Anesthesia services are reimbursed differently from other procedure codes. Part of the payment for anesthesia is based on 'base units,' which are assigned to anesthesia CPT codes by the Centers for Medicare & Medicaid Services (CMS). The remainder of the payment allowance is based on the time the patient was 'under anesthesia.' Both the base and time units are then multiplied by an anesthesia conversion factor (CF), which CMS releases annually and is specific to the locality where the anesthesia service is rendered.
The formula to calculate the allowed amount for anesthesia is:
(Base Units + Time (in units)) x CF = Anesthesia Fee Amt
The base units assigned to anesthesia CPT codes are available on the CMS Web site in the Internet Only Manual (IOM) 100-04, Chapter 12, Section 50.K (PDF, 902 KB)
Actual anesthesia time in minutes is reported on the claim. For example, 17 minutes of anesthesia is submitted to Medicare as '0017' in the units field (Item 24G of the CMS 1500 claim form. Carriers compute time units by dividing reported anesthesia time by 15 minutes (17 minutes = 1.13 units).
NOTE: This method is used to calculate anesthesia services that are 'personally performed.' Services that are 'medically directed' are reimbursed at 50 percent of the amount received if the service was personally performed. To find the definitions of 'Personally Performed', 'Medically Directed,' and to learn about other payment exceptions, please refer to Sections 50.B – 50.F of CMS Pub.100-04, Chapter 12.
Reminder:
Carriers may not allow separate payment for the anesthesia service performed by the physician who also furnishes the medical or surgical service. In that case, payment for the anesthesia service is made through the payment for the medical or surgical service. For example, carriers may not allow separate payment for the surgeon’s performance of a local or surgical anesthesia if the surgeon also performs the surgical procedure.