As payers tighten the screws on anesthesia coverage, leaders say the biggest threats aren’t just lower rates — they’re new tactics that quietly strip away units, modifiers and timely payment.
From eroding Medicare and Medicaid conversion factors to network narrowing and bundling strategies, these are the payer trends concerning eight anesthesia leaders the most.
Editors’ note: Responses were edited lightly for clarity and length.
Question: What payer trend or tactic is most concerning to you right now when it comes to anesthesia reimbursement or coverage?
Michael Bernard, MD. Anesthesiologist and Chief Medical Officer of Ambulatory Anesthesia Solutions (West Bloomfield Township, Mich.): While there are many reimbursement pressures in anesthesia, the most concerning trend is the ongoing decline in Medicare anesthesia unit reimbursement. Medicare often reimburses one-third (or less) of what a typical commercial payer pays for the exact same anesthesia service, and the effective rate continues to erode year after year.
At the same time, Medicare patients are often older, sicker and more resource-intensive, which increases clinical complexity while reimbursement moves in the opposite direction. This widening mismatch is a major driver behind the surge in anesthesia stipend requests from ASC-based anesthesia groups, especially as more procedures become eligible for the ambulatory setting.
In my view, when a facility has a meaningful Medicare percentage, even highly efficient ASCs will struggle to overcome the reimbursement gap. In many cases, a stipend becomes not a preference, but a financial necessity to ensure adequate anesthesia coverage.
Barry Brasfield, MD. Anesthesiologist at Scope Anesthesia of North Carolina (Charlotte): Payers are increasingly looking for opportunities to slowly squeeze reimbursement for anesthesia services, e.g., through eliminating adjustments for ASA status, or decreasing unit charge allowances for CRNA services; combined with leveraging the No Surprises Act to “slow pay/no pay” for services, increasing the time between date of service and payment for services (increasing the anesthesia companies’ days in AR for their revenue).
Antonio Hernandez Conte, MD. Past-president of the California Society of Anesthesiologists: The current payer trend that is most alarming is the mandatory requirement for practitioners to sign “in-network” agreements, despite severely reduced reimbursement levels. This practice particularly impacts hospital-based specialists and practitioners, particularly anesthesiologists, radiologists and emergency room physicians. Additionally, access to non-hospital based practitioners will become more challenging as patients find many specialists are forced to out-of-network panels.
Corey Koenig, MD. Vice President of Operations at Providence Anesthesiology Associates (Charlotte): At a high level, payers will continue to narrow their networks and drive down overall rates in attempts to favor themselves under the No Surprises Act. Fortunately, the data continue to show physician groups winning in the 80% plus rates. As the process has become a bit less cumbersome and companies specializing in this process emerge, I believe the insurers are starting to see it as a losing game, and the intent of the law would be that they would be incentivized to make a reasonable in-network agreement. Instead, they have pivoted to penalizing the facilities for having out-of-network providers. I will remain cautiously optimistic at the moment that there is some momentum from politicians to fight this newest tactic. The other thing on the radar is a continued change in their internal coverage policies to financially favor them. These include not paying for modifiers, bundling of ultrasound charges and the newest attempts to bundle nerve blocks with certain procedures.
Andrew Leibowitz, MD. Chair of Anesthesiology at the Mount Sinai Health System (New York City): Medicaid and Medicare account for nearly half of all patients. In most states, the Anesthesia Medicaid Conversion Factor has been flat for many years, and in New York State, it is $10.00 unit, or the equivalent of $40 per hour. The Medicare Conversion Factor has remained with little change for more than 20 years, and adjusted for inflation has decreased by much more than 50%. Commercial payers unilaterally change policy. Examples include their decision to not pay for physical status modifiers 3, 4, 5 and ages less than 1 and older than 70. Patients who are sicker, very young and very old are harder to take care of, require more expertise, and deserve to have their care reimbursed at a higher rate. Commercial payers are also attempting to not pay for anesthetic time that exceeds a certain predetermined limit; this is illogical and unacceptable.
John Prunskis, MD. Medical Director and Principal at Illinois Pain and Spine (Chicago): For anesthesiologists specializing in interventional pain procedures, ongoing reductions in reimbursement rates are significantly limiting patient access to necessary treatments.
Also, with the increased amount of pre-certifications, back-office work, denials, having to provide letters of medical necessity, personnel issues, etc., small interventional pain practices have difficulties that larger, well-run interventional pain practices don’t.
Additionally, the persistent inequity in site-of-service reimbursement between hospitals and ASCs results in inefficient use of healthcare resources. Aligning payment structures across care settings could promote cost savings for both patients and employers while ensuring equitable access to high-quality care.
Michael Schostak, MD. Vice President of Physician Services at NorthStar Anesthesia: To be honest, I’m not that concerned about payer tactics. I think the adversarial relationship itself is part of what’s getting us in trouble. We should be focused on healthcare costs across the board.
We’re approaching 19% of GDP on healthcare spending. That’s not sustainable. When we push for higher unit costs without improving value, those costs get passed on, and we end up pricing patients out of coverage. We can do better.
The answer isn’t to blame payers — it’s to work with them. Anesthesia touches some of the most important financial levers in healthcare: length of stay, PACU throughput and day-of-surgery cancellations. I’d like to see contracts where we’re rewarded not just for doing cases, but for pulling those levers to bring down the total cost of an episode. That’s how we protect patients and become responsible stewards of healthcare resources.
Adam Spiegel. Chief Executive Officer of NorthStar Anesthesia: Payers are increasingly relying on differing reimbursement policies, unilaterally shaping how providers are paid. For example, over the past year, several payers implemented policies that cap reimbursement for services by CRNAs at 85%. Others have introduced limits on reimbursable anesthesia time in medical cases and removed physician billing modifiers that provide critical information about case complexity and circumstances, potentially affecting accurate payment. If these tactics continue or accelerate, health systems, providers and patients could unduly bear increased costs, threatening the delivery of high-quality care.
