MAKING DOLLAR$ AND $ENSE

Transcription

1 MAKING DOLLAR$ AND $ENSE FROM A CARDIAC ANESTHESIA PRACTICE Christopher A. Troianos, MD Professor and Chair of Anesthesiology Western Pennsylvania Hospital West Penn Allegheny Health System Western Campus of Temple University School of Medicine Pittsburgh, Pennsylvania OBJECTIVES: At the conclusion of this lecture, the participant will be able to: 1. identify the expected billing units that would be generated from common cardiac anesthesia cases; 2. discuss common pitfalls related to billing for cardiac anesthesia cases, including billing for intraoperative TEE services; 3. translate these expected anesthesia billing units into expected revenue based upon different conversion factors that depend on the payor mix or service contracts; 4. identify expected expenses incurred from a typical cardiac anesthesia practice using the most recent SCA cardiac anesthesia salary survey; 5. discuss strategies for closing the gap when expenses exceed revenue. BILLING FOR CARDIAC ANESTHESIOLOGY SERVICES Billing for anesthesiology services in general (including cardiac anesthesiology) differs from other medical specialties in that time directly influences the amount the patient or third party insurance carrier is billed. For example, surgeons bill for an aortic valve replacement using relative value units (RVUs) independent of the duration of the cardiopulmonary bypass time or entire cardiac surgical procedure. Anesthesiology billing in contrast, is based on ASA units that include base units plus time units. The base unit component of the bill is based on the complexity of the case, while the time unit component is based solely on 15 minute time periods. The implication for anesthesiology billing is that our charges are higher for longer cases than for shorter cases. It would appear that a cardiac anesthesia practice would be more profitable than an outpatient anesthesia practice because the cardiac cases not only produce more base units, but these cases are generally longer, meaning that these cases also produce more time units. This perspective is also promulgated because the hospital and surgeons receive more reimbursement for more complex cases. But on closer analysis, longer cases ARE NOT financially beneficial for anesthesiology. We actually bill more units overall by providing more care for many short cases, than for fewer longer cases. Take for example, a 6-hour re-do CABG generating 44 total (base plus time) units during an 8 hour day, compared to doing eight 45 minutes long knee arthroscopies with 15 minute turn-over times. The 8 outpatient knee arthroscopies will generate

2 56 units, while the re-do CABG case will generate 44 units. When you consider the difference in the Conversion Factor (CF) between typical Medicare and Commercial insurers, the difference in revenue generation is even more dramatic ($880 vs. $3,360, respectively see table below). Cardiac Anesthesia Case Base Units Time Units (hrs) Total Units CF $ Total 8-Hr Day Primary CABG (4) $680 $1,360 Valve (uncomplicated replacement) (4) $720 $1,440 Valve/CABG, re-do CABG (6) $880 $880 8-hour re-do CABG (8) $1,040 $1,040 Off pump CABG (3) $740 $1,480 Heart and/or Lung Transplant (8) $1,140 $1,140 (Knee arthroscopy comparison) 4 3 (0.75) 7 60 $420 $3,360 Because expenses are generally considered on an hourly basis, it is helpful to consider revenue generation per hour. The 6-hour re-do CABG case will generate $110/hr for an 8-hour shift, assuming the provider does not do another cardiac case for the balance between the end of the 6 hour re-do CABG and the end of the 8-hour shift. Even if the re-do CABG lasted 8 hours, the redo CABG only generates $130/hr. During the same time, the knee arthroscopy room generates $420/hr for an 8-hour shift. The scenario worsens if the longer cases generate over-time expenses for working beyond the regular shift by incurring a further loss on the expense side of the equation. A CRNA would typically be paid 1.5 times their normal hourly rate for working beyond their scheduled shift, while the reimbursement remains at the rate of time units alone. In the case of a Medicare patient with a $20 per unit conversion factor, revenue generation remains at ($20 x 4 =) $80 per hour, while a $67 per hour CRNA would incur $100/hr in expense costs at 1.5x/hr in overtime costs. BILLING FOR ADDITIONAL CARDIAC SERVICES Cardiac anesthesiology services typically (but not routinely) include revenue for certain procedures such as insertion of arterial, central venous, and pulmonary artery catheters. Billing for these procedures follows the same rationale as billing for surgical services, in that payment is made for the procedure, rather than for time plus base units. Therefore, anesthesia billing for placement of these invasive catheters cannot include anesthesia time while performing these procedures because clinicians are paid for the procedure (akin to surgeons) with no regard to the time it takes to perform the procedure. Placement of arterial, central venous, and pulmonary artery catheters generate unit values as indicated in the following table. Invasive Monitor Procedure Billing code Units Arterial catheter - percutaneous Arterial catheter cut-down Central venous catheter patient 5 years Central venous catheter patient < 5 years Pulmonary artery catheter placement Ultrasound-guided vascular access PA catheter placement with fluoro

3 Transesophageal echocardiography may also generate additional revenue when used for appropriate medical indications, and when billing requirements are fulfilled. The most common TEE procedures and CPT billing codes are listed in the table below: TEE Procedure CPT code Units Probe placement, image acquisition, interpretation, & report Placement of TEE probe only Image acquisition, interpretation, and report only Probe placement, image acquisition, interpretation, & report (congenital) Placement of TEE probe only (congenital) Image acquisition, interpretation, & report only (congenital) Reimbursement for intraoperative TEE is dependent on third party payer contracts and on the geographical region. Many third party payers have adopted the following Center of Medicare Services (CMS) policy that defines reimbursable indications for intraoperative TEE: The interpretation of TEE during surgery is covered only when the surgeon or other physician has requested echocardiography for a specific diagnostic reason (e.g., determination of proper valve placement, assessment of the adequacy of valvuloplasty or revascularization, placement of shunts or other devices, assessment of vascular integrity, or detection of intravascular air). To be a covered service, TEE must include a complete interpretation/report by the performing physician. Coverage for evaluation, however, is not allowed for monitoring, technical trouble shooting, or any other purpose that does not meet the medical necessity criteria for the diagnostic test. FACTORS THAT DETERMINE ANESTHESIA REIMBURSEMENT Hourly revenue per single anesthetizing location can vary between $190 for great payer mix to $73 for poor payer mix as indicated in the examples below of various complements of commercial, government, and indigent care. Carrier Commercial MediCAID MediCARE Not insured Average CF Hourly Revenue (CF x 4) CF $60.00 $15.00 $20.00 $0.00 Great mix 70% 2% 26% 2% $47.50 $190 Mid mix 35% 20% 40% 5% $32 $128 Poor mix 10% 35% 35% 20% $18.25 $73 The hourly revenue in the above table reflects compensation only for time units. More complicated cardiac surgical cases have relatively more base units per case, but this benefit proportionally diminishes the longer the case. If second cases can t be accomplished in the same anesthetizing location because first cases are prolonged, the base units from the second cases may not be generated on a daily basis, and significant daily revenue is not realized. Alternatively,

4 if cases finish late beyond the scheduled shift, it may be more costly to do the case on the same day than on another day because the revenue generation per hour may not cover the costs of the personnel working beyond their shift. For example, a poor payer mix generates $73/hr in revenue, but may cost $100/hr for CRNA working over-time. These over-time costs are not incurred when salaried employees such as residents staff cardiac rooms, or when CRNAs are scheduled in a manner that does not generate over-time wages. As an example, scheduling CRNAs in 10 or 12-hour shifts for cardiac rooms, allows two cases to be performed in one room without incurring over-time expenses. DETERMINATION OF EXPENSES The primary determinants of anesthesiology service expenses are: 1. simultaneous clinical sites 2. staffing ratio (concurrency) 3. call responsibilities The vast majority (88%) of cardiac anesthesia services are provided with 1:1 or 1:2 staffing ratios according to the most recent (2010) SCA cardiac anesthesia salary. While 44% of respondents personally performed cardiac anesthesia services, 24% medically directed 1:1, and another 20% directed 1:2. Eight percent medically directed 1:3, while only 4% directed 1:4. Call coverage utilizes 3.2 FTE if you consider 24 hours of call x 7 days per week, and back out the 40 daylight hours Monday through Friday. Revenue generation during call is quite variable, as there could be a single long case during the night (e.g. transplant or dissection), several cases (with more base units), or no cases (nor revenue) nightly and during weekends. Availability carries a fixed expense, but variable revenue depending on the arrangement. MARKET DEMAND FOR CARDIAC ANESTHESIA SERVICES An annual survey of academic chairs conducted over the past 10 years indicates a continued demand for anesthesiologists overall with a 7% vacancy per department.

5 Although this data does not specifically query openings for cardiac anesthesiologists, they are generally in greater demand than generalists because of the required expertise to also provide TEE services. This relatively higher demand for cardiac anesthesiologists drives higher salaries necessary to attract and retain cardiac anesthesiologists within a department. Other factors include geographic location and practice environment. For example, hiring the first cardiac anesthesiologist to a new cardiac surgical service may demand a higher salary than hiring the tenth who will share the call burden with 9 other cardiac anesthesiologists. The 2010 SCA cardiac anesthesia salary survey indicted median salaries for cardiac anesthesiologists between $400,000 and $450,000 with 75 th percentile salaries approaching $500,000 in private practice settings. The payer mix of cardiac surgical patients generally favors a higher component of Medicare patients, which means that the clinical revenue will not support the salaries created by the market demand. Institutional or hospital support is necessary to close the gap between salary expenses and clinical revenue. The following table indicates the revenue, institutional support and expenses of academic anesthesiology departments annually during the past 10 years. Cardiac anesthesia is one component of these anesthesia departments that may include support for other subspecialists within the practice of anesthesiology. A recent Society of Academic Anesthesia Chairs survey queried the additional compensation required for recruiting and retaining anesthesiologists with subspecialty expertise. The two highest paid subspecialists in the survey were cardiac and pain. Departments paid up to $125,000 additional salary compensation for cardiac anesthesiologists, and up to $60,000 additional for pain specialists relative to salaries for generalists. The problem with the supply-demand imbalance necessitating higher salaries to recruit and retain anesthesiologists, is that clinical revenue for cardiac work has not changed appreciably, especially in practices with a significant component of Medicare and Medicaid (CMS) insured patients. Whereas CMS pays other specialists up to 80% of commercial rates, anesthesiology is

6 paid about 20% of commercial rates. This explains why institutional support has increased over the last 10 years, namely salaries have gone up due to high demand, but clinical revenue for the same work has remained stagnant. THE GAP BETWEEN REVENUE AND EXPENSES The above discussion provides the reader with the necessary tools to calculate expected revenue based upon payer mix, type of cardiac cases, and case volume. Expenses are based upon the expected salaries for cardiac anesthesiologists, while the total expenses are based upon how many cardiac anesthesiologists are needed to provide the service, and whether the practice model is medical direction of residents and CRNAs, or personally performed cardiac anesthesia services. A gap between revenue and expenses would not be surprising depending on volume and payer mix. If expenses exceed revenue, the gap will need to be covered by interested stakeholders. This may become transparent in the near future with the development and promulgation of the Accountable Care Organization (ACO) model. One payment to the ACO will be locally distributed with the revenue-expense gap being absorbed within the ACO.