Following a webinar on anesthesia quality, Hugh Morgan, quality assurance officer for Somnia Anesthesia Services, answered a few questions on the future of anesthesia.
Q: Where do you see anesthesia heading over the next few years, and if there are changes, how fast will they happen?
Hugh Morgan: It's tough for any of us to have a crystal ball with the uncertainty of what's happening in health reform, but one thing we can be certain of is reduced payments for services. It will impact everyone — anesthesia practices, facilities and physicians in general. We have this current mantra of "do more with less," and we have to start thinking along those lines now to prepare for the future of health reform. We have to be scrutinizing our anesthesia services, making sure they're really best-aligned with the coverage areas required.
Because of the anesthesia economics of supply and demand, we will likely see more states "opt-out," which, for those who are not aware, gives CRNAs [the ability] to practice independently. The opt-out is determined through an appeals process and approval by a state's governor. As there is a continued scrutiny on cost, more states will likely continue to [opt out], thereby reducing overall expenses for anesthesia services.
The continued emphasis on a federal level on the importance of anesthesia quality has often been undervalued and overlooked, but it's now creeping into all the criteria that facilities [must] submit on an annual basis in order to receive annual CMS payment updates.
Q: Could you discuss how ACOs apply to and will impact the anesthesia practice?
HM: The concept on the federal level is to tie quality and outcomes to payments and to scrutinize cost for services and overall care, which finally [means] really valuing quality in anesthesia. [It will be about] how you're looking at quality and measuring it. There will be specific qualitative and quantitative measuring results and cost-sharing incentives in your particular regions, as we know from those who have already done research into ACOs. To the extent you can have an anesthesia service that's ahead of the curve [on ACOs], if you're providing in all those areas of quality and overall care [and measuring the provision of quality], you're well ahead of the curve.
Q: Regarding quality and accreditation compliance, it seems like it's becoming more difficult to meet all these requirements. How is a hospital expected to keep up with it all?
HM: At a minimum, hospitals and ASCs must conduct an annual review of the CMS Conditions of Participation, Interpretive Guidelines for Anesthesia. As we know, the CMS CoP is are the requirements that hospitals and ASCs have to meet in order to bill CMS patients. CMS has [added] interpretive guidelines that apply to specific clinical practice like anesthesia, and information on those guidelines is available via the web and CMS. It's a great guide for hospitals and ASCs to maintain a basic understanding of those requirements.
It's important to really have that collaborative transparent partnership with your anesthesia service, to sit down and review these requirements, to maintain a heightened status of compliance and risk avoidance and to hit all the regulatory and accreditory requirements.
Q: With declining revenues, how do you recommend anesthesia practices address compensation?
HM: As far as productivity-driven compensation models, the old adage is that if you've seen one … you've essentially seen one. They tend to be so varied, unique and specific to each practice so it’s difficult to apply them across the board. Besides, it's difficult for anesthesia because we generally don't have the ability to drum up our own business. We're care receptors in the sense of services we provide. We can't control that, so even volume does not necessarily help anesthesia unless it's the right kind with a good payor mix.
On average, Medicare payments for anesthesia tends to represent about 30 percent of what other specialties would normally receive from CMS for similar services. As an example, for a knee arthroscopy, where an orthopod might expect to be able to receive $1,000 on average from CMS, for anesthesia, it would be roughly 30 percent or $300 for providing services for that procedure. This is a huge financial challenge for anesthesia since for most groups, CMS payments represent 30-40 percent or more of their payor mix.
Furthermore, as it relates to staffing, it's nearly impossible to ensure that everyone has the same opportunities to generate revenue. Someone might do one or two cardiac cases in one room while someone else is doing a numerous GI cases in another room, and while not generating the same revenue, you can't argue which provider is more or less valuable to the practice based on his/her assignment for that day
As far as payment and compensation goes for anesthesiologists, it is clearly driven by locales and regions and basic economics of supply and demand, but as there is an increased use of CRNAs and potentially an increased number of opt-out states where CRNAs can provide independent care, we may see a lowering of anesthesiologist pay. Many facilities might look to more CRNA blended models or CRNA-heavy models with more limited MD usage.
Download Somnia's webinar, "What New Trends in Anesthesia Quality Will Mean to Your Bottom Line," here.
Learn more about Somnia Anesthesia Services.
Q: Where do you see anesthesia heading over the next few years, and if there are changes, how fast will they happen?
Hugh Morgan: It's tough for any of us to have a crystal ball with the uncertainty of what's happening in health reform, but one thing we can be certain of is reduced payments for services. It will impact everyone — anesthesia practices, facilities and physicians in general. We have this current mantra of "do more with less," and we have to start thinking along those lines now to prepare for the future of health reform. We have to be scrutinizing our anesthesia services, making sure they're really best-aligned with the coverage areas required.
Because of the anesthesia economics of supply and demand, we will likely see more states "opt-out," which, for those who are not aware, gives CRNAs [the ability] to practice independently. The opt-out is determined through an appeals process and approval by a state's governor. As there is a continued scrutiny on cost, more states will likely continue to [opt out], thereby reducing overall expenses for anesthesia services.
The continued emphasis on a federal level on the importance of anesthesia quality has often been undervalued and overlooked, but it's now creeping into all the criteria that facilities [must] submit on an annual basis in order to receive annual CMS payment updates.
Q: Could you discuss how ACOs apply to and will impact the anesthesia practice?
HM: The concept on the federal level is to tie quality and outcomes to payments and to scrutinize cost for services and overall care, which finally [means] really valuing quality in anesthesia. [It will be about] how you're looking at quality and measuring it. There will be specific qualitative and quantitative measuring results and cost-sharing incentives in your particular regions, as we know from those who have already done research into ACOs. To the extent you can have an anesthesia service that's ahead of the curve [on ACOs], if you're providing in all those areas of quality and overall care [and measuring the provision of quality], you're well ahead of the curve.
Q: Regarding quality and accreditation compliance, it seems like it's becoming more difficult to meet all these requirements. How is a hospital expected to keep up with it all?
HM: At a minimum, hospitals and ASCs must conduct an annual review of the CMS Conditions of Participation, Interpretive Guidelines for Anesthesia. As we know, the CMS CoP is are the requirements that hospitals and ASCs have to meet in order to bill CMS patients. CMS has [added] interpretive guidelines that apply to specific clinical practice like anesthesia, and information on those guidelines is available via the web and CMS. It's a great guide for hospitals and ASCs to maintain a basic understanding of those requirements.
It's important to really have that collaborative transparent partnership with your anesthesia service, to sit down and review these requirements, to maintain a heightened status of compliance and risk avoidance and to hit all the regulatory and accreditory requirements.
Q: With declining revenues, how do you recommend anesthesia practices address compensation?
HM: As far as productivity-driven compensation models, the old adage is that if you've seen one … you've essentially seen one. They tend to be so varied, unique and specific to each practice so it’s difficult to apply them across the board. Besides, it's difficult for anesthesia because we generally don't have the ability to drum up our own business. We're care receptors in the sense of services we provide. We can't control that, so even volume does not necessarily help anesthesia unless it's the right kind with a good payor mix.
On average, Medicare payments for anesthesia tends to represent about 30 percent of what other specialties would normally receive from CMS for similar services. As an example, for a knee arthroscopy, where an orthopod might expect to be able to receive $1,000 on average from CMS, for anesthesia, it would be roughly 30 percent or $300 for providing services for that procedure. This is a huge financial challenge for anesthesia since for most groups, CMS payments represent 30-40 percent or more of their payor mix.
Furthermore, as it relates to staffing, it's nearly impossible to ensure that everyone has the same opportunities to generate revenue. Someone might do one or two cardiac cases in one room while someone else is doing a numerous GI cases in another room, and while not generating the same revenue, you can't argue which provider is more or less valuable to the practice based on his/her assignment for that day
As far as payment and compensation goes for anesthesiologists, it is clearly driven by locales and regions and basic economics of supply and demand, but as there is an increased use of CRNAs and potentially an increased number of opt-out states where CRNAs can provide independent care, we may see a lowering of anesthesiologist pay. Many facilities might look to more CRNA blended models or CRNA-heavy models with more limited MD usage.
Download Somnia's webinar, "What New Trends in Anesthesia Quality Will Mean to Your Bottom Line," here.
Learn more about Somnia Anesthesia Services.