The impact of longer-than-average anesthesia times on the billing of academic anesthesiology departments

Abstract

Academic anesthesiology departments provide clinical services for surgical procedures that have longer-than-average surgical times and correspondingly increased anesthesia times. We examined the financial impact of these longer times in three ways: 1) the estimated loss in revenue if billing were done on a flat-fee system by using industry-averaged anesthesia times; 2) the estimation of incremental operating room (OR) sites necessitated by longer anesthesia times; and 3) the estimated potential gain in billed units if the hours of productivity of current anesthesia time were applied to surgical cases of average duration. Health Care Financing Administration average times per anesthesia procedure code were used as industry averages. Billing data were collected from four academic anesthesiology departments for 1 yr. Each claim billed with ASA units was included except for obstetric anesthesia care. All clinical sites that do not bill with ASA units were excluded. Base units were determined for each anesthesia procedure code. The mean commercial conversion factor (US$45 per ASA unit) for reimbursement was used to estimate the impact in dollar amounts. In all four groups, anesthesia times exceeded the Health Care Financing Administration average. The loss per group in billed ASA units if a flat-fee billing system were used ranged from 18,194 to 31,079 units per group, representing a 5% to 15% decrease (estimated billing decrease of US$818,719 to US$1,398,536 per group). The number of excess OR sites necessitated by longer surgical and anesthesia times ranged from 1.95 to 4.57 OR sites per group. The potential gain in billed units if the hours of productivity of current anesthesia time were applied to surgical cases of average duration was estimated to be from 13,273 to 21,368 ASA units. Longer-than-average anesthesia and surgical times result in extra hours or additional OR sites to be staffed and loss of potential reimbursement for the four academic anesthesiology departments. A flat-fee system would adversely affect academic anesthesiology departments.

Implications: We examined the economic impact of longer-than-average anesthesia times on four academic anesthesiology departments in three ways: the estimated loss in revenue under a flat-fee system, the excess operating room sites staffed, and the potential gain in revenue if the surgeries were of average length. These results should be considered both in productivity measurements and strategies for operating room management.