Anesthesiology APPLIED Exam › Ambulatory, non-OR and special populations

Anesthesia billing, medical direction and compliance

Ambulatory, non-OR and special populations·~5 min read· Physician-reviewed✓ Sourced · 9

Stem

You are directing CRNAs in four overlapping rooms. In room 1, a 72-year-old man, ASA physical status 3, a Medicare beneficiary, has a total hip arthroplasty under general anesthesia. Anesthesia time is 2 hours 30 minutes, and the procedure's anesthesia base value is 8 units. You did his preoperative evaluation, were present for induction and emergence, and checked on the room twice during the case.

Question

How is your work in room 1 billed to Medicare, and what must be true for it to qualify as medical direction?

Ideal answer

HeadlineBase units plus time units, times the conversion factor, split equally with the CRNA, but only if I met all seven medical direction steps.

Units first: 8 base plus 10 time. Medicare divides actual minutes by 15, so 150 minutes is 10.0 units; 18 in all.¹
Times the 2026 national factor, $20.4976. About $369 before locality: half to me (QK), half to the CRNA (QX).²^,1
All seven steps, personally or by my group. Pre-anesthetic evaluation, the plan, the most demanding parts including induction and emergence, qualified people for the rest, frequent monitoring, immediate availability, post-anesthesia care.¹
Document each step in the record. My evaluation, presence at induction and emergence, monitoring and post-anesthesia care, or the claim fails audit.¹

Watch for: a fifth case or other services drops it to supervision; leaving the immediate area beyond short durations fails direction.¹

Breaking down the answer

Modifiers name the model — AA personal; QY one CRNA; QK two to four concurrent; AD over four; QX directed CRNA, QZ undirected; QS monitored anesthesia care; GC residents.¹ Changes if: both of us were necessary in one case: AA plus QZ, full fee each.¹
Concurrency counts every patient — four overlapping rooms are four even if only one is Medicare.¹ Brief nearby emergencies, a labor epidural, PACU checks, receiving the next patient and scheduling do not break direction.¹ Changes if: an emergency takes extended time.
Supervision pays far less — over four concurrent cases, or other services while directing: three base units, plus one time unit if I document presence at induction.¹ Changes if: staffing ratios rise; the group's revenue model changes with them.
Teaching rules differ — full fee for two concurrent resident cases, or one resident plus one directed case, if present for all critical or key portions and immediately available; AA with GC.¹ Changes if: present only for pre- and postoperative visits; not payable.¹
Modifying units — some payers add physical status units, P3 one, P4 two, P5 three;³ and qualifying circumstances: extreme age, under 1 or over 70, 99100, one; hypothermia or controlled hypotension five; emergency two.⁴ Changes if: Medicare; it recognizes neither, so his total stays 18.⁴
MIPS in 2026 — threshold 75 points; quality 30%, cost 30%, improvement activities 15%, interoperability 25%;⁵ an anesthesiology MVP remains.² Changes if: below 75; a 2028 payment penalty.²
Coding integrity is tested — the outline names documentation compliance, coding integrity, audits and denials.⁶ Changes if: the record and the claim disagree; the claim must match an accurate record.

Follow-up question

Your group's anesthesia record template auto-fills "present for induction and emergence" on every directed case. Last Tuesday you were placing a block in another room during room 2's emergence, and a partner shrugs: "Everyone documents it that way." What do you do?

Follow-up answer

HeadlineThat entry is false, and a claim built on it is a false claim. I correct my record and take the template to compliance.

I amend room 2's record with a dated late entry stating who was present at emergence, so the claim can be corrected. Under the False Claims Act, "knowingly" includes reckless disregard and needs no intent to defraud; liability is three times the government's damages plus a penalty per claim,⁷ $14,308 to $28,619 since 2025.⁸ OMB Memorandum M-26-11 cancelled the 2026 adjustment.⁹ I ask compliance to remove the auto-fill, audit past claims and repay any overbilling.

Pitfalls that cost points

Insisting one anesthesiologist personally covers every element; partners may share them when the chart names who did which.¹
Rounding time up to whole 15-minute units; Medicare takes actual minutes and rounds units to one decimal place.¹
Charting a different anesthesia time from the CRNA's; the directing anesthesiologist ordinarily reports the same time.¹

Rapid-fire

Q: When does anesthesia time start and stop? A: It starts when I begin preparing the patient in the OR or equivalent area, and stops when he can be safely placed under postoperative care.¹

Q: What were the 2026 anesthesia conversion factors? A: $20.4976 nationally and $20.5998 for qualifying APM participants, against $20.3178 in 2025.²

Q: Do I bill time for daily epidural management, 01996? A: No; Medicare recognizes no time units for it.¹

Q: Can I bill a central line separately? A: Yes, when medically necessary and not bundled: pulmonary artery and central lines, emergency intubation and critical care visits.¹

Numbers to know

Item	Value
Time unit	15 minutes, to one decimal¹
Medical direction	Up to 4 concurrent; 50% each to physician and CRNA¹
Medical supervision	3 base units, plus 1 if present at induction¹
2026 anesthesia conversion factor	$20.4976 ($20.5998 qualifying APM)²
MIPS threshold 2026	75 points⁵
False Claims Act penalty per claim	$14,308 to $28,619⁸

Sources

1.Medicare Claims Processing Manual, Chapter 12, Section 50 (Payment for Anesthesiology Services) and Section 100.1.2, item 4 (teaching anesthesiologists) · CMS, 2026 · cms.govChapter revision 13753, issued May 7, 2026; section 50 text from Rev. 3747 (2017); teaching anesthesiologist rules in section 100.1.2, item 4; CRNA modifiers QX and QZ in section 140.
2.CMS Finalizes Policies Undermining Anesthesia Payments and Ability for Anesthesiologists to Meaningfully Participate in the Quality Payment Program · ASA Washington Alert, 2025 · asahq.orgCY 2026 Physician Fee Schedule final rule, released October 31, 2025: anesthesia conversion factors and MIPS changes.
3.Anesthesiology Methodology (Workers' Compensation Health Care Services Rules), 2017 · State of Michigan Workers' Disability Compensation Agency, 2017 · michigan.govA payer's published unit values for physical status modifiers and code 99140; values match the ASA Relative Value Guide convention, which was not itself reviewed.
4.Anesthesia Payment Basics Series #5: Qualifying Circumstances · ASA Timely Topics in Payment and Practice Management, 2019 · asahq.org99100 1 unit (younger than 1 year or older than 70), 99116 and 99135 5 units, 99140 2 units; CMS does not recognize qualifying circumstances for additional payment.
5.2026 MIPS Final Policies · American College of Allergy, Asthma and Immunology, 2025 · college.acaai.orgSummary of the CY 2026 Quality Payment Program final rule; category weights apply to all MIPS clinicians.
6.Initial Certification Content Outline · ABA · theaba.orgSection II.E.5 (healthcare funding and payment; anesthesia care team; documentation, coding and billing: coding integrity, audits, denials) and II.E.6.e.3.a (Federal Quality Payment Program).
7.31 U.S.C. 3729, False claims · U.S. Code (govinfo, 2023 edition) · govinfo.gov
8.Department of Justice Announces 2025 Inflationary Adjustments to FCA Penalties · Sidley Austin FCA blog, 2025 · fcablog.sidley.com
9.Civil Monetary Penalty Inflation Adjustment (no adjustment for 2026) · Railroad Retirement Board, Federal Register 2026-10206, 2026 · public-inspection.federalregister.govCites OMB Memorandum M-26-11 (April 17, 2026) cancelling the 2026 annual civil penalty adjustment; agencies keep 2025 amounts. Lists the FCA maximum as $28,618 against DOJ's $28,619.

Facts on this page were checked against these sources on Oct 25, 2026. Guidelines change; confirm doses against current institutional protocols.