BCBS of Louisiana Changes Their Reimbursement for Anesthesia

bcbslaBlue Cross Blue Shield (BCBS) of Louisiana has recently begun holding meetings with Anesthesiologists across the state to discuss how they (BCBS) plan to change the reimbursement for anesthesia services. BCBS has indicated that they plan to increase the unit rate for anesthesia services. But, the other changes that come along with this proposed rate increase have the potential of putting BCBS at the very bottom of the commercial payers relative to the paid per unit reimbursement.

BCBS Reimbursement goals

  • To more accurately reimburse the multiple anesthesia providers that participate during a surgical case.
  • To gain similar clinical documentation as Medicare for the BCBS patient population.
  • To increase the anesthesia reimbursement to physicians.

The Price for Increased Reimbursement

In exchange for increasing the anesthesia reimbursement rate to anesthesia providers, BCBS is proposing the following clinical documentation and claims filing requirements:

  1. Anesthesia providers (MDs, CRNAs & AAs) would be required to submit claims using modifiers that indicate which members of the care team participated in the surgical case.
  2. The guidelines that are currently used by Medicare Intermediaries for the qualification of Medical Direction of CRNAs and AAs by a physician would be employed for BCBS patients.
  3. A ratio would be implemented for physician to CRNAs or AAs during medical direction. It appears that BCBS would lower reimbursement for non-medically directed cases, similar to Medicare’s rules.
  4. BCBS would implement a split reimbursement schedule for all claims that have multiple providers participating in the case.

What’s the Impact for a Typical Anesthesia Group

Each anesthesia group should perform an analysis to determine the potential impact that these changes will have on their group practice. Based on what we currently know, the most basic analysis would be a comparison of the revenues from BCBS over the past twelve (12) months against the expected revenue under the proposed changes.  I suggest that each practice calculate the split and unit rate that will allow for the group to breakeven under the newly proposed reimbursement. Most of the groups that I have estimated the impact for will break-even under the proposed changes if the split is 75/25 using a $54 unit rate. This is before you factor in a potential wild card.

The Wild Card

The wild card in this newly proposed reimbursement is the requirement to medically direct BCBS cases and use a ratio (4:1) when medically directing CRNAs and AAs. This single change has the potential to negatively affect the way anesthesia group’s staff and carry out their daily cases.  The additional documentation and tighter medical direction requirements will not insure improved quality of anesthesia care. However, the changes will drive up the cost of anesthesia services due to the increased staffing required to meet the medical direction qualifications. The sample BCBS impact analysis above has Not taken into consideration a lowered reimbursement for those cases not medically directed by a physician.

 What a Win-Win Looks Like

Win-win situations do not occur when one party leaves with all the marbles. A Win-Win for BCBS and anesthesia groups might look something like this:


Anesthesia Groups Wins

Split reimbursement for each provider (MD & CRNA). Anesthesia providers receive a 75/25 (MD/CRNA) split.
BCBS reimburses all cases using the same split without regard to medical direction. Anesthesia providers receive a unit rate of $54 or higher.
BCBS agrees to make the changes budget neutral for the anesthesia groups for the next 18 months. Anesthesia providers receive an automatic rate adjustment no later than 18 months following this proposed change.

 If a reasonable Win-Win is not achieved between BCBS and the anesthesia groups, the hospital can expect to receive a request for additional financial support for the anesthesia group.


 Change is coming… those anesthesia group practices that are most knowledgeable about the proposed changes and how they will impact their group, will be in a better position to negotiate a favorable contract with one of the largest commercial payer in the market.  For the rest of the US, be prepared for similar reimbursement changes by other BCBS state plans.

Balance Billing Legislation is Spreading from California

California’s high court ruled that emergency-room patients can no longer be billed byGavelFive doctors and hospitals for care that isn’t fully paid by their health plans. Texas and Louisiana have similar legilation pending but with more sweeping coverage for pathologists, anesthesiologist, radiologists and emengency medicine providers.

Balance billing tends to be defined in the debate as the practice of out-of-network physicians billing a patient for the difference, or “balance”, between what the health plan pays for out-of-network services and the physician’s fee. Legislative proposals to eliminate balance billing tend to cast the practice in the same light as insurance fraud, with attendant civil fines and licensing sanctions. Physician-friendly legislation that addresses the subject would require payors to fully reimburse providers for most out-of-network services, regardless of the charges.

Anesthesiologist, Radiologists, Pathologist and Emenecency Medicine physicans will be severely impacted by his new legislation. It will mean that the leverage that they once had to negotiate higher rates with insurance payers has been eliminated.  This is just one more parameter forcing these physicians to require more financial subsidies from the hospital to maintain their present income levels.

Immediate Implications from this loss in income stemming from the ruling could exacerbate challenges at hospital EDs and discourage medical specialists from accepting emergency cases. This could also cause a movement of physicians into states that do not have  restrictions on their ability to earn a market competitive wage.