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The Anthem Series ~ by Gordon Morewood, MD, MBA, FASE, FASA
The Anthem Debacle
On November 1st, 2024, Anthem Blue Cross Blue Shield disclosed plans to limit the anesthesia time that could be claimed with each anesthesia CPT code. One month later, on December 5th, Anthem announced the abandonment of this policy.
What exactly happened? What did the policy actually mean? Why would a major commercial insurer suggest such a policy? Why did they completely give up on the idea just five weeks later?
The Background Story
The current system for billing anesthesia services was introduced by CMS in 1992, with only minor changes since then.
When filing a claim for clinical anesthesia care, each episode is described using one of 275 anesthesia-specific Common Procedural Terminology (CPT) codes. Each anesthesia CPT code is linked to surgery on a defined anatomical region and/or a particular surgical technique. Each anesthesia code is allocated a set number of ‘base units.’ Anesthesia time is usually reported as one ‘time unit’ per 15 minutes. The claim for a specific anesthetic is determined by the sum of the base units plus the time units, multiplied by the specific insurer’s anesthesia ‘conversion factor.’ (Eg: a carotid endarterectomy that required 3 hours to complete through an insurer with a conversion factor of $80 / unit would pay: [10 base units + 12 time units] * $80/unit = $1760)
Over the past 30 years, this payment system for anesthesia services has been adopted by every single major government and commercial insurer across the U.S.
So why would Anthem decide to abruptly and unilaterally change this system?
Who The Heck is Anthem?
Anthem is the operating brand name of Elevance Health Incorporated. This for-profit publicly traded corporation is the second largest health insurance provider in the U.S. and the largest insurer in the Blue Cross Blue Shield Association.
Anthem operates health insurance plans in 15 states, providing coverage to almost 50 million individuals. In 2023, Anthem reported $170 billion in revenue and generated $8 billion in free cash flow. These profits funded healthy dividend payments to investors, stock buybacks worth billions to boost Elevance’s share price, and a $22 million compensation package for the CEO.
Meanwhile, unverified raw data collected by U.S. government agencies suggests that Anthem rejects one of every four claims filed under its commercial health insurance products.
So, what was Anthem up to with their new anesthesia policy?
https://www.elevancehealth.com/newsroom/elv-quarterly-earnings-q4-2023
https://www.beckerspayer.com/payer/elevance-healths-5-highest-earning-executives-in-2023.html
What Were They Really Going to Do?
On November 1, 2024, Anthem announced plans to use data from a publicly accessible CMS website to limit the maximum anesthesia time claimed for each anesthesia CPT code. The policy noted that any claim submitted with “reported time above the established number of minutes will be denied.”
Importantly, CMS does not limit anesthesia time, nor does it provide any explanation on its website regarding what the data in the spreadsheet actually represents. An official inquiry from the ASA to CMS requesting an explanation of the posted times remains unanswered.
In addition, the Anthem policy falsely claimed that “this update will not change industry standard coding requirements or the American Society of Anesthesiologists’ (ASA) anesthesia formula.” In reality, the Anthem policy would have completely upended long-established, universally accepted standards for filing anesthesia claims.
But how could the anesthesiology community fight back against this unilateral change?
https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/clm104C12.pdf