Anesthesia Coding Alert

Check the updated guidelines if you bill anesthesia services on behalf of a critical access hospital.

If you bill anesthesia services on behalf of the provider through a Method II critical access hospital (CAH), your bottom line could improve starting in January 2012.

Background: Anesthesiologists who provide services in a Method II CAH (sometimes referred to as CAHs that have elected the "optional" method) have the option of reassigning their billing rights to the CAH. The CAH then submits a bill with revenue code 0963 (Professional fees for anesthesiologist [MD]) to receive pay for anesthesia services. When the service is reported with modifier AA (Anesthesia services performed personally by anesthesiologist), CMS currently calculates pay based on a 20 percent reduction of the fee schedule amount before calculating deductible and coinsurance.

Change: CMS transmittal 2268 dated August 1, 2011, removes the 20 percent reduction when calculating payment for these services. The change takes effect January 3, 2012.

Supporting information with the transmittal explains that "when a medically necessary anesthesia service is furnished within a HPSA [health professional shortage area] area by a physician, a HPSA bonus is payable. ... Pay physicians the HPSA bonus when CPT codes 00100 through 01999 are billed with the following modifiers: QY, QK, AA, or GC and 'QB' or 'QU' in revenue code 963."

Translation: Expect the following payment levels once the change is implemented, depending on the circumstances and modifier reported:

• Modifier AA results in physician payment at 100% of the allowed amount.
• Modifier GC (This service has been performed in part by a resident under the direction of a teaching physician) results in physician payment at 80% of the allowed amount.
• Modifiers QK (Medical direction of two, three or four concurrent anesthesia procedures involving qualified individuals) and QY (Medical direction of one certified registered nurse anesthetist [CRNA] by an anesthesiologist) result in physician payment at 50% of the allowed amount.

Details: Read the full details in the CMS Medicare Claims Processing Manual, Chapter 4, Section 250.3.2, "Physician rendering anesthesia in a hospital outpatient setting."