Anesthesia Fees are calculated by taking the total case units (base, time and physical status) and multiplying by a practice’s unit rate. This rate is discretionary, and typically ranges between $125-$150. The purpose of this article is to examine two methodologies for care team pricing; that is, when both an anesthesiologist and CRNA are submitting charges for the same case.
Calculation of Anesthesia Fees
Anesthesia care teams typically involve an anesthesiologist medically directing between 1-4 anesthetist rooms. There is also a billing term called medical supervision, which represents the same care team providers in a 1:5+ concurrency ratio. The question at hand is, how should each clinician be priced on the claim(s) submitted to insurance?
Groups essentially have 2 options. (1) They can charge their standard anesthesia unit rate for both the MD and CRNA, knowing that the bulk of billed charges will be adjusted off as “contractual” (in-network) or amounts above the Qualified Payment Amount (out-of-network). Another option (2) is to charge half of your standard unit rate for the MD and CRNA, which will reduce your adjustments and result in a higher Gross Collection Rate percentage (GCR).
Comparison of Pricing Strategies: Example Scenario
To illustrate my point, let’s look at an example below, involving a 3-hour care team anesthetic for a spinal fusion with instrumentation.
ASA Code: 00670
Physical Status: ASA 2 (no additional units)
Base Units: 13
Time Units: 12
Total Units: 25
Sample Unit Rate of $150
Sample Managed Care Conversion Factor of $80 (Paid at 50% to MD and CRNA)
Since both pricing methodologies yield the same net payment, what’s the advantage of using one option over another? The first involves anesthesia KPIs. Don’t expect your biller to achieve industry standard GCR metrics, if you’re using option number one. Since your charges are doubled, your Gross Collection Rate is going to be artificially low. The second consideration is optics. If you’re concerned about patient sticker shock, perhaps option two is a more moderate approach.
Implications of The No Surprises Act
At the end of the day, your charge amount itself is of less importance than your true collection numbers. However, as long as your anesthesia unit rate is ≥ your highest managed care conversion factor, there may be an advantage to having “leaner” AR metrics. This could come into play with facility stipend negotiations or overtures to move to an employed model, where historical billing metrics are often considered. The most compelling reason to considering option 2 is the recent passage of The No Surprises Act.
Long gone are the days where groups appealed out-of-network claim payments, in an attempt to receive 100% of the billed charge. Since you’re now forced to accept the Qualified Payment Amount (median contract rate) for out-of-network claims, unless you’re willing to go through the arduous IDR process, what’s the point of artificially inflating your Accounts Receivable numbers? The ability to prevent confusion among group members on the true value of open AR seems to outweigh any advantage this option might have.
Final Considerations
If you’re considering option 2, make sure that your biller identifies any carrier that pays labor epidurals at a flat rate. For those cases, it’s easiest to bill the flat rate as your fee, regardless of time. This ensures that you’ll always be paid according to contract. Although Multiplan and other contracted repricing entities do pay based on a percentage of billed charges, they’re looking to move away from this model in the near future. Bottom line: If you’re contracted with all your facilities’ major payers, this should represent an insignificant percentage of your payer mix.
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.
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