Anesthesia Coding Alert

Hint: It’s all about following the ‘7 rules.’

One of the primary factors to consider when reporting anesthesia services is which of your providers administered the service so you can assign the correct performance modifier. When you’re coding for services provided by the anesthesiologist, the choice is simple: you append modifier AA (Anesthesia services performed personally by anesthesiologist). Things can get a bit trickier when the anesthesiologist oversees the work of another anesthesia provider because you need to distinguish between medical supervision and medical direction.

Read on for a quick refresher on what medical direction and medical supervision are, and how you should report each service.

Step 1: Define ‘Concurrent’ Procedures

Your first step is to identify the number of concurrent cases in which the anesthesiologist was involved in at that particular time. Remember that concurrent anesthesia procedures are those that overlap, even by one minute, and include all cases – not just Medicare.

Take note:  Payers may allow only three base units per procedure when the anesthesiologist is involved in more than four procedures concurrently or performs other services while directing the concurrent procedures. The payer might recognize an additional time unit if the physician can document that he or she was present at induction, which only apply to general anesthetics.

CMS has previously clarified that “the carrier should allow three base units plus one time unit if the physician is present at induction (and reports the AD modifier).”

Verify: Check your local guidelines for specific instructions and know that Medicare will reduce the units for you when applicable, advises Kelly Dennis, MBA, ACS-AN, CAN-PC, CHCA, CPC, CPC-I, owner of Perfect Office Solutions in Leesburg, Fl. You don’t need to make the adjustment yourself.

Step 2: Understand Medical Direction Criteria

Medical direction occurs when an anesthesiologist is involved in and physically present at one, two, three, or four concurrent procedures in which another anesthesia provider is taking care of the patient. The Center for Medicare and Medicaid Services (CMS) outlines seven criteria that must be met before you can report a case as medical direction instead of medical supervision (sometimes referred to as the Seven Rules of Medical Direction). To qualify as medical direction, the anesthesiologist must:

1. Perform a pre-anesthesia examination and evaluation

2. Prescribe an anesthesia plan

3. Personally participate in the most demanding procedures of the anesthesia plan, including induction and emergence

4. Ensure that any procedure in the plan that he or she does not perform is performed by a qualified anesthetist

5. Monitor the course of anesthesia administration at intervals

6. Remain physically present and available for immediate diagnosis and treatment of emergencies

7. Provide the indicated post-anesthesia care.

Your modifier choices to designate when the anesthesiologist medically directed are:

• QY –  Medical direction of one certified registered nurse anesthetist (CRNA) by an anesthesiologist
• QK – Medical direction of two, three, or four concurrent anesthesia procedures involving qualified individuals

Payment: If the work qualifies as medical direction, each procedure the anesthesiologist directs is reimbursed 100 percent (which will split 50/50 between the physician and CRNA by Medicare and may vary by other payers).

Step 3: Shift Coding Gears for Medical Supervision

If the anesthesiologist does not meet all medical direction criteria and/or if the case load goes beyond four concurrent cases, you may need to report the service as medical supervision instead of medical direction. Based on information published by several of the Medicare Administrative Contractors, you may be able to report the service as non-medically directed, as indicated below.

Here’s how: Report medical supervision by appending modifier AD (Medical supervision by a physician: more than four concurrent anesthesia procedures) to each of the anesthesiologist’s claims. The exception is when a Medicare Administrative Contractor has published information allowing the CRNA to report modifier QZ (CRNA service: without medical direction by a physician) for cases classified as failed medical direction.  

Expect different reimbursement: When you report medical supervision cases to traditional Medicare, the physician can only bill for a maximum of 3 base units and no time (plus one additional unit if the anesthesiologist participated in induction). The CRNA involved with the case can bill for the actual base units and time units, and is paid at 50 percent, according to medical direction rules. If the cases are relatively short with quick turnover, this method may not be a financial hardship on your practice. However, if the cases are lengthy, not being paid for the time spent on the case will cost your practice!

“The physician is eligible for reimbursement of three base units unless he or she was present for induction, which can increase that number to four,” explains Cindy Hinton, CPC, CCP, CHCC, owner of Advanced Coding Solutions, LLC, in Franklin, Tn. “The AD modifier automatically signals the reduction and will occur at the payer level even if the claim is submitted with full base/time units.”

Tip: If your state, practice, and hospital allow it, some practices know that they do better to bill a QZ (CRNA service: without medical direction by a physician) for the CRNA working alone. That way the CRNA will be paid at 100 percent for the case.

Example 1: If your group provides general anesthesia for a two-hour spinal procedure with instrumentation, this is how you would be paid if your contracted rate is $100 per unit (15-minute units, for a total of 8 time units and your payer follows CMS guidance for payment):

Supervision MD (present at induction - $100 X 4) $400 CRNA (13 base units + 8 time units X $50 (50% of contracted rate) = $1, 050 Total $1,450

CRNA alone (13 base units + 8 times units X $100 = $2,100 (an increase of $650)

Example 2: If an anesthesiologist medically directs a case with a high number of base units (such as 00406, Anesthesia for procedures on the integumentary system on the extremities, anterior trunk and perineum; radical or modified radical procedure on breast with an internal mammary node dissection, which is 13 units) and the service becomes medical supervision, the anesthesiologist can only be reimbursed for 3 base units (or 4 units if his participation in induction is documented). This is a loss of 9 or 10 units on a single case – which might not be a large discount for a single case, but would quickly mount if it happens often.

Good to know: There can be a number of reasons a case can go from medical direction to medical supervision, but one of the most common (and often avoidable) is because of an error in documenting time. Teach all your providers the importance of accurately documenting start and stop times so that you can accurately code their work. The overlap of just one minute can make the difference in medical direction versus medical supervision and can be a costly oversight in the long run.