Anesthesia Groups Response to COVID-19 (part1)

Impact on Manpower and Staffing

Right-sizing the staff of an anesthesia practice is probably the greatest challenge you will face during this COVID-19 outbreak.  Since your staffing must be proportionate to the volume of anticipated surgical work, this virus poses a huge problem on two levels.  First, what is the right staffing for anticipated case volume for the next few months and how does one change the staffing model so quickly?  Nothing is more painful than having to lay off staff, especially if they will be needed later in the year.  Unfortunately, not many practices can carry unneeded personnel for more than a few weeks.

To this end, I have the following suggestions many of our clients are exploring various options to avoid mass lay-offs.  Here are some of the options being discussed:

• Asking staff to use their accrued PTO time
• Giving staff the option of shifting from salaried status to hourly with reduced hours (with a minimum guaranteed number of hours)
• Extensive furloughs (leave without pay, with a position held open for the employee’s return)
• Exploring other options within the facility, such as ICU care and respiratory management
• Exploring changing the 401K to allow employee loans or withdrawals without plan penalties (federal and state taxes and penalties still apply).

The anticipated surgical volume is the key. No cases, means you need to reduce staffing. The staff should know what the plan is and what is expected of all providers to get through this crisis.  We are actively working with our clients to assist with the formulation of a plan to insure the long-term viability of the groups we service.

Maximizing Available Cash Flow

In an effort to minimize the disruption to your staff, and to avoid mass lay-offs and to shorten the long term impact to the business, many of our clients are exploring financial mechanisms that will allow them to weather this current storm.

In cash flow projections, many groups are contacting their accountants, third-party administrators and legal counsel to understand the following specifics for their practice:

• What profit sharing or 401k contributions is the group required to make, and can that timeline be extended? Many groups fund generous profit-sharing contributions early in the year. With appropriate tax planning, this deadline can often be extended into the fall.
• Can the group obtain or expand a line of credit? While available cash may only sustain the groups for a couple of weeks, a line of credit will help many groups continue to fund some payroll when the reduced cash flow is realized.
• What provisions exist in their hospital contracts that will be trigged by this predicted reduction in volume? Many client contracts contain revenue guarantees that are reviewed periodically throughout the year. Understanding what triggers these clauses and working with the hospital during these challenging times could allow the group to collaborate with the hospitals when and if emergency funds become available.
• What expenses can be eliminated of decreased temporally?

Other Clinical Options

In some facilities there is a discussion of anesthesia staff helping manage an increase in COVID-19 patients suffering from respiratory complications.  This would essentially represent ICU level services.  These involve a very different billing mechanism for that applicable to anesthesia.  Physician providers can bill either ICU codes (99291 and 99292) or subsequent hospital visit codes.  Payment for these codes is less than for anesthesia services.  Providers exploring such an option should carefully evaluate the specific requirements and clearly understand the documentation issues before proceeding.