Anesthesia Billing – How Anesthesia Billing Is Done

Here is the breakdown of the basics of Anesthesia billing:

Anesthesia bills in "anesthesia units" most other specialities bill in RVU's. The ASA puts out a book called the ASA Relative Value Guide, which lists how many units each case is worth.
The average anesthesiologist working 60-65 hrs a week, taking 6-8 weeks vacation and bills out about 10,000 units a year.
Average blended unit reimbursement “ABUB” (taking all payors into account) is around $40 a unit.
So, full-time, call-taking anesthesiologist makes about $400k a year. The equation works like this: Units x Reimbursement = Your salary. You have 2 variables, either work more (bill more units) or get higher reimbursement. If you want to live somewhere cool, like Denver, CO....they have an oversupply of anesthesiologists and the insurance companies know this, so they don't pay well. You might get an ABUB value in the low 30s. So, you either make less money or work more. If you want to live someplace less desirable, ABUB values are higher and you can work less to make the same salary.

How is the ABUB calculated? This number is what a group gets when they take all of their payors (Medicare, Medicaid, workers comp, insurance companies, and no pay patients) and gives them their respective weights and computes the weighted average reimbursement. Medicare pays about $17 a unit. Medicaid payments vary by state and can range from $11 to $33 a unit. Most insurance companies these days are paying around $55-60 per unit.

So, your ABUB can vary due to your payor mix. If you have a high Medicare population, your ABUB is going to be low because Medicare pays so poorly. It is like having all four A's and one D on your report card. The D really pulls you down. Here is an example:

You can see how much an increase in your Medicare population changes your reimbursement. To take it one step further, let's see how this impacts your take home pay.

Those are some pretty big numbers. You work the same number of hours, but your pay is $86,000 a year less due to a higher Medicare percentage. Over 20 years, that is $1.72 Million. Be sure to ask any prospective anesthesia group what their ABUB is, it is definitely worth your time.

There are ways to improve income in anesthesia by doing other procedures. Arterial lines (3 units) and central lines (4 units) can produce extra payment, but not for certain cases, such as CABGs and AAA's. This is because Medicare and insurance companies have bundled those in with the case, as they are considered "standard" for those cases. Other methods are through acute pain management, such as nerve blocks. These actually pay quite well, thought they do require significant documentation to receive payment, especially from Medicare. For example, a continuous femoral nerve block catheter yields 10 units for placement and one unit per day of follow-up.