After significant pushback from providers and the general public, Anthem Blue Cross Blue Shield has recently reversed its decision on a controversial anesthesia reimbursement policy update that would have introduced a new reimbursement structure based on CMS physician work time values.
Similarly, Kaiser Foundation Health Plan has also walked back on a proposed change to anesthesia reimbursement in Washington state. Under the reversed policy, Kaiser Foundation Health Plan of Washington and Kaiser Foundation Health Plan of Washington Options would have ceased reimbursing anesthesia services if submitted without the appropriate modifiers indicating who performed the service. Additionally, the plans had reduced payments for QZ services provided by certified registered nurse anesthetists to 85% of the physician fee schedule.
The push to cut anesthesia reimbursements is not new. Medicare's average anesthesia rate for 2023 was $21.88, a 5.5% decline from 2019, according to an analysis by Coronis Health. Another analysis, from VMG Health, found that Medicare reimbursements for anesthesia services decreased from $22.2730 per unit in 2019 to $21.1249 in 2023 under CMS' final rule.
The potential impact of reimbursement cuts can be seen in Ohio, where Anthem adopted a flat fee structure for endoscopy procedures in 2012. Jay Weller, MD, anesthesiologist at Cincinnati, Ohio-based Seven Hills Anesthesia, joined Becker's to share insights into the long-term implications of these policies.
This model led to significant disparities in provider compensation, Dr. Weller said. It meant that anesthesia providers received the same pay for a 15-minute upper endoscopy as for a two-hour endoscopic retrograde cholangiopancreatography, disproportionately affecting practices handling complex, high-acuity cases.
"While that flat fee may have been adequate for a short case, it was not for a lengthy or complex one," Dr. Weller said. "Practices based entirely in outpatient settings with straightforward cases may have done okay or even benefited… It felt upside down — penalizing those who provide care for the most vulnerable patients."
These repeated attempts to cut anesthesia reimbursements have intensified the already critical shortage of anesthesia providers, leaving many practices strained.
"The biggest impact is in regions where Anthem Blue Cross Blue Shield has [cut anesthesia reimbursements] is that it’s made it more difficult to recruit anesthesia providers," Brian Cross, CRNA, owner of Youngstown, Ohio-based CS Anesthesia, told Becker's. "The income from these procedures goes down, probably by 30 to 40%, compared to what we get from Cigna, United Healthcare or Medical Mutual for the same procedures. Anthem is really leading the charge in cutting reimbursement for anesthesia, whether it’s anesthesiologists or CRNAs."
Mr. Cross added that in the long term, he foresees anesthesia groups opting to go out of network and charge patients directly.
"In the next five to ten years, large groups may exit insurance networks altogether," he said. "They’d bill patients, who would then have to fight to get reimbursed by their insurers. It’s not unlikely."
Dr. Weller noted that this behavior is part of a broader trend, with many insurers unilaterally rewriting reimbursement norms every few years.
"Many of these payer maneuvers to reduce reimbursement clash with inflation — general inflation, healthcare inflation and particularly anesthesia inflation, which has skyrocketed due to a massive shortage of anesthesia providers," he said. "This creates an unsustainable gap as payers push down reimbursement while professional compensation soars."
This pattern of payers is consistent, Dr. Weller said, and it appears that many insurers adopt a strategy of unilaterally rewriting reimbursement norms every few years.
"Recently, other insurers have also begun to implement unilateral efforts to rewrite the norms that have defined reimbursement for anesthesia services for more than 30 years, he said.
This shortage is affecting all of healthcare. In July, Becker's reported on five hospitals that had delayed or canceled surgeries due to anesthesia provider shortages or compliance issues.
"Anesthesia used to be a seemingly unlimited commodity," Jeff Dottl, principal at Ventura, Calif.-based Physicians Surgery Centers, told Becker's last year. "They were lucky to be invited to work at your surgery center. The tables have turned, and now if centers have anyone to cover anesthesia, it usually comes at a hefty price."
While Anthem and Kaiser’s reversals provide temporary relief, the underlying tension between payers and providers remains a pressing issue for anesthesia providers as a whole.