Common Issues Faced By Anesthesia Practices
Anesthesiology is a medical specialty that is different from others. How? Well, it does not require its own separate practice to work. However, revenue-wise, it is more important than probably any other specialty. That’s because anesthesia services are required in all medical practices, regardless of the specialty. This makes anesthesia probably the most important thing to master for medical billers and coders
Many hospitals and healthcare providers attempt to bill anesthesia services using their internal teams. However, these teams are typically made up of general billers, which often results in numerous billing problems and, ultimately, denied claims.
That’s what this guide is all about. We have created this guide to help you understand the biggest problems faced by in-house teams and medical billing companies in anesthesia billing and how to solve them. So, let’s start.
Complexity of Billing Calculations
If you are a biller, then you probably already know this, but let’s state the obvious that anesthesia billing calculation seems simple, but it’s not.
Calculating the reimbursement amount is probably the trickiest part of anesthesia billing services. Unlike CPT codes of other specialties, whose reimbursement rate is directly available on the Physician Fee Schedule providers, you will have to calculate the amount yourself for anesthesia codes.
The following is the calculation formula:
(Base units + Time units + Modifier units) × Conversion factor
The formula seems simple, but in practical usage, it can confuse you a lot. Why? Because each anesthesia billing code has a different base unit. There are hundreds of if not thousands, of codes just for this service. So, selecting the right code is not easy and requires deep billing knowledge. Billers also need to keep current with the annual changes in billing guidelines and requirements.
Time unit calculations demand detailed documentation, with each 15-minute interval counting as a single unit. Nevertheless, when multiple providers are simultaneously involved or when cases present intricate scheduling, precise time tracking becomes significantly more challenging.
With that said, billing complexity is not your only problem. What’s worse is the financial pressure related to anesthesia billing. Both private companies and Medicare have reduced their rates for anesthetic services. Medicare’s drop in rates is probably the biggest. Reimbursements declined 8.2% from 2019 to 2024, dropping from $22.27 per unit to $20.44.
Modifiers Usage and Compliance Issues
Another common problem that every biller faces is selecting the appropriate modifiers. Although there are not many modifiers that go with anesthesia codes, they can be hard to select. Why? The modifiers themselves are not difficult to understand; however, the distinction between medical direction and medical supervision is what trips billers.
Both of these classifications need a multi-point criterion to be met for being valid. Keeping track of all these requirements for every code can be a nightmare for any biller or even entire billing teams.
If there are errors in modifier application, then your claims will get denied, and worse can happen if the denials are frequent.
Keeping The Denials Under Control
This is the real worrying part: the denials. This might come as a shock, but more than 20% of healthcare claims are denied every year. These are not just denied claims; this is revenue going out of your pocket. And guess what, the denial rates in the US are increasing every year. Plus, 60% of the denied claims are not even resubmitted by healthcare providers.
And that is for a good reason. Correcting and resubmitting denied claims costs money. Reworking a single denied claim can cost anywhere between $25 $118. So, it does not make sense to rework claims that have low reimbursement rates; however, for expensive claims, resubmitting is essential. That’s why it is vital to make sure that your claims are not rejected in the first place. Anesthesia claims are mostly rejected due to the following reasons:
- Incorrect time unit calculations or documentation
- Improper modifier usage or missing qualifiers
- Inadequate medical necessity documentation
- Prior authorization failures
- Coordination of benefits errors
60% of medical group leaders reported increased denial rates in 2024 compared to the previous year. According to a lot of estimates and studies from both private and government bodies suggest that the average denial rate ranges between 6% and 13%.
The solution to all these problems is simple. Just outsource your billing operations to specialized companies. Many third-party vendors offer premium anesthesia billing services at very affordable rates.
Final Word
Let’s wrap up everything we have discussed so far. Anesthesia services are one of the most important in any medical practice. However, its billing is hard, and often the claims end up in denials.
That’s why it is vital to minimize the denial rates. The best solution to all the problems that we discussed in the blog is to simply outsource the billing operations to third-party companies.
