Anthem canceled ‘unprecedented’ anesthesia payment plan, but controversy remains

The fight between payers and anesthesiologists isn’t over, despite Anthem Blue Cross Blue Shield (BCBS) reversing plans for a policy that would put time limits on commercial claims for anesthesia coverage.

The policy would have set a time limit for claims by procedure, with the exception of maternity and pediatric care, in New York, Connecticut, and Missouri starting next year. It called for providers “requiring more time than set or recommended by these standards” to undergo the insurance company’s claim dispute process in order to get paid, according to a statement Anthem provided to FOX61 in November.

The plan received backlash from everyone, from anesthesiologists to New York Governor Kathy Hochul.

Anthem retracted the policy on December 5 as a result of what the company called a “misinterpretation” in a statement on its website.

This scuffle highlights a bigger issue, however: a longstanding debate between providers and payers about how much pay anesthesiologists deserve.

‘Unprecedented’ approach

In its original statement, Anthem said it planned to use Centers for Medicare and Medicaid Services (CMS) “physician work time values” to determine how long procedures were supposed to take, turning that into a cap on how much time providers could bill them for.

This approach would have been “unprecedented,” Robert Berenson, a physician, Urban Institute fellow, and health policy researcher, told Healthcare Brew.

Anesthesiologists are currently paid by CMS and some other payers through a system established in 1992 known as the resource-based relative value scale (RBRVS), according to the American Medical Association. This payment scale is based on formulas that take into account factors such as time, cost, and skill.

CMS publishes time estimates for specific services based on physician surveys, according to a 2020 assessment of the system published in JAMA Surgery. But time estimates are intended as guidance, not limits for payment, Berenson said.

A CMS spokesperson confirmed to Healthcare Brew that “generally, Medicare covers anesthesia without specific time limits.” It pays for anesthesia in 15-minute increments in addition to a fixed payment based on the procedure’s complexity, and does not have a time-limited payment scheme like the one Anthem proposed.

Anthem blames overbilling

In its original statement to FOX61, Anthem reportedly said its policy was a way to “safeguard against potential anesthesia provider overbilling.”

Berenson said insurance companies have long lamented high bills from anesthesiologists, who are among the top-paid specialists averaging $472,000 a year, according to MedScape’s 2024 Anesthesiologist Compensation Report. (For comparison, orthopedists, the top-paid specialists, take home $558,000, whereas diabetes and endocrinology providers, the lowest-paid specialists, net $256,000.)

“I understand why an insurance company would want to put a limit on [payment], but what they came up with just isn’t the way to do it,” he said.

Costs past the predetermined time limit likely wouldn’t have been patients’ responsibility, he noted, but instead would fall to the anesthesiologist or hospital. “That means that the doctors who aren’t gaming the system would be penalized equally with those who are,” Berenson said.

Anesthesiologists cry foul

Though the policy has been nixed, the American Society of Anesthesiologists (ASA) has called it a symptom of a larger problem.

“Anthem’s recent policy proposal reflects a larger trend among commercial health insurers to unilaterally undercut established anesthesia billing and payment norms,” the organization wrote in a December 6 statement on its website.

In July, BCBS and Aetna commercial plans stopped paying anesthesiologists based on “physical status modifiers” in some states, which varied according to the plan. Effective November 1, Anthem stopped paying for several “qualifying circumstances” codes in anesthesiology.

In both instances, these were additional payments based on the medical complexity or morbidities of patients, which influences the difficulty of an anesthesiologist’s job, ASA wrote.

Medicare payments to anesthesia providers also fell by roughly 21% from an average of about $272.08 for most procedures in 2000 to $215.55 in 2020 when adjusting for inflation, an October study in the Journal of Clinical Anesthesia found.

“These insurance policy decisions targeting anesthesiologists and anesthesia services provided to patients are not cost-saving solutions. Rather, they serve to shift costs from the insurers to hospitals, physicians, and patients,” ASA’s press release read.