Commercial health insurers had an average claims-processing error rate of 19.3 percent, a 2 percent increase from 2010, according to the AMA findings, which are based on a random sampling of 2.4 million electronic claims in February and March.

The AMA estimates the increase in overall inaccuracy represents an extra 3.6 million in erroneous claims payments compared to last year and adds $1.5 billion in unnecessary administrative costs. Eliminating health insurer claim payment errors would save $17 billion annually, the AMA estimated.

Physician billing and practice management companies have had to implement new tools and techniques to insure that their clients done feel the effects of this insurance industry trend.  

CMS muddied the waters by stating that the medically directing anesthesiologist may perform other duties concurrently (sometimes known as the “Six permissible sins” of medical direction). These duties include: 

1. Addressing an emergency of short duration in the immediate area
2.  Administering an epidural or caudal anesthetic to a patient in labor
3. Performing periodic, rather than continuous, monitoring of an obstetrical patient
4. Receiving patients entering the operating suite for the next surgery
5. Checking or discharging patients in the PACU
6. Coordinating scheduling matters

The emergency case is clearly an emergency (CPT code 99140) and I think we can assume that OR #2 is in the immediate area. So what constitutes “a short duration”? My recommendation is to look at the expected on-call response time as your relative duration. Most anesthesia groups that utilize from-home, on-call for CRNAs, expect them to arrive within 30 minutes of being contacted (group policy statement). In the about example of the anesthesiologist starting the emergency C section and remaining in OR #2 for 31 minutes, would qualify for all three criteria and the case should be billed as medically directed and not subject to decreased reimbursement for broken medical direction (or supervision). My qualified opinion.

Anesthesia groups should use all resources available to them when faced with a situation that they have not encountered before. A few suggested resources  are:

• check with their fiscal intermediaries for guidance
• post your situation on a respectable listserv so that your colleagues can share experiences
• contact a consultant that might have experience with this issue

MedPAC also recommended 1 percent updates in 2012 for outpatient dialysis centers, and hospice. For ambulatory surgical centers (ASCs), Congress should implement a 0.5 percent increase in calendar year 2012 while requiring ASCs to submit cost and quality data. Skilled nursing facilities (SNFs) would get no update in fiscal year 2012, according to MedPAC, which also called for Congress to establish a quality incentive payment for SNFs and for SNFs to report more accurate diagnostic and service-use information. MedPAC criticized the amount of fraud that occurs in home health agencies and advised HHS to redesign how it pays for home healthcare. The Commission also recommends that HHS investigate financial relationships and patterns of referrals between nursing homes and hospice and asked Congress to change Medicare’s payment to hospice.

This means that the anesthesia rates will go up slightly in 2012.

1. Insurance membership will take a hit from slow recovery. Few unemployed will take advantage of COBRA while employees, faced with paying more of their health plan premium, will select high-deductible, low-premium PPO plans, hurting HMOs.
2. No easing on payment pressure. Although health plan payments will keep pace with inflation and operating cost increases, they will not make up for declining or stagnant Medicaid and Medicare payments.
3. Patients will postpone care, hurting providers. With high unemployment and underemployment and increased out-of-pocket costs, people will continue to put off treatment, keeping volumes soft at hospitals, ambulatory centers and physician offices.
4. Cost is king. Soft volume, downward pressure on revenues and a deteriorating payer mix with increased bad debt will drive providers to seek more cost savings. However, unions, staffing ratios and regulations will make those cuts difficult. At the same time, health plans will begin to explore and increase the use of tiered networks and stratified payments to encourage use of lower-cost providers.
5. Capital remains elusive. As in 2010, most non-profit hospitals will find it difficult to access capital. Lenders are requiring an increase in days cash-on-hand, coverage ratio, stronger EBITDA and smaller borrowings. Credit rating agencies want to see: 1) physician alignment strategy, 2) clinical integration and cost reduction action, 3) an IT plan, and 4) plans to capture more market share.
6. Physicians will make or break new care models. To improve outcomes and lower costs, hospitals and medical groups will focus on accountable care, bundled payments, patient-centered medical homes and/or clinical integration. Reducing variation in care – primarily by physicians – will be central to any successful strategy. An effective bundled payment strategy, for example, requires specialists to address clinical resource consumption and supply cost and use while standardizing care protocols in conjunction with hospitalists and intensivists.
7. Construction focus is on fast returns. Construction projects will be scaled down, with a focus on regulatory compliance, enhancing throughput, improving care/outcomes and, if possible, capturing additional market share. Providers also will prioritize construction that generates superior returns, such as surgical services and imaging centers. It won’t be surprising to see the growth of freestanding emergency departments to reduce the need for hospitals, increase access and provide capacity for the newly insured.
8. IT becomes more pervasive – or else. Information technology underpins providers’ ability to shift to new care models, so IT moves to center stage with efforts to implement electronic medical records, computerized physician order entry and health information exchanges – provided, of course, medical facilities already have in place e-prescribing, PACS and online results reporting and scheduling.
9. Let’s make a deal. Mergers and acquisitions will be brisk as more hospitals and physician groups acknowledge they lack the resources to invest in information technology, facilities and equipment for new delivery models or the leverage to negotiate effectively with health plans. Given their central role in new models, the value of primary care medical groups will increase. It’s possible that health plans will enter the market to acquire these medical groups.
10. Market share, market share, market share. Hospitals and medical groups have underused assets and must get them busy. Providers also realize that more volume will generate incremental revenue and decrease per unit cost. Hospitals will hunt for new programs to fill empty or underperforming assets.

January 11, 2011 | Molly Merrill, Contributing Editor for The Camden Group

Despite regulatory guidelines that require them, postoperative anesthesia evaluations are often neglected. Ambiguity may arise over which clinician is responsible or patients simply may be hard to track down—either having been discharged without an overnight stay or detained in the physical therapy or radiology departments.

However, a new approach involving an electronic database and a designated resident may help ensure that the potential timesaving, cost-saving and lifesaving evaluations are actually performed. The study is scheduled to be presented at the 2010 annual meeting of the American Society of Anesthesiologists in San Diego (abstract 1307).

To read the full article Click Here.

The revised guidance added a significant amount of new language to the old guidelines. In summary, the revised language addresses the following four (4) areas:

1. Types of Anesthesia Services: The revised guidance provides definitions of the various types of anesthesia related services (i.e. general anesthesia, regional anesthesia, monitored anesthesia, topical/local anesthesia, minimal sedation, moderate sedation) and indicates whether they involve the administration of “anesthesia”.
2. Administration/Supervision Requirements: The revisions provide additional guidance regarding who may administer anesthesia and the supervision requirements of non-physician personnel, specifically Certified Registered Nurse Anesthetists (“CRNAs”).
3. Pre and Post anesthesia evaluations: The revisions refine the interpretive guidelines by explaining the requirements for pre and post anesthesia evaluations.
4. Intra-operative Reports: The guidance indicates the minimum elements required under the current standard of care for an anesthesia intra-operative report or record.

Part 1: Defining Anesthesia and Related Services

The new changes clearly define both anesthesia and sedation, borrowing from definitions found in the American Society of Anesthesiologists’ (ASA) most recent set of practice guidelines (Anesthesiology 2002; 96:1004-17), summarized here:

• Anesthesia involves the administration of a medication to produce a blunting or loss of pain, voluntary and involuntary movement, autonomic function, and memory and/or consciousness.
• Patients often require assistance in maintaining a patient airway, or correcting depressed spontaneous ventilation due to drug-induced depression of neuromuscular function.
• Cardiovascular function may be impaired.
• Anesthesia is used for those procedures when loss of consciousness is required for the safe and effective delivery of surgical services.

Monitored Anesthesia Care (MAC) includes the monitoring of the patient by a practitioner who is qualified to administer anesthesia. Deep sedation/analgesia is included in MAC.

• In Deep Sedation/Analgesia, patients cannot be easily aroused but respond purposefully following repeated or painful stimulation.
• The ability for the patient to independently maintain breathing function may be impaired.
• Patients may require assistance maintaining an airway, spontaneous ventilation may be inadequate.
• Cardiovascular function is usually maintained.
• Deep sedation/analgesia includes the use of propofol.
• Must be delivered or supervised by a practitioner as specified in 42 CFR 482.52(a).

Regional Anesthesia is the delivery of anesthetic medication at a specific level of the spinal cord and/or to peripheral nerves used when loss of consciousness is not desired, but sufficient analgesia and loss of voluntary and involuntary movement is required.

• Regional anesthesia includes epidurals, spinals and other central neuraxial nerve blocks.
• Given the potential for the conversion and extension of regional to general anesthesia in certain procedures, administration of regional and general anesthesia must be delivered or supervised by a practitioner as specified at 42 CFR 482.52(a).
• Epidural or spinal route for the purpose of analgesia—during labor and delivery—is not considered anesthesia, and therefore it is not subject to the anesthesia supervision requirements.
• If C-section is necessary, anesthesia supervision requirements would apply (42 CFR 482.52(a)).

In contrast, the new CoP also outline those services not subject to the anesthesia administration and supervision requirements (42 CFR 482.52(a)):

Topical or Local Anesthesia or Minimal Sedation in which:

• Patients respond normally to verbal commands.
• Although cognitive function and coordination may be impaired, ventilation and/or cardiovascular functions are unaffected.

Moderate Sedation/Analgesia (“Conscious Sedation”) in which:

• Patients respond purposefully to verbal commands, either alone or accompanied by light tactile stimulation.
• No interventions are required to maintain a patient airway.
• Spontaneous ventilation is adequate.
• Cardiovascular function is usually maintained.

Rescue Capacity

• Hospitals are required to ensure that procedures are in place to rescue patients whose level of sedation becomes deeper than initially intended.
• Intervention by a practitioner with expertise in airway management and advanced life support is required.
• The qualified practitioner corrects the adverse physiologic consequences of the deeper-than-intended level of sedation and returns the patient to the originally intended level of sedation.

Tips for Compliance

To comply with this section of the regulations, changes in policies and practices may be necessary. Assuring that all areas have been addressed is the only way of avoiding violations on future surveys. Begin by assuring that the following items have been established in policy and practice:

• Align the definitions for anesthesia and sedation with those supported by CMS and ASA.
• Define where the different levels of anesthesia can occur and under what circumstances.
• Evaluate the level of compliance with the requirements at each location where anesthesia and sedation is administered.

• For professional claims (CMS-1500 Form and 837P) submitted by physicians and other suppliers that include span dates of service, the line item“From” date will be used to determine the date of service and filing timeliness. (This includes supplies and rental items).  For physicians and other suppliers that bill claims with span dates, these span date services cannot exceed one month.
• For institutional claims that include span dates of service (i.e., a “From” and “Through” date span on the claim), the “Through” date on the claim will be used to determine the date of service for claims filing timeliness.
• BE AWARE: If a line item “From” date is not timely, but the “To” date is timely, Medicare contractors will split the line item and deny untimely services as not timely filed.
• Claims having a date of service of February 29th must be filed by February 28th of the following year to be considered as timely filed. If the date of service is February 29th of any year and is received on or after March 1st of the following year, the claim will be denied as having failed to meet the timely filing requirement.

Change request (CR) 6960 specified the basic timely filing standards established for FFS reimbursement, which are a result of Section 6404 of the Patient Protection and Affordable Care Act of 2010 (ACA) that states that claims with dates of service on or after January 1, 2010, received later than one calendar year beyond the date of service will be denied by Medicare.

In researchers’ sampling of 10 nonprofit BCBS plans, seven held more than three times the amount of surplus that regulators consider to be the minimum amount needed for solvency protection. For example, BCBS of Arizona has surplus more than seven times the regulatory minimum as of the end of 2009. Health Care Service Corporation, a mutual insurer doing business as BCBS of Texas, Illinois, New Mexico and Oklahoma, has five times the regulatory minimum. Meanwhile, over the past three years both insurers continued to raise their rates.

The report calls on state insurance regulators to scrutinize surpluses when considering rate increases and set maximum limits for surpluses. 

The most recent incarnation of the Medicare reimbursement formula is called the Sustainable Growth Rate (SGR), put in place in 1998. The government uses the formula to set an overall target amount of spending for certain types of medical goods and services. Using Medicare spending in the late 1990s as a baseline, the SGR factored in overall economic growth to create a yearly budget. “It was enacted during a time period when physician payments were not growing rapidly,” said Paul Van de Water, an economist at the Center for Budget and Policy Priorities. “It was assumed that the relative slowdown was likely to continue.”

While the SGR formula seemed sound in 1997, it didn’t account for one huge detail. Overall medical spending grew much faster than inflation. The SGR turned out to be totally unsustainable, leaving physicians with a reimbursement rate that did not keep pace with increasing medical costs, thus requiring a fix — not of the formula but of the payment.

The problem first became apparent in 2002, when Medicare costs outpaced the SGR. A Republican-led Congress stepped in with extra funding the following year, preventing a reduction in physician payments. Congress has continued to do so for seven years now.

Under both Democratic and Republican leadership, Congress has consistently delivered the necessary funds to avoid cuts to physician payments. A CBO report this month estimated that $276 billion would be required to shore up Medicare for the next decade. Not surprisingly, no politician wants to get stuck with that check. So they’ve all politely deferred from the financial commitments in order to avoid the appearance of adding billions of dollars to the national deficit.

But the “doc fix” actually fixes nothing. Health policy experts agree that health spending is not slowing down, so the short-term patches only “kick the can down the road,” as Van de Water put it. “They want to have their cake and eat it, too.” In other words, it’s a face-saving gimmick that makes it look like Congress is sticking to Medicare cost controls when it isn’t, despite numerous red flags over the years. A CBO report in 2006 suggested that “the SGR mechanism … will substantially reduce payment rates for physicians’ services over the next several years. Payment rates could decline by a total of 25% and 35% during that period if physicians continue to provide services at the current rate.”

A 2007 report from MedPac, which advises Congress on Medicare, found that, in addition to failing to keep pace with spending, the SGR had not tamped down physician spending. “The SGR does not appear to have limited the growth in volume — that is, the number of services being furnished to each patient and the level of service intensity provided,” the report concluded.

One option would be to ditch SGR and find a new, better formula that would make the “doc fix” ritual obsolete. The American Medical Association, which has previously supported temporary “doc fix” legislation, has demanded this kind of permanent action, so the short-term fix that landed in the House proposal left them unsatisfied. “The pending Medicare proposal treats the symptoms,” AMA President J. James Rohack said in a statement late last week. “It’s not a cure for the disease. We urge Congress to take action well before the next deadline to cure this problem once and for all to preserve access to care for seniors and military families and enable the success of health system reform and delivery innovations.”

But Congress has declined to move in that direction, and, for now, the exercise carries on. In 2010 alone, Congress has already headed off three scheduled payment drops — in January, March and April. This week, if all goes as the Democrats planned, they will extend the “doc fix” for an additional three years. The problem will be settled in the short term — until the 112th Congress takes up the issue all over again.

Claims containing June 2010 dates of service which have been paid at the negative update rates will be reprocessed as soon as possible.  Under current law, Medicare payments to physicians and other providers paid under the MPFS are based upon the lesser of the submitted charge on the claim or the MPFS amount. Claims containing June dates of service that were submitted with charges greater than or equal to the new 2.2 percent update rates will be automatically reprocessed. Affected physicians/providers who submitted claims containing June dates of service with charges less than the 2.2 percent update amount will need to contact their local Medicare contractor to request an adjustment.  Submitted charges on claims cannot be altered without a request from the physician/provider. 

Physicians/providers should not resubmit claims already submitted to their Medicare contractor.