Anesthesia Managed Care Contracts

two people sitting at desk negotiating managed care contracts

Top 10 Billing Considerations When Negotiating ANESTHESIA MANAGED CARE CONTRACTS

Managed Care contracting takes patience, persistence and specialty-specific billing knowledge to perform effectively. Since most anesthesia practices receive the majority of their revenue from these arrangements, it’s important to have the right people involved in the process to optimize results. This article is intended to discuss some common contracting strategies, for your consideration.


Escalator Causes

Instead of having to renegotiate your unit rate every few years, escalator clauses are pre-determined increases that go into effect once your contract auto-renews. This guarantees that your rate remains competitive and eliminates the administrative burden of renegotiating. Groups that have contracts which auto-renew without escalators typically lose ground when their existing rate simply “rolls over”.


Time Rounding

First, anesthesia charting itself should always be exact, to the nearest minute. With that being said, you’ll need to determine how the plan that you’re negotiating with handles partial time units (those less than 15 minutes). For example, how will a 40-minute GI Endoscopy case be reimbursed? Will it be paid at 2, 2.7, or 3 time units?

Some contracts define a time unit as “each 15 minutes or any part thereof”, meaning that once you’re one minute into the next unit, you get credit for a full time unit.

Other contracts may require you to meet more than half of a time unit (8+ minutes), in order to get credit for a whole unit.

Either way, you’ll need to see if this issue is negotiable. If so, will the plan do the rounding calculation itself, or do they want your billing company to do this for them? All of these questions should be addressed with your contract rep, prior to agreeing to terms.


ASA vs. CMS Base Units

One commonly overlooked area is whether the insurance plan will use ASA or CMS base unit values to pay for your anesthesia services. Although you’d think they’d be the same, they’re not. CMS has 9 anesthesia codes that are valued at a lesser rate than the ASA, which can alter revenue projections and negatively impact collections. If negotiable, ask to be paid based on ASA unit values, not only for anesthesia services, but also for flat fee procedures.


OB Flat Rates

Negotiating a flat rate for all OB anesthesia services takes the guesswork out of expected payments and removes any “time in attendance” requirements, should they be enacted by an insurance plan at a later date.

For labors, a good starting point is to take your average time (typically around 6.5 hours or 26 units), add 5 base units, and come up with a number that both you and the payer can live with. Be sure that your billing system always submits this amount to the respective insurance plan, which will pay you pay the lesser of billed charge or contracted allowance. Anesthesia case rates for GI and Chronic Pain procedures are also commonly negotiated.


Locum Tenens Providers

It’s a good idea to add language concerning temporary providers, commonly referred to as “Locums”. If the insurance plan agrees to recognize this Medicare concept, it allows for practices to bill for temporary providers under the absentee provider’s name and number (when on leave), eliminating this onerous process of credentialing. Although the Medicare Locums rule applies to physician-to-physician coverage only, private payers may also allow for non-physician practitioners, such as CRNAs.


Concurrency Modifiers

For groups that employ both Anesthesiologists and CRNAs, pay close attention to how the insurance plan reimburses for concurrency modifiers -AA, -AD, -QK, -QX, and -QZ.

Essentially, your unit rates for personally performed cases (-AA) should be the same as your blended unit rate for medically directed cases (-QK, -QX). For cases where you are unable to meet medical direction criteria, having the option to bill as non-medically directed (-QZ) with no financial loss helps to mitigate potential billing risk. For medically supervised cases (greater than 5 concurrent rooms, it’s wise to see if insurance will pay an additional unit (4 instead of 3) when presence at induction is noted in box 19 of the CMS-1500 claim form.


Qualifying Circumstances

Examine your contract and fee schedule addendum to see if the payer recognizes the Qualifying Circumstances codes. Of these, Deliberate Hypotension (99135) and Emergency (99140) are the most important. These allow for additional payment to practices when there is a request from the surgeon to lower the patient’s blood pressure, or when delaying surgery would result in a potential threat to life or limb.


ASA Physical Status Modifiers

Review your contract to see if it mentions ASA Physical Status Modifiers, as many plans will pay an additional 1-3 units for ASA 3-ASA5, respectively. It’s recommended that all groups conduct internal meetings to discuss common underlying conditions and comorbidities, to ensure consistency in modifier application among providers.


Surgical Field Avoidance and Special Positioning

There’s no code that represents these unique clinical scenarios, so it’s extremely difficult to be paid extra for them without a carve out in your contract. If the payor agrees to increase the anesthesia base unit value to 5 when such circumstances arise, find out what modifier they want billed on the claim form, along with any other specifications. For insurance plans that are silent to these items, MSN recommends not billing extra for them, as the process simply increases your “days in AR” without yielding meaningful results.


Timely Filing, Appeal, and Payer Audit Deadlines

Lastly, you’ll want to see what the plan’s timely filing limit is for initial claims submission, along with how long you’ll have to file an appeal for denied line items. The minimum threshold for these timeframes should be 90 days. Also check to see how far back the payer can go to audit previously paid claims.

Hal Nelson, Vice President Anesthesiology Services


Hal Nelson, CANPC
has 30 years experience on both the payer and RCM side, with a focus in Anesthesia. He formerly worked as a senior claims approver at United Healthcare, as well as a compliance officer for multiple national billing companies. He has also taught the CPC coding curriculum collegiately in Atlanta. His broad based experience ensures that MSN clients will have a resource for documentation and billing issues. His past speaking engagements include ASA, MGMA, Dartmouth, and Johns Hopkins. 

This educational guide was prepared as a tool to provide education for documentation and coding. It is not intended to affect clinical treatment patterns. The material provided is for informational purposes only. Efforts have been made to ensure the information within this document was accurate on the date of distribution. Reimbursement policies vary from insurer to insurer and the policies of the same payer may vary within different U.S. regions. All policies should be verified to ensure compliance. CPT® codes, descriptions and other data are copyright of the American Medical Association (or such other date of publication of CPT®).All Rights Reserved. CPT® is a registered trademark of the American Medical Association. Proprietary and confidential document.  All rights reserved. No part of this document may be reproduced or used in any manner without the written permission of MSN Healthcare Solutions, LLC.