Anesthesiology Physician & CRNA Compensation Arrangements
October 4, 2023
Written by James Tekippe, CFA, Michael Schenck, and Ryan Diver
The following article was published by Becker’s ASC Review.
The No Surprises Act was a landmark piece of legislation aimed at protecting patients from unexpected medical bills. Although the law is a significant step forward for patient protection, it has resulted in a significant increase in financial support requests from anesthesia providers who serve patients at ambulatory surgery centers (ASCs). This article will outline the hallmarks of the act, its impact, and the operational and compliance considerations for ASCs that need to implement coverage arrangements with their anesthesia groups.
Prior to the No Surprises Act, patients who unintentionally received care from an out-of-network provider could potentially have received a “surprise medical bill” from a facility or provider. This occurred in emergency room situations where the patient had no ability to select the emergency room, physician, or ambulance provider. Additionally, surprise bills resulted from services provided at an in-network facility for a patient but from an out-of-network provider. This was common for services provided by anesthesia, first assist, and radiology providers.
Additionally, healthcare costs and pricing information were often difficult to obtain prior to receiving treatment, and patients frequently faced challenges in understanding the cost implications of their healthcare choices. Moreover, billing disputes between healthcare providers and insurance companies often left patients caught in the middle. Consequently, surprise medical bills could result in higher fees for patients in a couple of ways. First, higher cost sharing between health plans and patients, with most patients having to pay a higher co-pay for out-of-network services. Second, many providers would balance bills, which allowed “the out-of-network provider [to] bill consumers for the difference between the charges the provider billed, and the amount paid by the consumer’s health plan.”
Due to these circumstances, the No Surprises Act was passed as part of the Consolidated Appropriations Act, 2021 and began taking effect on January 1, 2022. Now after a patient receives care, the healthcare provider will verify the patient’s insurance and determine if they are in-network or out-of-network. If the patient receives care from an out-of-network provider at an in-network facility, the patient is only responsible for their in-network cost-sharing amount, such as deductibles, co-pays, or coinsurance. The provider will then bill the insurance for their services. After the insurance company processes the provider’s claim, the patient will then be billed for their responsibility for the in-network cost-sharing amounts. If there is a dispute between the provider and the insurance company regarding reimbursement for out-of-network services, the provider and insurance company may engage in the independent dispute resolution (IDR) process, where an independent arbiter reviews the case and determines the appropriate payment.
The implementation of the act has caused tension between providers and insurers. Prior to the act, many providers had relied on balance billing to generate revenue. Now, not only is this practice illegal in certain scenarios, but insurance companies are typically only willing to pay something near the qualified payment amount (QPA), which is the median rate for those in-network services for the given geographical area. This can neglect crucial factors and can be very different from the amount they were used to receiving. This has resulted in numerous providers and payers entering negotiations and the IDR process.
Given the reduction in billings that some provider groups may be experiencing because of the No Surprises Act, anesthesia groups with coverage arrangements with ASCs have found themselves requesting additional compensation. For some ASCs, this is a request they are grappling with for the first time. It is very important to understand that these arrangements are set at fair market value from a compliance perspective. To help navigate these arrangements, VMG Health has outlined some important factors for ASCs to consider.
When establishing an arrangement for coverage to be supplied by an anesthesia group, it is important for ASCs to understand what level of coverage they will need. This includes a consideration of on-site time needed versus off-site or on-call time. Additionally, it is important to establish the need for medical directorship or other administrative services with a provider group, including an expectation of hours for these roles.
Facilities should consider what types of providers are needed and should confirm with the provider group that this level can be supplied. Leaning on certified registered nurse anesthetists (CRNAs) can be beneficial from a cost perspective for both the provider group and the facility, but the facility should ensure the mix is appropriate for the coverage needed. As provider compensation is typically the largest expense driver in coverage arrangements, it is, of course, important to ensure the right level of expertise is provided. However, the ability to lower provider expenses by leaning on CRNAs should not be overlooked.
As the industry continues to shift towards value-based care, certain quality incentives may be considered for inclusion in a coverage arrangement. Facilities contemplating adding these types of metrics should push for outcomes-based metrics that the providers will have the ability to demonstrably impact. Additionally, facilities should ensure that accurate tracking of outcomes is possible and that targets require the attainment of higher quality versus maintenance of current outcome achievements.
To service a coverage arrangement, provider groups typically will need to incur some additional costs beyond provider comp expenses, including billing and collection expenses and general office support expenses. However, additional requirements might be needed from a facility. Therefore, facilities should work with groups to outline their needs to ensure the provider group is aligned with the expectations under the arrangement beyond the clinical provider requirements.
The No Surprises Act is a major step towards protecting patients from unexpected medical bills, but it presents significant challenges for healthcare providers. Providers must adapt to the new law’s requirements, which can be time-consuming, costly, and complicated. While providers will need to be proactive in addressing these challenges, facilities may be asked to provide further financial assistance in certain arrangements. Having open and thorough conversations about the needs of the facility, while balancing the challenges faced by anesthesia groups, will be an effective way for facilities and providers to continue partnering to provide high-quality care for patients.