How is your anesthesia bill calculated?
An anesthesiologist’s bill depends on several factors, including:
- The duration of the anesthesia care
- The complexity of the surgical procedure
- The insurance status of the patient
Let’s look at each of these factors in turn:
1. The duration of the anesthesia care. Anesthesia provider bills are calculated by a simple formula:
Amount of Bill = (Number of Base Units + Number of Time Units) X the dollar value of a Unit.
Every anesthesia company assigns a monetary value to an anesthesia “Unit.” A “Unit” is a 15-minute length of time of anesthesia service. (The price of an anesthesia Unit varies. More on this topic later).
The total amount of an anesthesia bill depends largely on the duration of the anesthesia service, which depends on the duration of the surgery.
Anesthesia time begins when the anesthesia provider starts attending to the patient in the pre-operative area, and ends when the anesthesia provider transfers care to the post-anesthesia care unit (PACU) nurse or to the intensive care unit (ICU) nurse following the surgery.
For most surgeries, a typical timeline involves:
10-15 minutes of anesthesia exam in the pre-operative area,
5 minutes of time transporting the patient to the operating room,
5-10 minutes time inducing anesthesia,
10–40 minutes of time positioning, prepping, and draping the patient,
the entire surgical duration,
5-15 minutes of time to wake the patient up,
5-10 minutes of time to transport the patient to the PACU or ICU,
and 5-10 minutes time to sign the patient over to the nurse’s care in the PACU or ICU.
In the PACU, the anesthesiologist is responsible for the patient’s vital signs, pain control, nausea therapy, and the timing of the patient’s discharge from the PACU, even though the anesthesia billing time concluded when he or she signed the patient’s care to the PACU nurse. Typically the anesthesia provider returns to the pre-operative area to meet the next patient at this time, and the billing time for the next patient commences when the anesthesia provider begins attending to the next patient.
2. The complexity of the scheduled surgical procedure. The Base Unit value for any anesthetic varies with the complexity of the scheduled surgery. The Base Unit value can be as low as 3 Units for a simple procedure such as a finger or a toe surgery, or as high as 25 Units for open-heart surgery. The Base Unit values are cataloged in a publication called the ASA (American Society of Anesthesiologists) Relative Value Guide. The Base Unit value reflects the degree of work and risk involved in the anesthetic management for each type of surgery.
3. The insurance status of the patient. The United States government sets a cap on how much Medicare and Medicaid patients can be billed. The dollar value per anesthesia Unit is severely discounted for Medicare and Medicaid patients to a number as low as one-fourth to one-fifth the amount a non-Medicare or Medicaid patient is billed.
THE PRICE OF AN ANESTHESIA UNIT: The price of an anesthesia Unit is set by the billing anesthesiologist and his or her anesthesia company. The price tends to be higher in major metropolitan centers, lower in rural areas, and lowest for Medicare patients. The price of an anesthesia Unit may vary from as high as $140/Unit in a major metropolitan area to a low of $20/Unit for a Medicare or a Medicaid patient.
EXAMPLE: Let’s look at a sample bill for an elbow surgery. The Base Unit value for elbow surgery is 3 Units. The surgery time was 1 hour, but the total anesthesia time from pre-operative area to the PACU sign out was 1 hour and 45 minutes. One hour and 45 minutes equals 7 Time Units. Let’s assume a Unit value price of $90/Unit.
Using the formula above,
Amount of Bill = (Number of Base Units + Number of Time Units) X the dollar value of a Unit.
Amount of Bill = (3 Units + 7 Units) X $90/Unit = 10 X 90 = $900.
Will the anesthesia provider collect $900? Most likely not. Insurance companies negotiate with physicians, and the result of such negotiations may result in significant discounts paid on Unit values compared to billed rates. If the anesthesia group has a signed contract with an insurance company, the agreed reimbursement may be $60/Unit, and the maximal allowed bill would be $600.
In addition, if your insurance coverage requires you to pay for 20% of the bill, the insurance company may only pay 80%, or $480, and you will be expected to pay $120. If the anesthesiology company does not have a contract with the insurance provider, the insurance company will reimburse an out-of-network amount, usually less than the full $900, and you may be responsible for the balance of the bill (unless the anesthesia company is willing to discount the bill under these circumstances).
There are advantages of growing old. If you’re a Medicare patient, your anesthesia bill may total only $200:
(3 Units + 7 Units) X $20/Unit = 10 X 20 = $200.
COSMETIC SURGERY: Insurance companies do not pay for plastic surgeries such as liposuction, breast implants, or facelifts. Patients must pay the surgeon, operating room, and anesthesia bills in advance. Most anesthesiologists discount their customary rates in return for cash prepayment.
THE FUTURE: The nature of anesthesia billing may change in the future to embrace a concept known as “bundled payments.” Obamacare, or the Affordable Care Act, outlines provisions for bundled payments to hospitals rather than the traditional fee-for-service reimbursements described above. In a bundled payment model, the medical team will receive a lump sum from the government (or from an insurance company) for a surgical procedure. The medical center and physicians will negotiate and decide how to divide up the money between the surgeon, the anesthesiologist, and to the hospital (the hospital share will cover nurse salaries, technician salaries, supplies, and the overhead to run the hospital).
To date there is little data to support the advantage of bundled payments. The government hopes to save money by limiting what it pays out per procedure. Time will tell how prevalent this reimbursement model will be in the future of American healthcare economics.
When you buy retail goods, prices are available prior to purchase. With medical bills, you rarely know what the price of your medical care will be until you receive the bill weeks afterward. This is likely to change. There is momentum moving toward transparent pricing of medical fees, including listing of physician fees and facility fees prior to patient care. In the future you may have access to physician, hospital, and surgery center pricing to assist you in making your medical care choices.
SUMMARY: Your anesthesia bill will depend on how complex a surgery you are scheduled for, how long it takes to complete the procedure, and what kind of insurance coverage you have. Armed with this information, you may choose to contact your surgeon, the anesthesia company he or she works with, and your insurance company prior to your surgery to understand what your anesthesia bill is likely to be.
Published in September 2017: The second edition of THE DOCTOR AND MR. DYLAN, Dr. Novak’s debut novel, a medical-legal mystery which blends the science and practice of anesthesiology with unforgettable characters, a page-turning plot, and the legacy of Nobel Prize winner Bob Dylan.
In this debut thriller, tragedies strike an anesthesiologist as he tries to start a new life with his son.
Dr. Nico Antone, an anesthesiologist at Stanford University, is married to Alexandra, a high-powered real estate agent obsessed with money. Their son, Johnny, an 11th-grader with immense potential, struggles to get the grades he’ll need to attend an Ivy League college. After a screaming match with Alexandra, Nico moves himself and Johnny from Palo Alto, California, to his frozen childhood home of Hibbing, Minnesota. The move should help Johnny improve his grades and thus seem more attractive to universities, but Nico loves the freedom from his wife, too. Hibbing also happens to be the hometown of music icon Bob Dylan. Joining the hospital staff, Nico runs afoul of a grouchy nurse anesthetist calling himself Bobby Dylan, who plays Dylan songs twice a week in a bar called Heaven’s Door. As Nico and Johnny settle in, their lives turn around; they even start dating the gorgeous mother/daughter pair of Lena and Echo Johnson. However, when Johnny accidentally impregnates Echo, the lives of the Hibbing transplants start to implode. In true page-turner fashion, first-time novelist Novak gets started by killing soulless Alexandra, which accelerates the downfall of his underdog protagonist now accused of murder. Dialogue is pitch-perfect, and the insults hurled between Nico and his wife are as hilarious as they are hurtful: “Are you my husband, Nico? Or my dependent?” The author’s medical expertise proves central to the plot, and there are a few grisly moments, as when “dark blood percolated” from a patient’s nostrils “like coffee grounds.” Bob Dylan details add quirkiness to what might otherwise be a chilly revenge tale; we’re told, for instance, that Dylan taught “every singer with a less-than-perfect voice…how to sneer and twist off syllables.” Courtroom scenes toward the end crackle with energy, though one scene involving a snowmobile ties up a certain plot thread too neatly. By the end, Nico has rolled with a great many punches.
Nuanced characterization and crafty details help this debut soar.
Click on the image below to reach the Amazon link to The Doctor and Mr. Dylan:
Learn more about Rick Novak’s fiction writing at ricknovak.com by clicking on the picture below: