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Episode 88: How Do Anesthesia Practices Get Paid? Explained By An Expert! w. Devona Slater

Mar 8, 2021

This Episode

Interview w/ Devona Slater

You Will Learn

– Why Devona has spent 30 years fighting on behalf of physicians when it comes to clinical decisions made for economic outcomes
 
– The importance of closing a case and billing before breaking away due to other events (vacation, life events, etc.)
 
– What you need to understand about a master contract and how it will change in the next 12 months

Resources & Links

In this episode we unravel the tangled web of payment for anesthesia services. It’s no secret that healthcare billing is incredibly complicated, and anesthesia has its own system for tracking units of care provided, and assigning cost for care. We explore components that overlap with the surgical realm (CPT codes) as well as ASA units that are anesthesia-specific. This is definitely one of the most enlightening conversations that we’ve had on APM Success to date!

 

Justin (00:03):
I am so excited for this week’s conversation. The content of today’s discussion with an expert whom I just met. Devona Slater is one that I had envisioned happening for a very, very long time. Kind of like the, I did a couple of episodes on RVU and explaining what they are and how they work at some of this content that I think is a real pillar of understanding healthcare economics specifically today, anesthesia economics. And I just wasn’t sure who to tell who to talk to about it until recently. So today we talk about anesthesia billing and don’t turn, don’t turn off that dial.
Justin (01:03):
We talk about everything that happens from the time that I, an anesthesia provider is in the, or with a patient to the time that the anesthesia company gets the payment from that procedure into their corporate checking account. And I learned so much from talking to Devona. I hope that this is really informative for you in the ways it has been for me. And this is going to be the first several part series about understanding, following the money through the healthcare system, from the standpoint of an anesthesiologist or an anesthesia practice. So hope you enjoy today’s content as always. Thanks for tuning in hello and welcome to episode 88 of APM success. I’m very pleased today to be joined by a special guest Devona Slater. Devona is the president and senior compliance auditor for ACE, which is a consulting company that specializes in anesthesia and pain management, billing and compliance. This is a very technical topic, and we’re going to have a couple of conversations around this, but I’m super excited to have these conversations that I know that Devon is the person for this because understanding the flow of money in reimbursement for anesthesia services is critical for any clinician to get their brain wrapped around. As you understand your value to an organization, systemic risks that exist and all of these things. So Devona, thank you very much for joining us today.
Devona Slater (02:22):
Now my pleasure, Justin,
Justin (02:24):
To start us off, why don’t you tell us a little bit about ACE and some of the things that you do for your clients?
Devona Slater (02:29):
Sure. ACEs, a company that was started 24 years ago we actually have been doing auditing monitoring, coding and the anesthesia and pain management space for that long. Our goal was simple when we started to be real honest, it was, if providers are going to be judged on their billing and, and their documentation that they deserve to know the, and that’s something that they really don’t learn in medical school and they really didn’t have any place to start with. And so my whole thought process in the very beginning and still is today is to provide education because I believe that if they understand why they’re doing something and why it’s important, everybody will comply and do the right thing.
Justin (03:23):
Awesome. So I know that in our listenership, there’s going to be a broad array of familiarity with this topic of billing, coding, compliance. So I want to start at the very, very beginning with the very, very basics and describe in the world of Ana. And we’re going to talk about anesthesia billing specifically today in the world of billing for anesthesia. Talk about some of the fundamentals, how is anesthesia billed?
Devona Slater (03:47):
Right. So I mean, you know, all providers understand, you know, the base units, the time units, the modifying circumstances, and how those all go together to make up any anesthesia charge. Things that they may not be as familiar with that are just as important is the medical necessity. And the diagnosis is that we have to support the reason why an anesthesiologist is there. And so, you know, that diagnosis coding is critical for services specifically around monitored anesthesia care, because we have to prove to the government, to the insurance payers that were necessary. So those comorbidities that providers sometimes, you know, just check a box or do something have to be reported in addition to, to justify why we need that claim or why that service is necessary. So diagnosis coaching, even though it doesn’t quote, get you more money or do other things for it is just as critical so that the claims can be denied.
Justin (04:55):
So if we take a couple of these components, the base units, the time units, and then additional components for, for the base unit piece specifically, how does that work with different types of procedures and how do you know, kind of what the base units are?
Devona Slater (05:12):
Right? So the ASA every year publishes what they call a relative value guide and a crosswalk. So there are two separate books that truly in the anesthesia industry is the standard of how you get paid for those base units. And they actually have a committee that meets every year at several times a year, I’m sure to actually go through the work efforts on those procedures and assign those base units to the CPT codes and what we call a crosswalk. And that crosswalk then takes the surgeon CPT code and realize that back to the ASA relative value guide. And so those ASA codes then have what we call primary codes and then alternate codes and there’s alternate codes. When they’re certain conditions related to the surgery, you can build the alternate codes. And that is where we see a lot of physicians make mistakes is they’ll get the primary code, but let’s say that they have a spinal surgery and it involves multiple levels, maybe not instrumentation, but multiple levels that actually does raise it to 13 base units, which would then be another, you know, five units of what they normally would get off of a lumbar surgery.
Devona Slater (06:35):
So I think that, you know, that’s always important for providers to understand what makes up those alternate situations within there and document that so that the coder can get it right, so we can get all the money we really are entitled to.
Justin (06:53):
Can you give us an idea of the range of the base unit component from the simplest to the most complex?
Devona Slater (07:00):
Right. So probably the simplest are going to be your, just your incision and drainage and your, you know, mole removal, things like that that are like our diagnostic kinds of procedures that are like at a three, you know, base units at three prior, most complicated are going to be your open hearts on pump or, or things like that that are at 25 units. So there’s a variation, but, you know, within those alternate units, one or two units, maybe the difference in those codes. And so even though that doesn’t sound like a much, whenever unit is worth $20, it adds up pretty quickly. And $20 is the Medicare rate, you know, in managed care a lot of times that 75 to a hundred dollars. So again, coding and getting it right out of the box and making sure that we have the right ASA and the right diagnosis codes to support those services is the key to getting paid correctly.
Justin (08:04):
So in that base unit range, we’ve got the three to the twenties. And then in addition, we’re considering time units as another component. So talk me through how that works,
Devona Slater (08:18):
Right? So because anesthesia doesn’t control the time the surgeon does time units has always been added to the base units and we have fought very hard as a society, not to have average times and not to do those kinds of things. It’s very interesting over my career. We have seen them go from always rounding up to the nearest 15 minute unit, which some payers do to now. Actually just recently May 1st Cigna announced that they were going to go to actual build minutes. So we’re a lot of the commercial payers adopt the government model which is pain to the minute, which again, is a huge hit for a lot of groups. A lot of my groups have done an analysis and it’s, you know, anywhere from a seven to 10% yet going and taking those units down. So renegotiating those contracts comes into play. And it’s extremely important that we really pay attention to that because none of us can afford that kind of a hit on our bottom line.
Justin (09:28):
Absolutely. So can you give us a sense for the magnitude? Obviously, this is what maybe just give us a couple of examples, but for different types of procedures, what is the base unit value and what is the time unit value and sort of the relative weights of those?
Devona Slater (09:43):
Sure. So you know, probably some of your more basic, let’s just take a basic colonoscopy, for example, you know is work in a Medicare system, three base units. They usually takes, you know, one to two time units probably let’s say it takes 20 minutes. So, you know, that would be one point three or four time units in there. So then you add those two together. And again, the definition of time is what’s important because we do see a lot of groups get in trouble over that anesthesia time is not supposed to start until you actually begin to prepare the patient in the operating room or equivalent area. And so some groups will, we’ve had, you know, time paybacks where somebody didn’t understand the definition and they thought it was when they met the patient. So they included their preop evaluation, which is really covered in the Batian it’s, you’re not allowed to charge time for that.
Devona Slater (10:48):
So that becomes kind of a important sticking point is that definition of time. And then as long as they’re face-to-face with the patient, until they can safely place them with PACU personnel or post-operative nursing they’re allowed to charge. And so we see a lot of groups on the backend lose money because they use out of the, or not when they truly turn it over to operating personnel or in a recent audit that we did, we saw where they were actually turning the care over, but then going back to their desk and documenting in the EMR and then hitting anesthesia end time. So they’re in times where 20 minutes greater than that transfer of care to pack you, which would be a compliance issue. And you’re not allowed to charge for documenting it’s that total face-to-face time with the patient that you’re allowed to bill for. Okay,
Justin (11:44):
Got it. So for that colonoscopy example of three base units, maybe 1.3 time units, if we look at a more complex procedure, how does that equation change?
Devona Slater (11:54):
So if you look like at a heart procedure, let’s say that it’s just a routine bypass, which is 18 units, you know, and then you get to bill specifically for the time that the surgery takes, which might be three hours, you know, depending on how successful they are and how easy it is, how many different you know, things they need to do within that. But you also get to build for something called ancillary services. So things that are invasive types of monitoring, such as a Swan Ganz, or an arterial line sometimes, you know, transesophogeal you know, echos are billable or not billable depending on the procedure in routine hearts. You know, in a cabbage procedure it’s considered monitoring, but in your valve repairs and things like that, it’s diagnostic. So when it’s diagnostic Medicare and the other carriers allow you to quote, add a modifier and be able to bill for those services. So those diagnostic services do make a big difference. And again, the key is on that tee report for the physician to report whether it’s monitoring or whether it’s truly diagnostic
Justin (13:15):
Understood. So if we sort of recap this and take the component parts, so we’ve got 18 base units, we’ve got, if it’s a three hour procedure, is that 15 minute increments, one unit per 15?
Devona Slater (13:26):
Correct. So that would be another 12.
Justin (13:28):
So our 30, and then we’ve got ancillaries. Can you give us a sense for in the case you just described, if you’re doing some of those ancillary types of procedures, what type of value is associated with those?
Devona Slater (13:42):
Right. So those are all surgical procedures and are really usually done by the Medicare fee schedule. And you can get online@cms.gov and actually put in physician fee schedule and find out the relative value units. So those are measured in the RVU that those are measured by RBU’s and they’re paid just like if the cardiovascular surgeon would twice. So you’re in, you’re outside of the anesthesia community and really in the surgery community when you build those services.
Justin (14:15):
So if you look at the big picture, then in this example, we’ve got the ASA sort of billing method happening in conjunction with the surgical CPT RVU world at the same time.
Devona Slater (14:28):
Correct. And the important thing for surgeon or for anesthesiologists to kind of remember, and again, you know, we’ll talk about post-op pain probably next or a little bit later, but you know, you can only wear one hat at a time. And so there is a big controversy about when can you be wearing your anesthesia hat and when can you wear surgery, hat and norm Cohen from the ASA actually wrote an article several years ago, did an excellent job to actually distinguish, you know, before induction lines place, before induction, you should not build full time, but if the line happens to be necessary after induction or done after induction, then you don’t have to subtract your time. You can leave it in. So things like the Swan Ganz is usually done, nobody wants to have somebody come at you with that big honk, the meat, I’ll say your neck and be awake.
Devona Slater (15:27):
And so usually this one, but their arterial line, a lot of times it’s done out in the holding area and it is used to monitor them as they go to sleep. So you might bill for the time for the Swan, but she wouldn’t bill for the time for the arterial. So a lot of controversy around those kinds of things, same thing with post-op pain, with a total knee, you know, you might do a gin, a generic killer nerve block prior to surgery. So you’d build for the generic ULA nerve block, not for any time components, but let’s say you’re doing a tap block and it’s done at the end of the surgery. They’re already anesthetized. So you don’t have to subtract your time to do it. So a lot of little issues about that, right,
Justin (16:13):
As you’re describing these situations, it really makes me wonder, like, I’m sure there are unintended concepts, just because of the economics attached to these decisions. There’s definitely clinical decisions being made because of economic outcomes, just because, because that’s natural, a natural outflow of this type of method,
Devona Slater (16:32):
Right. And I will tell you, I am a huge proponent and have fought for the last, you know, 30 years of my career in representing the physicians. And I tell them document what you do, I’ll figure out how to bill it, but you’d document the very best patient care that you provide and we’ll figure out the economics on the backside. But it’s a lot of that that groups don’t think about, you know, when you’re in a physician in and trying to save somebody’s life or involve the last thing you have on your mind is how, how does my bill go or what is it that you know has to happen? And so I really do believe that, you know, the majority of physicians that doesn’t even enter their mind when they’re providing the service
Justin (17:19):
That’s an observation that Dr. Karen Seibert has made on this show in the past, is that so much of the doctor’s job description has nothing to do with patient care. It’s actually like a billing and reimbursement task orientation. And even the whole EMR you could argue is kind of built around that, like a focus on reimbursement rather than a focus on, let me take care of the person on the table in the, or, which is interesting if you think about it in those terms, certainly outside of my expertise, but I, you know, it seems apparent based on what describing that that’s a real
Devona Slater (17:50):
Challenge. It is, and you don’t really want your anesthesiologist to, you know start looking and say, okay I’m not gonna do this until I get into the, or because you know, it would be better for my bottom line, if I can do it under time versus non Enertech, you really want them to do what’s medically appropriate. And what is the right thing to do to take care of that patient? I might be an extremely anxious patient and crying and, you know, hysterical and everything. I want them to give me that verse set in the holding area and stay with me the whole time. That’s perfectly appropriate, but let’s say that, you know, I’m pretty calm, pretty chill, no big deal. I don’t mind being wheeled back, we’re talking and having jokes and everything probably shouldn’t start there, time’s up and get in the, or because they’re really not under that anesthesia care.
Justin (18:43):
So to what extent do you find physicians? And I would imagine this varies across like different practice models and sites of service, to what extent are physicians dialed in to these types of considerations as they’re, I mean, even separating the patient care questions for a moment and just looking at like the record keeping component of this, to what extent are they aware of these? Oh, if I do the block before, or if it’s for post-op pain, it’s this, if it’s, if it’s intra, you know, surgery, then it is
Devona Slater (19:15):
Out of anesthesia. Right. and that’s one of the things that we help groups with. We, we have a report basically that we do through our partner company, Hey, KPI that actually monitors that revenue quote integrity piece, and really gives back information about, you know, things of documentation that would make a difference in the reimbursement. Like you didn’t capture the time for the spinal and the spinal was the motive anesthesia. So you should have captured that 15 or 20 minutes that it took you to do that. So there are monitoring tools that groups, especially now with the computer and the EMR being able to go back and re-educate them. But again, you know, I have been, I’ve had two total knees and a total hip I’m, you know, a very big proponent of surgery. And the last thing I want is for those guys to be worried about whether or not they’re getting paid, you know, I want them to get paid for the services they do.
Devona Slater (20:15):
So I hope that in the everyday life of an anesthesiologist, they do understand that these rules exist, but it’s not in the forefront of their mind that, Oh my God, I need to do this and document this way. But there is a reason why we want them to put time on their post-op pain blocks. And it’s for that very reason or for their motivate anesthesia and doing a regional technique is because if it’s the technique, you can add the time. But if it’s for post-op pain, you cannot. And so just understanding, Oh, I want you to do is understand why I’m asking you to document this way. We’ll deal with the nitty gritty part of it. When it gets to the billing, you know, they shouldn’t have to worry about that, but it is why the EMR sometimes are set up with stops and things like that is because it becomes, you know, a critical element to document that way
Justin (21:10):
In the next minute or two here. I want to walk through the, from the time the anesthesiologist puts their hand on the shoulder, the patient is preparing them for surgery to the time the money from the insurance company hits the checking account of the anesthesia practice. As much as we can sort of simplify this. Cause I know there’s a million moving parts and it depends on a lot of different things, but maybe walk me through that process. The, the key components and the key players who help sort of move this billing unit all the way down the line.
Devona Slater (21:46):
And your listeners are probably very familiar with what goes on from the Pria Val to the interop to closing the record. Okay. So we’ll start with closing the record. Okay. So, and why that’s so important is that’s closed. The record is because there’s something called concurrency in the billing world. And we have to capture all cases on a data service to be able to run that report. So let’s say you’re busy and you leave the hospital and you’re going to be on vacation for a week. You have just held up the entire day of billing because we have to have your case in order to complete the billing. And so a lot of docs don’t think about that. You know, I got to get out, I gotta do this. And so Y while, you know, I understand you got time constraints and kids to pick up and life happens.
Devona Slater (22:40):
You have to understand that your action of not closing that case has a consequence to the revenue cycle all the way down the line. So first what happens is all the cases are transmitted either electronically in today’s environment, or a lot of people will get what we call a PDF dump, which is just images of the, you know, the billing summary that comes out of Cerner or Epic or Meditech or whatever. Okay. And then it goes to the billing company. The first thing they do is, you know, really take that demographic information, enter it in, get that verified. Some of them have tools to do that.
Justin (23:23):
The company usually like its own third party and external to the healthcare org.
Devona Slater (23:29):
It could be either, you know, a lot of the large groups do all internal billing, which again goes to their private office, but other groups use the, the big going companies, you know, Abby, APC, medevac you know Zyrtec, Oh, there’s just RCM one. I mean, there’s a ton of them. So it doesn’t really matter. The process is still really the same. So what has to happen is that insurance has to be loaded in, and we go ahead and then we have to code the service. So it looks at the providers, the times involved, the ASA code has to be assigned based on the surgeon’s report or that final postoperative diagnosis, which is another key is we can’t have what was scheduled. We really need to have the postoperative procedure and diagnosis in order to make that work. And so then the ICD 10 is assigned, and then it goes into a queue which runs what we call concurrency.
Devona Slater (24:32):
And all that does is count how many cases a doctor is involved in at any one time. And they run that even if there isn’t a team model because physicians and pro and CRNs are not allowed to overlap themselves in personally performed services. So it is important to check their busy providers and sometimes they can make a mistake, you know? And so that kind of thing goes on behind the scenes. Once that concurrency is checked and they’ve assigned the modifiers, then it’s ready to be batched and actually sent to the verification or the through usually a third party to submit that electronically to the health programs. So through some kind of claims thing, there’s, there’s, again, several of them that different groups use, but they’ll submit those into the billing. Then, depending on if it’s accepted or not accepted, there may be a problem with the provider number or a, or an insurance number.
Devona Slater (25:38):
That’ll kick it back or something. But at that point, you’ll help the insurance company takes it, processes it. And then usually within, you know, 15 to 21 days on average, that will turn back to the group either as a denied service or as payment. And if it comes back as payment, then the billing will make an ingest that in several ways, one is through an, an EFT and electronic funds transfer and they can post that electronically under their system. The important part about that is, is that you pick up all the additional information. So let’s say in that 18 unit case, you know, they’re in a hard case that they pay for the case, but maybe they don’t pay for the lines or they pay 16 units instead of 18 units for the base units or whatever. It’s important that the remedies cycle have some kind of check and balance on that managed care contract and line item, post those so that they can really what the managed care company or the insurance company is paying for that service, because they will traditionally try to underpay you.
Devona Slater (26:52):
That’s just, you know, probably I would say a variance of five to 10% goes on in that neck of the woods that they have to really pay attention to. So I think, you know, from there they post it then they’ll file either a secondary claim or it’ll be a patient balance statements will go out to the patient at, at that point. And hopefully, you know, they get that money that has been really a big problem in anesthesia is because we don’t really have a relationship with the patient. And so they’re not really expecting that bill as much of it is, and they don’t understand their own insurance. So those higher deductible plans, things like that have added a lot to anesthesia revenue cycle work and really getting those balances collected, which is why it’s important to take credit cards, make it easy, pay Powell, you know, anything like that because millenniums, you know, specifically are more inclined to click on their phone and pay a bill and do that kind of thing. And so if you’re not sending out messages either to their phone or in their email, that makes it easy for them to pay, you’re not going to get paid. That’s just the way a lot of young people. I, and I say that as a 62 year old person, you know, I can remember when we actually sent a bill and got paid, you know, that all the way back hasn’t happened that way anymore. Does it not happen anymore?
Justin (28:27):
Oh man. Okay. This has spawn so many questions in my mind. So I’m drawing a little flowchart here on my desk of the different entities in the different parties and their different jobs. So bill, the billing company is going to batch the, the PDF dump or the electronic data that they receive. And then it sounds like they separate it by payer probably if a hundred patients come in
Devona Slater (28:49):
To keep all the cases for that date of service together. Okay. So it gets separated when they send that big file off to the clearing house, the clearing house then separates it and sends it to the individual.
Justin (29:01):
Got it. And the clearing house, that’s the claims processor that you mentioned. Okay. Got it. So there’s obviously different payers and there’s different types of contracts and the different contracts are going to dictate how the anesthesia services are going to be reimbursed. So can you talk a little bit about some of the different types of payers, whether the government or commercial, or maybe other like managed care contract and how that works and what it means for the anesthesia company?
Devona Slater (29:34):
Sure. So the anesthesia revenue cycle group will have a master insurance that’s from the contract. So let’s just say Ron example, we have a commercial payer that we hold a contract with and we get a hundred dollars a unit and we’re supposed to get paid for our physical status, our modifying units, our qualifying circumstances, all the things that the ASA says we should be paid for it. Okay. So you would load that information into your revenue cycle system. And so when you charge that out, it goes in and checks against those tables and says, Oh, I know I need to bill for my physical status, P three. And I get one unit for that. Oh, I know this is an emergency. So I get two units for that. And I need to add that 99, 100 on. So you actually get to add those things together to make a bill.
Devona Slater (30:27):
And that bill is submitted. The important part is, is when it comes back, did the payer pay according to that? And this is where that line item posting and understanding that revenue cycle contract and how that post deals with what we would call an exception report in the business of maybe they paid for the anesthesia service, but they didn’t pay those physical status or they didn’t pay those qualifying circumstances. And the contract says they’re supposed to. So if you don’t appeal that or challenge that the insurance company just saved a hundred bucks because of that, that I’m not paying for that P three. We’re not paying the emergency on it. And that’s where we see, you know, a lot of quote, lost revenue in not monitoring those contracts.
Justin (31:17):
Is there any mechanism for accountability with an insurance company that doesn’t pay contractually obligated rates or procedures, or if they just knock off the last two units? Cause they, somebody back at corporate didn’t think that you needed to do that CPT code for this type of procedure and they withhold it and then you got to go back and forth with them,
Devona Slater (31:34):
Right. So that is done on a claim by claim basis. Usually under an appeal process, there are a lot of groups that will, if they have like a large contract with blue cross, I’ll keep a spreadsheet and then reconcile maybe with blue cross once a month or something, you know, there are different ways to, to actually address that. But you have to check on them. You just have to,
Justin (31:58):
I guess what I’m asking is, is there any incentive for an insurance company to do that appropriately or is there only an incentive for them to always underpay?
Devona Slater (32:07):
Well, I D you know, we, we have a saying to, err, is human to really screw it up. It takes a computer. And I sometimes think that it’s not necessarily you know, they don’t program it right. Or they may have overlooked something and unless we bring it to their attention, they’re not going to change it. And so yes, they have an incentive for their shareholders to pay out as least amount of medical, you know, a ratio on those claims as, and if we blanketly close our eyes and accept it, then shame on us because it is our responsibility to double check on it.
Justin (32:50):
So you mentioned the revenue cycle company in the master contract. I’d like to understand what is the master contract and how does that relate to the different payers with which a group is contracted and are there as, I mean, I’m curious, are there different, you know, if, if it’s Cigna versus Anthem versus blue cross blue shield, are they going to pay different amounts for different numbers of ASA units for different types of procedures?
Devona Slater (33:16):
No, they, it, it is all boiled down to an ASA unit. So they will define in their contract, let’s say, I’m going to make like our example, a hundred dollars a unit just to keep the math easy. So they will pay a hundred dollars a unit for that, and maybe partial units on the time, but they will always pay that a hundred dollars. Now, your ancillary services are paid differently based on the surgical fee schedule that they have, but anesthesia is simple like that, but Cigna might be at $75 and United healthcare might be at 82 and blue cross at a hundred. I mean, you know, each one does have a different rate schedule that they pay those at that, you know, when in the old days, in the very beginning, when I started, you know, I posted payments, that’s one of the jobs that I had to do in a small billing company to get started. And you do get to where you can eye it and say, Oh, this is 13 units. This is 12 units. This is 11 units. And back in those days, that’s how we checked it. But in today’s environment with the computer and stuff, and the massive number of services, some of these billing companies are huge. And they’re processing hundreds of thousands of claims that day to rely on a human eye check or spot that, and not use the computer tools that are available is a mistake in today’s environment.
Justin (34:43):
So I’m curious to know how this relates to a group going out of network. I know there were recent headlines with I think it was UHC and envision, and that’s a huge number of physicians who are employed by envision, and many of whom are anesthesiologists. And th this, this happens periodically. There’s like a big insurer and a big doctor group that like they don’t, they’re no longer in network, the doctors aren’t. And so can you talk me through, what does this mean from a billing standpoint, from both the practice, the physician practice, as well as the patient experience?
Devona Slater (35:18):
Sure. And it’s going to change in the next 12 months. I mean, they pass the federal law for out of network that will affect all 50 States. So this is a huge topic. You could probably chew a show just on Abbott network because it, it truly is. It creates a different process that we, that we haven’t had where we have 30 days to actually negotiate supposedly with the insurer and accept their payment, or we go to an appeals process and mitigation to do that. And it’s going to change the way this out of network has also worked. We’ve also seen and had reported to us from several of our clients that the insurance companies are now not willing to negotiate. They’ll come back with you and say, no, we’re paying this much. You had $80 last year, but you know what things have been tough this year, we’re going to 70 to take it or leave it.
Devona Slater (36:14):
And if you leave it, you’re forced out of network, like envision was with that. And they’re probably only trying to get what they need to operate their bottom line. So, you know, my understanding in negotiating management contracts is it really is an education that they need to understand what makes up your costs and why it’s expensive and why it’s important for you to do that. And that you don’t just go in and ask for a 5% increase or a 10% increase. You have to do a lot more explaining in today’s environment and educating them of why you are the partner they want.
Justin (36:51):
When you say educating them, you mean the physicians and the group educating the insurer. Correct.
Devona Slater (36:57):
Okay. In that managed care negotiation process, it’s, you got to take more of a, a stance of what you bring in value to that managed care company. And, you know, again, living through an anesthetic is quality of care. They expect that that’s not really what they’re looking for as far as value, but some of the other quality measures that are reported, or you know, some of the extra things that you can do in monitoring the drugs used to make sure you’re using the cheapest drugs or things like that. Those are tips that, you know, a lot of times physicians don’t always think through when they’re doing a managed care contract, they’re all about the unit rate, the unit rate unit rate, I get it. And, and there should be that, but you’ve got to have that step to justify why you’re the better person to actually be in that contract and why they don’t want you to be out of network. Somebody like envision, you know, they have such a huge you know, playing field and in the anesthesia market, you wouldn’t think an insurance company would want to be out of network with them. But again, their bottom line is they make money not paying physicians.
Justin (38:11):
So as you look at a situation like that, how do you interpret what’s going on there?
Devona Slater (38:17):
I think probably it’s a play on the managed care company to actually there there’s something that Envision’s not giving them that they wanted. And so whether it’s a lower rate or whether it’s, you know, more team care, whether it’s more you know data back on those other things, I don’t know, cause I’m not involved in those negotiations, but the challenge in maintenance care negotiation is to really understand and walk a mile in that other group’s shoes. So, and blue cross has shoes in United shoes and come to some common ground. And so that’s really the, you know, good negotiations take years to really come to fair deals. And it’s not something where we beat you up and you know, it’s a win for us and you guys lose big time. You really have to, it’s a very intentional strategy that you should be quality.
Justin (39:15):
So in order to just, I want to make sure I understand when, so when something like that happens and envision goes out of network at the United, and then somebody comes into the, or who’s United insured and then an envisioned physician provides anesthesia services. And then I’m looking at all these little boxes and all these little arrows on this piece of paper. Can you kind of describe how that bill is processed and w w where, where are the arrows changing and what is the, the
Devona Slater (39:44):
Right? They will still submit it to United as an out of network for the patient. The patient will sign the agreement that says that they want you to submit their insurance. They’ll that’ll happen depending on the company. They may pay the patient directly and not pay the managed care. I mean, the physician. So that’s always a danger. So it’s important for the group to communicate immediately with the patient that this is what’s going to happen. And you don’t think you won the lottery when you get that 1200 or $1,300 check for anesthesia services. You know, that’s the danger of being out of network is that payment then goes to the patient or could possibly go somewhere else, you know, unless you sign on to accept whatever they pay, you know, truly the patient then becomes responsible, which is what you hear about the surprise billing and all of those kinds of things.
Devona Slater (40:41):
As wait. I thought I was going to an in network hospital and my surgeons and network, how can I have this $1,500 bill from my anesthesia provider? You know, and how is that fair? And most grit, you know, you are responsible. So some groups will have a cash pay discount or something that kind of brings them in line with that. But it is the patient’s responsibility, which is what the outcry is from the American public. They pay all this money for insurance, and now they are left with these huge out of network type of foods
Justin (41:17):
Situation you just described. The claim goes to say, United, in this case, United pays the patient 1200 bucks. United probably had some method to derive the, the amount of money that the patient was getting. So what if they’re out of network, what method is United using that instance, that’s
Devona Slater (41:34):
All proprietary. So each one of them may do it differently. Some of them will pay in network rates. Some of them pay less than, much less than that, you know, they’ll pay, you know, and each contract, if you go pull your own insurance contract and read what it is they’re going to pay on out of network benefits, like mine is a huge penalty. They’ll pay like 25% of bill charges on how to network. And that leaves me responsible for 70%. So that’s why it becomes so difficult is because that’s actually done at the company level of who buys your insurance. So your employer actually makes that decision for you. And as a patient, you don’t realize what that really means until after the care is delivered, which is why they call it a surprise.
Justin (42:24):
And so the patient gets that $1,200 check and they think, Hey, this is great. A lot of stuff just happened. Paperwork flying all over the place. I don’t really understand, but I got 1200 bucks that feels like a win. But in reality, that $1,200 is probably a 25% reimbursement for $4,800 anesthesia charge that they’re now on the hook for.
Devona Slater (42:39):
Correct. And so then you’ll negotiate with the patient and some groups will take what the insurance company pays, which is again, a violation you know, it’s a compliance risk to do what we call insurance only and accept what the insurance pays as payment in full. You know, so that’s a totally different call, but you do have to balance bill the patient for that. And it doesn’t look real good to your surgeon or to your hospital. Then when they get a complaint from the patient that anesthesia is charging these exorbitant rates, you know, outside of this, and I didn’t have any control over it.
Justin (43:18):
So I think we’re coming up on time here. And I want to wrap this up. Are there any other parts of this ecosystem or any other relationships between any of these parties that it’s helpful to understand or unpack in the context of understanding how anesthesia billing works
Devona Slater (43:32):
Well? And I do think that depending on how your contract’s written with your RCM company or your own in-house managing those costs is important. And you know, most billing companies are incentivized to collect. They get a percentage of those collections, so they are incentivized to collect, but a lot of them, you know, they’ll take the easy money and the ones that get paid, but it costs so much now on the back end to actually fight those appeals and stuff that if you’re paying a very low rate, they’re really figuring that they can get, you know, paid on the 80%. They can make it and make money at 80% of your revenue. And they figured that in when they give you a 2% or 3% billing rate, because you can’t fight those claims without personnel and people and things like that. So remember, you know, if you’ve got this great rate, you may be losing revenue for that because you don’t the personnel to fight it. So it’s kind of a Peter to pay Paul, do you, you spend a hundred dollars to get a thousand dollars. Are you really happy with $80? You know?
Justin (44:43):
Yeah. Wow. Okay. Well let’s wrap it up there and I want to continue this conversation in subsequent episodes, but Devona, it’s been great speaking with you today. Anybody who wants to check out their website, it’s ACE anesthesia pain.com is [inaudible] consulting company. If any of this has piqued your interest, you want to talk to her about auditing your own billing and compliance processes, or learn more about some of their expertise would encourage you to check that out. Devon, thank you very much for your time today. I look forward to continuing this conversation soon.
Devona Slater (45:12):
Thanks so much.
Justin (45:15):
If you liked what you heard this week, head on over to APM success.com, where you can find more content and free resources to help you build a successful career in anesthesia and pain management. If you want it to leave a review in iTunes, that also really appreciate it. Thanks for using some of your valuable time to join me today on APM success.

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