When the TEFRA regulations for Medical Direction were codified in 1982, Propofol hadn’t yet been approved by the FDA (this occurred 7 years later). Like many antiquated Medicare regulations, clinical advances outpaced governmental guidance for billing purposes.
Fast forward to 2026, and Propofol is now the anesthetic agent of choice for the GI service line, as well as others. Whether you call it general anesthesia or total intravenous anesthesia (TIVA), one thing’s for certain; it’s not monitored anesthesia care (MAC), where the patient remains conscious and able to respond purposefully throughout the duration of the case.
When we study the CMS medical direction guidelines for anesthesiologists below, requirement #3 stands out.
- Perform a pre-anesthesia examination and evaluation.
- Prescribe the anesthesia plan.
- Personally participate in the most demanding procedures, including induction and emergence.
- Ensure any procedures not performed by the anesthesiologist are performed by a qualified CRNA, AA, or resident.
- Monitor the course of anesthesia administration at frequent intervals (once per hour).
- Remain physically present and available for immediate diagnosis and treatment of emergencies.
- Provide indicated post-anesthesia care, such as checking on patients in the recovery room.
The spirit of the TEFRA regs was to require the anesthesiologist’s physical presence during some portion of both the induction and emergence continuums. “But what if we call it a MAC – do these requirements still apply?” In my opinion, the answer is and has always been ‘yes.’ Labeling Propofol GI cases as MAC anesthetics is not only incorrect, but it can also expose medically directing practices to serious billing compliance risk, if they forego the presence at induction requirement.
Why is this information pertinent now? Because private insurance companies like Cigna, United Healthcare, and BCBS (state-specific) now pay a reduced rate of 85% for non-medical-direction (-QZ billing). In other words, meeting or not meeting the medical direction charting requirements is no longer revenue neutral for these payors, whom we fully expect to begin launching post-payment audits of claims billed as medical direction.
As far as case law goes, there is a 2016 qui tam case that may provide some insight: Donegan v. Anesthesia Associates of Kansa City, PC. In this particular case, the directing anesthesiologist’s presence at emergence (and not induction) was questioned by the relator. Fortunately for the group, their Professional Practice Committee had the foresight to define the continuum of emergence in its 2001 Corporate Compliance Plan, to include the recovery room. The takeaway here is that the anesthesiologist’s physical presence was still required during emergence, just not in the OR.
If we look at induction using the same lens, the expectation is that the directing anesthesiologist be physically present during some portion of the induction continuum; most likely during the administration of the general anesthetic agent used – Propofol. Keep in mind that the CMS waiver on presence at induction and emergence was intended to apply to true MAC cases only, which don’t have a definable period of such, since the patient is conscious throughout the anesthetic.
When the TEFRA regs were published in ’82, Versed was the anesthetic agent of choice for the GI endoscopy service line. As such, presence at induction and emergence was not required for these medically directed MAC cases. However, the introduction of Propofol created a new wrinkle, with loss of consciousness and the administration of an intravenous general anesthetic.
My recommendation for practices is to be proactive on this front. If you don’t currently have a corporate compliance plan, start developing one for 2026. Incorporate a policy that defines your practice’s interpretation of the induction and emergence continuums and specify when your anesthesiologists must be physically present. What I don’t recommend is simply taking the philosophical stance that presence at induction/emergence is not required for TIVA cases. Doing so without an internal compliance policy and/or clarification from your carriers is fraught with risk.
Strengthen Your Anesthesia Compliance Strategy
If your organization is evaluating its approach to Propofol cases, medical direction requirements, or broader anesthesia compliance strategy, our team is here to help. We work closely with anesthesia groups to assess documentation practices, align workflows with current payer expectations, and reduce audit exposure without disrupting clinical operations. Contact us to learn how we can support your team with tailored guidance and actionable solutions.
Hal has 30+ years of experience on both the payor 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 anesthesia billing companies. His broad-based experience ensures that MSN clients have a resource for documentation and billing issues. His past speaking engagements include ASA, MGMA, Dartmouth, and Johns Hopkins.
