Anesthesia Billing 101

If you’re a member of an anesthesia practice, anesthesia billing is vital because it’s the only way you can receive proper compensation for your services, which is crucial for your practice’s financial stability. Only through accurate anesthesia billing can your practice generate revenue and cover operating costs, so you can continue to provide quality care. 

But the labyrinthine nature of anesthesia billing claims submission and management can be treacherous.

• Anesthesia billing’s complex coding system involves intricate coding based on factors like procedure type, patient status, and time spent, requiring careful documentation to process proper reimbursement.
• As a practitioner, you also need to get anesthesia billing right because regulatory compliance is all-important, especially for anesthesiologists. You must follow proper billing practices to adhere to healthcare regulations and avoid penalties from payers like Medicare and private insurance companies. 
• In addition, documentation is key, since detailed anesthesia records are the foundation of accurate billing; they’re the source for selecting appropriate codes and modifiers. 

Exactly how does the anesthesia billing process work? And when might it be time to call in the services of third-party anesthesia billing services?

How to bill for anesthesia services

As individual healthcare providers, how do anesthesiologists undertake anesthesia billing?

The primary factor in anesthesia billing is Anesthesia Time Units. Anesthesiologists bill for their services using Anesthesia Time Units measured in 15-minute increments. Each 15 minutes of anesthesia time is considered one unit, with the first 15 minutes billed as a full unit and subsequent time as partial units. 

In the next step, anesthesiologists add the total anesthesia time to a base unit value specific to the procedure. Next, providers add physical status modifiers as units to the anesthesia code to indicate the patient’s overall health status before the procedure, which can affect the billing amount. 

To determine the final charge, anesthesiologists multiply the total calculated units (base units + time units + modifier units) by a conversion factor set by the payer. The more complex the procedure and the longer the anesthesia time, the higher the bill.

Anesthesiologists then make sure they use the correct medical codes, which is paramount in anesthesia billing. Anesthesia billing uses specific Current Procedural Terminology (CPT) and American Society of Anesthesiologists (ASA) codes to accurately represent the type of anesthesia provided and the patient’s physical status. 

For billing purposes, the anesthesiologist carefully documents the patient’s condition, anesthesia technique, and total anesthesia time during the procedure. The provider selects the appropriate CPT or ASA code for the procedure, using any necessary modifiers based on the patient’s situation. 

After calculating the anesthesia charge by adding the base units for the procedure to the calculated time units and any applicable modifier units, the anesthesiologist submits a claim form with patient details and codes to the insurance company. As a final step, anesthesiologists compare the calculated amount to the billed amount. 

How do hospitals bill for anesthesia services?

Hospitals bill for anesthesia services the same way as individual anesthesiologists. They add base units and time units and then multiply by a conversion factor, which is determined by the payer. 

Here are the steps that hospitals follow for anesthesia billing:

1. They assign base units based on the correct anesthesia procedure code, which is linked to a specific number of base units. 

1. They calculate time units by dividing the total time by 15 minutes.
2. They add the base units to the time units. 
3. They add modifier units.

1. They multiply the total units by the conversion factor. 
2. They compare the calculated amount to the billed amount. 

Additional basics of anesthesia billing

Over and above all the procedures delineated above, the absolute first step in anesthesia billing is pre-authorization. Before performing an anesthesia procedure, it’s crucial for anesthesiologists to obtain pre-authorization from the patient’s insurance company to ensure coverage. 

Documentation can’t be overlooked. For accurate billing, anesthesiologists must thoroughly document the anesthesia provided, including start and end times, medications administered, and any complications.

Several factors can affect anesthesia billing.

• One is the complexity of the procedure, which is reflected in the number of base units. More complex procedures have higher base units.

• The patient’s physical condition is another consideration. Billers use modifiers to describe the patient’s physical condition, such as age, systemic disease, or unusual position. 

• Insurance companies may have contractual agreements that specify payment rates. 

Anesthesia billing can be a tangle because you need to accurately capture all aspects of the procedure, including the patient’s physical status, the type of anesthesia, and the duration of care. Adding to the complexity is the fact that coding is difficult, billing is time-based, and regulations are always changing.

Here are some of the pitfalls of anesthesia billing:

• Coding errors are common. It’s easy to confuse billing codes for different types of anesthesia, but that leads to claim denials and delays. 
• Inaccurate documentation can result in billing errors, claim denials, and legal issues. 
• Inaccurate patient details, such as a misspelled name or incorrect date of birth, can trigger claim denials or delays. 
• If you forget to include physical status modifiers that indicate the patient’s health status, your incorrect billing will wind up in the dead end of a claim denial or delay.
• You must include the correct number of base units that indicate the complexity of the procedure.
• You must record the accurate number of time units indicating the total time spent on the procedure, with each unit representing 15 minutes. 
• You must include the conversion factor mandated by the payer, which reflects

the cost assigned to each unit of the anesthesia service. The conversion factor varies for different geographic locations.