Egregious Charges for Anesthesia Services Raises Red Flags


ClaimDOC’s comprehensive line-by-line review of claims uncovers errors that basic claim repricing and auto-adjudication does not catch, leading to greater savings for health plans and its plan members. Our audit team analyzes all types of healthcare claims for a variety of potential concerns including excessive usual and customary charges, duplication of claims, incorrect coding, unbundling of services and many others. Our claims review is not intended to impact care decisions or medical practice.

In this Audit Spotlight, we focus on egregious charges for anesthesia services reported/billed on the CMS-1500 claims/electronic equivalent.

As healthcare costs continue to climb an upward slope, an escalated need exits for closer analysis of healthcare claims to identify egregious charges, improper medical coding and billing errors and associated improper claim payments.

Anesthesia Services and Reimbursement

Anesthesia reimbursement is typically calculated using the applicable anesthesia CPT code base unit, plus anesthesia time (minutes), multiplied by an anesthesia conversion factor. Certain anesthesia modifiers also influence pricing.

Each anesthesia CPT procedure code (00100 to 01999) has an assigned anesthesia base unit. Base unit means the value for each anesthesia code that reflects all activities, other than anesthesia time. These activities include usual preoperative and postoperative visits, the administration of fluids and blood incident to anesthesia care, and monitoring services.

Anesthesia time as defined by Medicare, means the time during which an anesthesia practitioner is present with the patient. It starts when the anesthesia practitioner begins to prepare the patient for anesthesia services and ends when the anesthesia practitioner is no longer furnishing anesthesia services to the beneficiary, that is, when the beneficiary may be placed safely under postoperative care. Anesthesia time is a continuous time period from the start of anesthesia to the end of an anesthesia service.

Anesthesia practitioner, for the purpose of anesthesia time, means a physician who performs the anesthesia service alone, a CRNA who is not medially directed who performs the anesthesia service alone, or a medically directed CRNA. HCPCS modifiers are required for reporting/billing to indicate they type and level of involvement of the anesthesia provider

The anesthesia conversion factor used to compute allowable amounts for anesthesia services under

CPT codes 00100 to 01999 is specific to the date of service and the anesthesia provider’s locality where services are performed. For physician-directed anesthesia services, the allowance by Medicare for both the physician and the CRNA is spit, i.e., 50% of the allowance for the anesthesia service if performed by the physician or CRNA alone.

Anesthesia Services and Egregious Billed Charges

A certified registered nurse anesthetist (CRNA) in Texas billed for anesthesia services on CMS-1500 claim/electronic equivalent using CPT code 01810, defined as, anesthesia for all procedures on nerves, muscles, tendons, fascia, and all bursae of forearm, wrist and hand with modifier QX. The claim listed the place of service code as 24 – ambulatory surgery center (ASC). The primary ICD-10-CM diagnosis code reported on the claim – M72.0 – Dupuytren’s contracture.

ClaimDOC’s auditor’s eyes questioned the charge of $52,000.00 for the reported 75 minutes of anesthesia performed by the CRNA.

A second claim was also billed for charges of $52,000 for 75 minutes of anesthesia for the medical direction of an anesthesiologist with the same CPT code (01810) except with modifier QY, and same place of service code (24) and diagnosis code (M72.0) as the CRNA’s claim.

Member Claims – Two Bills for Anesthesia Services

*CRNA Claim – Total Billed Charges $52,000.00 for 75 minutes of anesthesia

ClaimDOC pricing – $108.80 based on Medicare rate with markup

Plan Savings: $51,891.20

Percentage of Savings: 99.8%


*Anesthesiologist Medical Direction of CRNA Claim -Total Billed Charges $52,000.00 for 75 minutes of anesthesia

ClaimDOC pricing – $108.80 based on Medicare rate with markup 

Plan Savings: $51,891.20

Percentage of Savings: 99.8%

The Takeaway

Of interest, each of the billed anesthesia charges were higher than the ASC’s (facility) charge of $22,000.00 for the performed surgery, CPT code 26123-RT. The physician performing the surgical procedure billed CPT code 26123-RT and a charge of $2,584.00. 

Egregious anesthesia charges were identified on the above two anesthesia claims. Egregious charges and the improper reporting of services, coding/billing errors can complicate matters for members to understand their bills and payments, impact the collection of patient balances, build a reputation of practitioners charging high fees, create burdens for patients having no insurance and a host of others.

Given the volume of healthcare claims that are reported/billed each day by providers/suppliers, medical bills errors and egregious charges are alarmingly common and lead to abuse, waste and fraud.

When an individual receives a healthcare bill that appears questionable/inappropriate, an inquiry to the provider and/or health plan should be made to obtain an explanation of the service(s) and corresponding charges.

Our goal at ClaimDOC is to use benchmark charges and costs nationally to negotiate fair and ethical payments. Our high-quality and expert review of claims identifies and prevents improper medical claim payments and maximizes long-term cost savings opportunities. Employers turn to us to establish fair reimbursement rates for their plans allowing them to save money and provide richer benefits to their employees. A win-win for everyone.