Reimbursement Issues in Anesthesiology: Part 2 of our Revenue Cycle Health for Hospitals Series

In Part 2 of our series on Revenue Cycle Health for Hospital Anesthesiology Departments we’ll explore issues with revenue leakage on anesthesia services.

As discussed in Part 1 of our Revenue Cycle Health for Hospital Anesthesiology Departments series, most hospitals are now using some type of Electronic Health Record (EHR) and while those EHRs are great for capturing patient information and charting, we have found many deficiencies when it comes to billing for anesthesia services. Below we will breakdown the areas where revenue leakage typically occurs and where reimbursement can be improved.

Anesthesia Coding

The first area where we typically find reimbursement issues in anesthesiology is with the anesthesia coding itself. When we engage with hospitals for a potential partnership, a review of their current anesthesia billing often reveals a lack of trained AAPC certified anesthesia coders. Seasoned anesthesia coders and billers will know what procedures have ancillary anesthesia services to be billed and, if those procedures are not documented, to go back to the provider for clarification (i.e. common surgeries that require post-operative pain management or vascular line placements for additional monitoring during complex surgeries).

Modifiers are another area that are problematic. There are informational modifiers as well as pricing modifiers used in anesthesia billing. These modifiers eliminate or prevent unbundling or duplicate billing. Anesthesia coders and billers are trained to review documentation to select appropriate modifiers, some of which yield additional reimbursement from governmental and/or private payers.

In addition, a lack of training and expertise in anesthesia billing may lead to a billable anesthesia service being missed or worse, non-compliant billing.

Payer Contracts

The second area where we find reimbursement issues in anesthesiology is in the payer contracts. When anesthesia providers are employed by the hospital the conversion factor and flat fee schedule usually make up a very small portion of the contract the hospital has with a particular payer. Since those contracts cover all aspects of the hospital’s services, there’s usually not a lot of attention focused on increases for anesthesia. Often, we find that the anesthesia conversion factor is well below market rates and that flat fees have never been negotiated. At Fusion Anesthesia Solutions, we work with our hospital partners during times of open negotiation with payers to provide data to ensure increases for anesthesia services are fair and equitable.

Another issue we see is even though there is a negotiated rate for anesthesia services, there is no place for that amount to be held within the hospital billing system. This results in the acceptance of the payment received whether it is correct or not and the potential for a significant loss of revenue for anesthesia services.

Anesthesiology is a highly specialized and complex service with an equally complex billing formula. Outsourcing the anesthesia billing to an anesthesia specific vendor will undoubtedly increase revenue. Many hospital leaders fear outsourcing this service will result in a lack of oversight of the revenue cycle, however, in our experience it improves it. Through technology and reporting we are able to provide our hospital partners with data on anesthesia services and revenue that they never had access to before. We will explore this further in Part 3 in our series of Revenue Cycle Health for Hospital Anesthesiology Departments.

For further insight on your anesthesia revenue cycle health contact Fusion Anesthesia Solutions at

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