CMS Rules on Billing

The Office of Inspector General (OIG) has given clear direction in the publication “Compliance Program Guidance for Individual and Small Group Physician Practices” on establishing a voluntary compliance plan. The intent of this initiative was to assist in preventing submission of erroneous claims or engaging in unlawful conduct involving the federal health care programs. By developing these compliance plans health care providers can use internal controls to better monitor the adherence to applicable statutes, regulations and program requirements.


A voluntary compliance program contains seven components:

  • Conducting internal monitoring and auditing;
  • Implementing compliance and practice standards;
  • Designating a compliance officer or contact;
  • Conducting appropriate training and education
  • Responding appropriately to detected offenses and developing corrective action;
  • Developing open lines of communication; and
  • Enforcing disciplinary standards through well-publicized guidelines.

In this post:

Billing Anesthesia Services
Induction and Emergence
Converting to General Anesthesia
Regional Anesthesia
Personally Performed Anesthesia
Pre-signing Anesthesia Record
Documenting Electronic Medical Record
Evaluation & Management Coding
Mitigating Outcomes
Fraud, Waste & Abuse
Detecting Healthcare Fraud

The Center for Medicare and Medicaid Services (CMS) has specific rules for the billing of anesthesia services including Monitored Anesthesia Care (MAC) and General Anesthesia (GA). The same case billed as either a GA or as MAC will be reimbursed at the same rate as long as you use the same modifier. The reimbursement is based on base units assigned to the procedure multiplied by a local conversion factor plus anesthesia time.

For example, a bunionectomy performed with a GA under Medical Direction will be paid the same as if performed as a MAC under Medical Direction, i.e. 50% in the physician name and 50% in the CRNA name. Reimbursement for a GA or MAC as Non-medically directed CRNA will reimburse 100% in the CRNA name whether GA or MAC. Changing the anesthetic technique in the middle of the case does not make a difference. You may start a case assuming it will be a MAC but half way through you may realize it requires more and you convert to a GA. As long as you document your technique it does not matter.


Billing Anesthesia Services

Understanding anesthesia billing and documentation is important for all organizations. If there is a change in the designation of a case from MAC to GA what are the consequences for documentation and billing? What are the key differences between MAC vs GA billing and documentation.

The important thing to consider is that the rules for Medical Direction documentation differ between a MAC and a GA. With a GA, it is expected the anesthesiologist will “personally participate in the most demanding procedures in the anesthesia plan, including induction and emergence.”


Induction and Emergence

CMS recognizes that there is not an induction and emergence for MAC. However, it is necessary for the anesthesiologist to demonstrate availability during the case. If the anesthesiologist cannot be available for one of the seven steps of medical direction, the claim may be submitted as Medical Supervision (AD). However, your Medicare Administrative Contractor may instruct you that it is permissible to bill as Non-medically Directed (QZ) when all steps are not met.


Convert Case to General Anesthesia

Another scenario occurs when an anesthesiologist creates the anesthetic plan and determines that a case can be done as a MAC but during the case the CRNA converts the case to a GA. There is no issue with CMS in this situation, it is acceptable to bill as a GA with the Medical Direction modifier (QK), as long as the anesthesiologist performed all seven steps of Medical Direction including presence at induction and emergence.

Under the Anesthesia Care Team approach, the anesthesia team is in charge of the anesthetic and the provider may make a change to the anesthetic based on professional judgment. The clinical decisions regarding the type of anesthetic are the responsibility of anesthesia.

There may always be clinical discussion regarding whether a case is a MAC or GA depending on the anesthetic given, such as with propofol. Monitored Anesthesia Care refers to presence of anesthesia personnel during a procedure to provide whatever anesthesia care they determine necessary and does not indicate the level of anesthesia needed. GA is a drug-induced depression of consciousness during which the patient cannot be easily aroused, even by painful stimulation. The ability to independently maintain ventilator function is often impaired. In many cases it is not uncommon to give a bolus of propofol such that momentarily that individual may not respond and may require a chin lift to maintain an airway. This fits the definition of a GA even though the sedation was for a cataract.


Regional Anesthesia 

How to bill for regional anesthetic techniques continues to pose some confusion. The purpose of the regional technique determines the method for submitting the claim for reimbursement.  When the regional anesthetic technique is administered and used as part of the primary anesthetic it is billed using anesthesia time and reimbursed in the same manner as a general anesthetic with the base units + time multiplied by the local conversion factor formula.  The time spent on the placement of the block prior to induction may be added to the case’s anesthesia time.  The two blocks of time are submitted for reimbursement.

“Reporting Postoperative Pain Procedures in Conjunction with Anesthesia,” is guidance published by the ASA that clearly lays out how to report the service to third party payers if the regional anesthetic technique is used for post-operative pain relief.

The general rule for billing the block for post-operative pain relief is listed in the ASA guidance:

“A provider may bill for a regional anesthetic technique as a service separate from the anesthetic if the regional technique is employed primarily for post-operative analgesia and the following conditions apply: the anesthesia for the surgical procedure was not dependent on the efficacy of the regional anesthetic technique and the time spent on the pre- or post-operative placement of the block is separated and not included in the reported anesthesia time.”

Post-operative regional anesthetic techniques are billed as an additional service provided the same day as surgery and reimbursed separately with a flat fee.  Documentation should show the purpose of the block and that it was performed for post-operative pain relief at the surgeon’s request.  Documentation of the surgeon request for the pain management shows medical necessity for the block.


Personally Performed Anesthesia Services

OIG Focuses on Review of Payment for Personally Performed Anesthesia Services in 2013. The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) publishes its Work Plan annually. The Work Plan summarizes new and ongoing reviews and activities that the OIG plans to pursue during the next fiscal year and beyond.  The Work Plan is one of the tools that the OIG uses to protect the integrity of the Medicare program to help identify and prevent fraud, waste and abuse. A new addition to the Work Plan for 2013 is a review of Anesthesia for Personally Performed Services.

According to OIG it will review Medicare Part B claims for personally performed anesthesia services to determine whether they were supported in accordance with Medicare requirements. It will also determine whether Medicare payments for anesthesiologist services reported on a claim with the “AA” service code modifier met Medicare requirements. Physicians report the appropriate anesthesia modifier to denote whether the service was personally performed or medically directed. (CMS’s Medicare Claims Processing Manual, Pub. No. 100-04, ch.12, § 50)

The OIG will review claims for personally performed anesthesia services to determine if the Medicare requirements are met. Claims for services personally performed by the anesthesiologist and submitted with the “AA” modifier results in higher payment for the anesthesiologist. The reimbursement is at a higher amount than the medically directed rate that limits reimbursement to 50% of personal performance.

The Medicare reimbursement rules are available in the Medicare Claims Processing Manual, Pub. No. 100-04, ch. 12, § 50. You can review the OIG 2015 Work Plan at https://oig.hhs.gov/reports-and-publications/archives/workplan/2015/FY15-Work-Plan.pdf

The “AA” modifier is used for anesthesia services personally performed by an anesthesiologist, and the “QK” modifier is used for medical direction of two, three, or four concurrent anesthesia procedures by an anesthesiologist. The QK modifier limits payment at 50 percent of the Medicare-allowed amount for personally performed services for the physician provided portion of the service.  Payments are precluded unless the provider has furnished the information necessary to determine the amounts due.

Considering the addition of this item to the work plan it is a good time to review your documentation and claims to assure that you are in compliance with the Medicare billing guidelines for personally performed and medically directed anesthesia services.


Pre-signing in Anesthetic Record

ACC must bring to the attention of our colleagues the importance of signing or attesting on the anesthetic record contemporaneously with events.  The habit of pre-signing for events such as induction or emergence can result in claims of fraudulent billing.  In previous settlements in California, members of the Department of Anesthesia were cited, and their actions recorded in the National Practitioner Data Bank.

Members of the department made it a habit of signing the record in anticipation of events.  Today, with the use of the electronic medical record it is very clear when a provider signs the record in advance of an event and pre-signing is easily discovered.

The OIG will be looking closely at the availability of providers in the operating room in the year to come.  Play it safe and sign for events only when actually present in the course of the case.


Documenting Electronic Medical Record

Documentation on the Anesthesia Record in an electronic medical record (EMR) requires the same level of vigilance and level of detail as documentation on a paper Anesthesia Record.  Because reimbursement for anesthesia services is based on the surgical or medical procedure, anesthesia time and any additional services provided it is imperative that the information is entered into the EMR.

Be aware that documentation in the EMR should occur contemporaneously with the service provided.  For example, physician presence at induction and emergence should be entered into the record at the time of presence and not before or afterwards.  The documentation is time stamped in the record and clearly indicates the time the acknowledgement was entered into the EMR.

Pre-recording information in the EMR could place into question the physician’s actual presence at the event.  This could impact payment for anesthesia services reimbursed at the medically directed rate.  It is important when administering regional blocks for post-operative pain management to indicate the time the block was placed which is usually before the start of anesthesia time and to document the medical necessity for the pain procedure, i.e. “surgeon requested that anesthesia administer a block for post-operative pain.”  When the regional technique is used for the primary anesthetic it is necessary to record the start and stop time for the block placement, which can be used as a component of discontinuous time for reimbursement.

Documentation of provider names and times for those covering for lunch breaks and relief is also important for legal and reimbursement reasons.  If a case is performed under medical direction and the CRNA is relieved by an anesthesiologist prior to emergence, the relief time documentation will assist in the determination of what modifiers to use when submitting the claim.

While the EMR solves the problem of submitting records with illegible signatures to the CMS it does not absolve the duty to provide detailed information on the care and services that were rendered to the patient.

Evaluation & Management Coding

Anesthesiologists are assuming a broader role in the perioperative setting and may have an opportunity to bill for clinical services not usually found in the anesthesia codes.  The requirements for these services usually fall under the Evaluation and Management Codes (E/M codes).  When using the E/M codes it is important to differentiate these services from those included as part of anesthesia services.

The E/M codes consist of three basic elements that must be documented to determine the level of reimbursement. The key elements are the history, physical exam and decision-making required by the patient’s condition. It is important that the level of service and all elements are documented according to the Clinical Procedural Terminology (CPT) guidelines and the patient’s condition.  One must remember that reimbursement is not dependent on how you feel about the case but on what you document in the medical record.

The History of the Present illness can have one of two levels, brief and extended.  A brief HPI consist of one to three elements of the HPI. An extended HPI consist of four or more elements of the HPI.  These elements are location, quality, severity, duration, timing, context, modifying factors and associated signs.

  • History Coding
    • Problem Focused
    • Expanded Problem Focused
    • Detailed
    • Comprehensive

There are 3 levels of Review of systems; problem pertinent, extended and complete.  A problem pertinent ROS deals only with the problem documented and an extended ROS, 2 to 9 systems related to the problem concerned.  A complete ROS deals with the problem plus all additional body systems.

Reimbursement will depend on the level of history documented. A history is made of different parts and these elements are:

  • Chief Complaint
  • History of Present illness
  • Review of Systems
  • Past Family and/or Social History

There are only two levels of Past Hx, Family Hx and Social Hx (PFSH):  these are pertinent and complete.

  • A pertinent PFSH requires one item from at least one of the three areas
  • A complete PFSH, two of the three areas.

Please look at our video below to see how it all comes together.

This will give you a good start on CPT coding in Evaluation and Management Codes.

Coding Physical Exam

The physical examination is the objective portion of the patient encounter. The extent of the examination performed is determined by the patient’s medical condition and the nature of the current illness as recorded in the history.

There are four levels of examination:

  • Problem focused
  • Expanded problem focused
  • Detailed
  • Comprehensive

There are two documentation guidelines: these are from 1995 and 1997. Recognize 7 body areas and 11 organ systems

It is important to record the specific details of all abnormal or variant findings.   Notations of “negative” or “normal” are acceptable for documenting findings related to any unaffected area or asymptomatic organ system.

Each level of examination has certain requirements for documentation:

  • Problem focused:  one body area and/or organ system exam
  • Expanded problem focused:  Limited two to seven body area and/or organ system exam
  • Detailed:  an extended two to seven body area and/or organ system exam
  • Comprehensive:  at least eight system exam.  Does not use body areas and/or systems.

An accurately documented examination will allow for better quality of care, will help to establish the medical necessity of your service and allow for correct code selection.

What is Mitigation in Compliance?

Clients frequently ask us, what is “mitigation in compliance?” The answer comes straight from the dictionary, which states, “Mitigation is the action of reducing the severity, seriousness, or painfulness of something.”


Mitigating Outcomes

In the world of compliance, we do our best to stay out of the government’s crosshairs.  Despite our vigilance, there is always the chance something will go wrong and it may appear to the government you are billing incorrectly, raising the risk of false claims allegations.  To defend against this we recommend you adopt a compliance plan, perform audits and educate your staff.  By performing these activities, you can “mitigate” or lessen the probability that there will be an action against the group and lessen the severity of the penalties in the event one occurs.  Despite a recommendation from the Office of Inspector General to adopt the mitigation measures, anesthesia providers often forget the benefits they afford.

CMS makes this clear in their Compliance Policy and Guidance, which you can access below, in the active link.  Please review this to fully understand how you can be prepared for potential issues.

What You Can Do

When is the last time you reviewed your compliance plan, performed an audit and educated your staff?  We can help you “mitigate” by assisting you with the recommended compliance activities.

In addition you can get more information by following the link below:


Fraud Waste & Abuse

We have been hearing much about Fraud and Abuse in the news lately and are aware the government has their eyes on the Anesthesia profession. As providers of medical care we must be very familiar with these concepts.

Fraud is an intentional action that results in a benefit to the perpetrator. The intention must be present for an action to be found to be a fraudulent activity. In healthcare that is usually found with intentionally submitting claims for reimbursement for services that weren’t rendered or were not given in the manner claimed. A violation of the anti-kickback statute that results in reimbursement to the group can result in a false claims allegation by the OIG.

Other actions can lead to allegations of false claims such as retention of overpayments, billing for services not provided or medically unnecessary, or up coding a claim, which uses a higher code than that which indicates the service rendered. An example of up coding is using a code with a higher amount of base units than that performed. Unbundling services breaks apart elements into separate items of a service that is reimbursed as a bundle. There have been cases where an anesthesiologist unbundled provision of oxygen and basic monitoring from basic anesthesia care to bill for them separately.

Examples of fraud that show intent to defraud include: documenting a service that did not occur, upgrading the physical status, submitting documentation for reimbursement that you know is not correct and creating false documentation to support a higher level of service.


Detecting Healthcare Fraud

The main tools for detection of fraud and abuse were traditionally through whistleblowers who took information of a suspicious practice to the government.  This tool is still used, but electronic audits and monitoring are now playing a large role in fraud detection.  Usually, with either type of investigation you won’t know you are under investigation until the government unveils its case against you.  For some groups this is after many years of investigation and evidence collection.  With electronic means to review your claims for up to the last 10 years the risks are very high for anesthesia providers.

It is important for all anesthesia practices to be familiar with the RAC program. The RAC program was started after a successful Medicare demonstration program that contracted with outside companies to find overpayments.  RACs are feared and rightly so, they are data mining companies rewarded for finding money.  The government incentivized the auditors by rewarding them with a percentage of the money collected. After the pilot project started, Medicare agreed to reward the RAC for finding underpayments along with the overpayments.

The RAC program uses auditors that focus on areas where billings for Medicare services are higher than other areas.  RACs are entitled to keep a contingency fee of the money they return and RACs can look back at records for the past three years. 

The RAC program is here to stay and any group that bills Medicare should be aware of their presence.

ACC is Here to Help

Anesthesia Compliance Consultants will assist your organization to develop a comprehensive Compliance Plan that covers the seven components.  The plan will be created to be consistent with the needs of the anesthesia practice. The plan will satisfy federal and state guidelines, laws and regulations.  If you have a compliance plan in place, we will review your current plan and revise it to assure that it contains all the steps.  This effectively will help reduce your risk of fraud and offer the most protection for your organization.  

Our team consists of professionals with extensive backgrounds in healthcare law and anesthesia practice. We have been in the field of Anesthesia Compliance since 2002 and have assisted numerous organizations with their compliance programs.