit) = $1540CareFirst ($40/unit) = $880

Medicare ($19/unit) = $418Medical Assistance = $45Blended Unit Value ($40/unit) = $880

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Corporate Compliance Program

Written Policies and Procedures

Assign a Compliance OfficerConduct Effective Training and EducationDevelop Effective Lines of Communication

Auditing and MonitoringEnforce Standards through Publicized GuidelinesRespond to Detected Offenses

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Stonemetz Tip!

Tip 1: When evaluating practices, ask what is the blended unit value. Each group should know this value

Be very cautious accepting position unless you are reimbursed according to the blended unit value.

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Distribution of Revenue

How group revenue will be distributed to individual physicians can either be a straight salary or a productivity based compensation model.Straight salary is often offered to new associates, while productivity based compensation is reserved for partners.

Productivity based compensation models lie on a continuum between two extremes

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Hunter Model

You eat what you kill!

Your income is based strictly on the revenue from the cases you do.

ProsStrong incentive to increase efficiency and take on more challenging cases. Associated with high productivity.

Cons

Makes time spent on administrative duties, scholarly activities and overnight call relatively costly.

The risk of patient to patient payer variability is taken on by individual physicians. This can be particularly costly for new and relatively naïve associates.

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Time-Based Compensation

Compensation is based on the number of hours or days worked.ProsEasy to incorporate additional compensation for call, overtime, administrative time and scholarly work.

Spreads inter-patient payer risk.ConsLess incentive for challenging cases and high efficiency. Associated with lower productivity.

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Unit Variability

OR

Surgery

Anes time

Turn over

# of

cases

Base/case (units)

Time/ case (units)

tASA billed (units)

1

Lap chole

(fast surgeon)

1 hr

20 min

7

7(49)

4(28)

77

2

Lap chole

(slow surgeon)

2 hr

20 min

4

7(28)

8(32)

60

3

Lap Chole

(golf after noon)

2 hr

20 min

2

7(14)

8(16)

30

4

CABG

2.5 hr

30 min

3

20(60)

10(30)

90

5

L & D epidural

6 hr

Na

3

5(15)

4(12)

27

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Side by Side Comparison

7 Lap CholesStart at 07:00 / End by 16:00.(7 u + 4 u)7 casesGenerate 77 units

Bill out $3080 that day. 2 AAAStart at 07:00 / End at 18:00.

(12 u + 20 u)2 casesGenerate 64 unitsBill out $2560 that day (finish 2 hours later).

Assume a blended unit value of $40/unit

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Unit Variability

Confounding Factors – we have no control over:Surgical duration (faster & shorter cases more productive).Type of surgery (base units).

Scheduling (OR ends at noon)*OB anesthesia – very unique billing environment (typically not a money maker).

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Stonemetz Tip!

Tip 1: When evaluating practices, ask what is the blended unit value.

Tip 2: Every system will be gamed.Make certain there is not a situation where you will be taken advantage of by the savvy partners. Look for practices that rewards productivity if you want to work hard.

Make certain there is a benefit to doing the ‘big cases’. Do they reimburse for QC units?

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Looking for a job

Location! Location! Location!Check out the Payer Mix (demographics).

Is very expensive to move after the first year (buy-in).What if there are no openings at the group you want to join? Do not use an agent to find a position.Every occupation becomes a job; Find your passion.

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Type of Practice

All MD practiceLower income

Potentially higher malpractice riskAll CRNA practiceHigh call percentagePutting out fires

Hybrid MD/CRNAHighest income potentialLower call percentage

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Stonemetz Tip

Tip 1: When evaluating practices, ask what is the blended unit value.

Tip 2: Every system will be gamed.Tip 3: Make sure you like your partners.A corporation is a marriage. Divorce is always ugly.The worse investment you will ever make is to choose the wrong spouse or wrong partners.

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Contract Negotiation

Do not hire an attorney!Look for:

Group needs to purchase your malpractice tail regardless of reason you leave.Watch out for non-competes.Do your negotiations on the Addendum (Attachment), not the body of the contract.

Save the attorney for the partnership agreement.

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Happy Hunting!!