Outsourced vs. In-House Anesthesia Billing Services: Finding the Right Revenue Partnership

The American Medical Association (AMA) estimates that billing errors cost practices $36 billion annually from lost revenue, denied claims, and potential fines. Anesthesia, with its unique billing complexities, may bear a disproportionate share of the burden. By some studies, the error rate for Anesthesia has been as high as 38%, which is well above the 2024 Centers for Medicare & Medicaid Services (CMS) fee-for-service error rate of 7.66%.

What makes Anesthesia billing so complex? A confluence of several factors:

• Time-Based Payments: Where surgeons and other specialists’ fees are paid as a negotiated rate per CPT code, most Anesthesiology services are compensated according to a time-based formula. This can be a big mental shift for revenue cycle management (RCM) professionals who are used to billing for other specialties.

• Charge-Capture Challenges: There are exceptions to the time-based payment rule—central-line placements and Anesthesia blocks, for example—and they are easy to miss from a charge-capture standpoint. Within a time-based procedure (and sometimes separately), anesthesiologists frequently deliver additional flat-fee services. Documentation for these flat fee procedures can be challenging to find, or non-existent, causing significant opportunity for revenue leakage.  

• Modifiers: Special circumstances can increase time-based payments, such as patient age or comorbidities. Again, the challenge is capturing all modifiers accurately to ensure proper payment.

To these Anesthesia-specific challenges, we must also add the challenges all facility-based physician groups face. In the last two decades, Medicare physician payments effectively declined 29%, according to the American Medical Association. The broader healthcare reimbursement environment has steadily devolved for providers, as well, requiring more documentation and more effort to secure their share of declining reimbursement. Recent data from the American Hospital Association show nearly 80% of provider organizations believe their experience working with commercial payers is getting worse.

With both Anesthesia-specific and industry-wide constraints, physician groups must work harder than ever to recover the Anesthesia payments they are due. Whether they outsource to an RCM partner for Anesthesia billing services or perform the function in-house, the following strategies and services can optimize revenue and ensure long-term sustainability.

Specialized Expertise

Anesthesia billing professionals not only have to become experts in the specifics of Anesthesia billing, they must also master a continually evolving regulatory landscape. Medicare billing guidelines, payer policies, and rules for programs such as Medicare’s Merit-based Incentive Payment System (MIPS) are constantly changing. It takes dedicated resources to follow the changes, implement RCM strategies to mitigate the revenue impact, and educate physicians on how to remain in compliance.

Scalability

Case volumes and staffing can vary over time. Smaller RCM teams may struggle to keep up during periodic spikes in practice procedure volume, the addition of new anesthetizing sites, or unpredictable availability of their labor force. When this happens, there is a heightened chance for billing errors as the volume of claims may exceed the underlying resources. Anesthesia billing teams must have the scale to ensure the same quality of billing is being provided to each claim.

Purpose-Built Billing Systems

Specialty-specific billing platforms are essential to manage the nuances of that specialty. This is particularly important in Anesthesia billing as a purpose-built platform ensures that complexities like time-based payments and modifiers are captured. Whether in-house or outsourced, your RCM team should be applying the best platform solution for Anesthesia payments.

Data & Analytics

Despite all the current obstacles to healthcare reimbursement, physician groups have one powerful tool to stay ahead of the curve—their data. By analyzing both benchmarking data and their own reimbursement data, practices can build effective strategies to improve profitability. A data-driven approach can proactively uncover and correct internal and external RCM issues that lead to claim denials, down-codes and underpayments, and other payment delays.

This type of analysis requires a robust platform, however. Attempting to analyze data manually is time-consuming, error-prone, and the results often arrive too late to be proactive.

End-to-End Anesthesia Practice Management

With such thin margins for profitability, basic billing and coding services are table stakes. Anesthesia practices need expertise to negotiate more favorable payer contracts, physician education to improve documentation, benchmarking data to support subsidy negotiation, and more. High-touch, end-to-end services like these can mean the difference between surviving and thriving.

Making the Right Choice for Your Practice

Anesthesia practices may grapple with the decision between in-house and outsourced billing services. Ultimately, it depends on the type of investment you wish to make in specialized expertise.

Small practices frequently choose an outsourced model; it makes more sense to leverage the expertise of an external RCM team who has invested in expertise on their behalf. Larger organizations have a bigger decision to make, because they can be tempted to leverage their internal scale to share RCM services across acute and ambulatory billing. Often, larger organizations focus their internal efforts on high-dollar, low-volume acute-care billing, deprioritizing the low-dollar, high-volume work of ambulatory billing. Unfortunately, those low dollars can add up quickly and lead to material losses. In addition, the use of non-specific resources (such as coders) for professional Anesthesia billing can lead to less than stellar results.

Using Our Anesthesia Billing Services for Practice Success

Ventra Health works with practices of all sizes, partnering with physicians and administrators across private practices, hospitals, and health systems to maximize revenue with data-driven solutions. We have invested in business intelligence technology and exceptional talent to help our clients get paid appropriately for the services they deliver to their patients and hospitals.

As a result, we can provide services that are uncommon in the market. Our Ventra-owned Enterprise Service Delivery teams make it possible to process claims 24/7 so our clients get paid faster. Our Performance Surveillance Team is a team of data scientists focused solely on the daily monitoring of more than 200 audit controls, watching for issues that may impact performance and working cross-departmentally to address them proactively. Our Client Success and Provider Education specialists are RCM subject matter experts and highly analytical business partners. And, we empower our teams with vSight™, our powerful Data & Analytics platform, which provides our clients with direct access to actionable insights into their practices’ performance and health.

An outsourcing partner for Anesthesia billing services can be the most important advocate to help your practice thrive in a challenging healthcare reimbursement environment. The increased revenue achieved with specialized expertise and dedicated attention will ensure your practice continues to deliver exceptional patient care into the future.