Medicare Pays Anesthesiologists Less Than Plumbers

American doctors may be among the highest paid physicians in the world, but that wouldn't include anesthesiologist who receive their patient reimbursements through government healthcare. 

In an interview in Becker's ASC Review, Dr. Scott Harper, Assistant Professor of the Department of Anesthesiology and Perioperative Medicine at the University of Alabama Birmingham, noted that Medicare pays anesthesiologists the equivalent of $45 an hour for their services. That's less than what your local plumber charges you to come in and look at your clogged toilet.

With new federal laws prohibiting doctors from balance billing, which is charging patients for the balance of a medical bill not fully paid for by insurance, the problem is only getting worse. Insurance companies have no incentive to reimburse doctors fairly because they don't have to deal with irate customers who have to pay out of pocket anymore. Now these companies are canceling contracts and lowering thier reimbursement rates, getting closer to Medicare rates.

Anesthesiologists already have to put with Medicare payments that are only about one third of private insurance reimbursements. Medicaid, which is government insurance for the poor and indigent, pays even less. The wide expansion of stingy Medicaid is how the Affordable Care Act aka Obamacare is able to insure millions more people, on the backs of doctors and hospitals. 

If the private insurance payments keep going lower, anesthesia private practice will be a thing of the past. We will all become hospital employees like emergency medicine or pathologists. Only hospitals will have the leverage to negotiate fair contracts with these behemoth insurance corporations. Individual anesthesiologists will not be able to sustain a viable business model with payments that rival the plumbing profession because plumbers don't have to pay back six figure student loans and five figure malpractice insurance premiums as part of their business expenses. 

New York Tells Insurance Company To Pay For Anesthesia Services For Colonoscopies

The New York Attorney General's Office has ordered an insurance company to pay for anesthesia services rendered during colonoscopies. The State AG Eric T. Schneiderman penalized Emblem Health $25,000 for billing a patient for anesthesia after his screening colonoscopy. According to the Affordable Care Act, aka Obamacare, screening colonoscopies are part of the free health maintenance procedures that are mandated by the law.

The insurance company ran afoul of the law when a patient was billed $1,320 by an anesthesiologist who was not part of his insurance network. The company paid $924 but told the patient to pay the balance. That's when the patient lawyered up and called the AG's office. According to the Attorney General, anesthesia is a necessity when a patient undergoes colonoscopy. Therefore, as required by the ACA, the patient does not have to pay any deductibles, copays, or coinsurance.

What can we take away from this? One, that anesthesiologists should get down on their knees and thank their deity of choice for the ACA. Now, when patients who have these government insurance plans come in for colonoscopies, their anesthesia bills can't be denied as so many private insurance companies try to do.

What is more amazing to me though is the obscene amount of money the anesthesiologist is billing. A colonoscopy typically takes no more than ten to fifteen minutes. In the hands of an efficient or unscrupulous gastroenterologist, seven or eight colonoscopies can be knocked out in an hour. If this anesthesiologist is able to collect that much money on each one, it's easy to see why some anesthesiologists truly have the best paying job in America.

Insurance coverage for anesthesia

Here is an interesting comment (#25) on the Prescriptions blog of the New York Times. I copied it in its entirety.

Rein in the anti-competitive practices of the anesthesiologists

One of the overlooked issues in the entire health care debate has been the fact that most anesthesiologists who work at hospitals choose not to “participate” in the health insurance programs that the hospital accepts. So, wise consumers can choose a “participating” hospital and also select a surgeon who “accepts:” their insurance but find that they will have to pay the anesthesiologist whatever is charged. And, they cannot elect to bring in an independent anesthesiologist. All who work at a hospital either are in one large group practice or choose to accept the same insurance programs.

Therefore, the only insurance coverage for the anesthesiologist will be “out of network” coverage. This requires a “first dollar” expense each year and then only reimburses about 70% or “usual and customary” charges — regardless of the actual bill. This means that an operation that, is in-network for the hospital and the surgeon, might result in a bill from the anesthesiologist for over $5,000. Of this amount the patient might have to pay $3,000 or more.

The simple solution, in the sprit of cost containment, full price disclosure and anti-monopoly practices, is to require all medical procedures done in the hospital, by any personal, be covered by the same set of insurances. So, if a patient inquires of a hospital, “Do you accept the XYZ medial plan?” an affirmative answer will mean that all doctors, nurses, lab technicians, and anesthesiologists will be covered by the same reply. People and firms who do not agree to accept the fees of that plan will not be allowed to work at the hospital. They can choose to work elsewhere.

The reason this is critical, is that once admitted to the hospital, a patient does not get to choose which anesthesiologist will participate in the procedure. One meets the anesthesiologist minutes before being rendered unconscious. The anesthesiologists who practice at the hospital have a monopoly on all the anesthesiology business and should be regulated and required to “accept” the insurance programs that the hospital itself accepts. If they do not like the requirement rates of the insurance programs accepted by the hospitals where they work, they can seek changes or they can choose to work elsewhere.— steven epstein

While this rant sounds like it came from a disgruntled surgeon, it could just as easily have come from a patient suddenly faced with a large anesthesia bill they were not expecting. I've had patients ask me whether I accepted their insurance. If it's Medicare, that's a no brainer. But unless I call my business office, I really couldn't tell you which insurance companies, other than one or two offhand, that our group accepts. I've never had a patient write me a nasty letter afterwards saying they felt deceived by our insurance acceptance so I presume they were fine with our insurance coverage.

What has been the experience of anesthesiologists out there in regards to this issue? Are we being needlessly criticized for not accepting the same insurance policies as the surgeons? Would we then be beholden to the surgeons and the hospital to accept some insurance contracts but not others thus limiting our ability to negotiate a fair rate of reimbursement?