Tuesday, June 29, 2010

AA Modifier - Anesthesia Services Performed Personally by Anesthesiologist

AA Modifier

Description : Anesthesia Services Performed Personally by Anesthesiologist

Required for Claims : Critical Access Hospitals Electing the Optional Payment Method (Method II)
Type of Bill: 85X

Coding Guidelines : AA modifier should be applied to revenue code 0963 with an anesthesia CPT code (00100-01999)

General Guidelines -

• When a medically necessary anesthesia service is furnished within a Health Professional Shortage area (HPSA) area by a physician, a HPSA bonus is payable. The modifier signifies that a physician performed the anesthesia service.

• Modifier –AA result in physician payment at 80% of the allowed amount.

Reimbursement for Anesthesia Administered by an Anesthesiologist

• Anesthesiologist services billed with modifier AA, reporting anesthesia services performed personally by the anesthesiologist, are reimbursed at 100 percent.



Second Attending Anesthesiologist or CRNA

When it is necessary to have a second attending anesthesiologist or CRNA assist with the preparation and conduction of anesthesia, these circumstances should be substantiated by special report. Reimbursement is as follows:

• In the case where an anesthesiologist assumes the role of second anesthesiologist, both anesthesiologists should report their services with modifier AA. The first anesthesiologist will be reimbursed for the full basic value plus time and modifying units at 100 percent. The second anesthesiologist will be reimbursed for a basic value of five units plus time and modifying units at 100 percent.

• When a CRNA assumes the role of second anesthesiologist, a medical direction situation does not exist and the anesthesiologist should bill with modifier AA and the CRNA should bill with modifier QZ. The first anesthesiologist will be reimbursed for the full basic value plus time and modifying units at 100 percent. The CRNA will be reimbursed for a basic value of five units plus time and modifying units at 100 percent.


AA Anesthesia Services performed personally by the anesthesiologist: Report modifier AA when the anesthesia services are personally performed by an anesthesiologist. Claims submitted with modifier AA are reimbursed at 100 percent.

Reimbursement Calculations :

Data elements needed to calculate payment:
o HCPCS plus modifier
o Base Units
o Time units, based on standard 15 minute intervals
o Locality specific Anesthesia Conversion Factor
o Allowed amount minus applicable deductions and coinsurance amounts

Formula 1: Calculate payment for a physician performing anesthesia alone
HCPCS = XXXXX
Modifier = AA
Base Units = 4
Anesthesia time (assume 60 minutes) = 4 units (60/15 min interval)
Sum of Base Units plus Time Units = 4 + 4 = 8
Locality specific anesthesia conversion factor = $17.00 (varies)
Coinsurance = 20%

Example: Physician personally performs the anesthesia case
Base units plus time units: 4 + 4 = 8
Total units times the Anesthesia Conversion Factor times 0.80:
8 x $17 = (136.00- deductible*) x 0.80 = $108.80
Payment amount times 115% for CAH Method II payment:
108.80 x 1.15 = $125.12 (payment amount)
125.12 x 0.10 = $12.51 (HPSA bonus payment)




Section 9320 of OBRA 1986 provides for payment under a fee schedule to certified registered nurse anesthetists (CRNAs) and anesthesia assistants (AAs). CRNAs and AAs may bill Medicare directly for their services or have payment made to an employer or an entity under which they have a contract. This could be a hospital, physician or ASC. This provision is effective for services rendered on or after January 1, 1989.

Anesthesia services are subject to the usual Part B coinsurance and deductible and when furnished on or after January 1, 1992 by a qualified nonphysician anesthetist are paid at the lesser of the actual charge, the physician fee schedule, or the CRNA fee schedule. For services furnished after January 1, 1996, when separate conversion factors for CRNAs were eliminated, anesthesia services furnished by a qualified nonphysician anesthetist are paid at the lesser of the actual charge, the physician fee schedule, or the anesthesia fee schedule. Payment for qualified nonphysician anesthetist services is made only on an assignment basis.



Qualified Nonphysician Anesthetists


For payment purposes, qualified nonphysician anesthetists include both CRNAs and AAs. Thus, the term qualified nonphysician anesthetist will be used to refer to both CRNAs and AAs unless it is necessary to separately discuss these provider groups.

An AA is a person who:

• Is permitted by State law to administer anesthesia; and who

• Has successfully completed a six-year program for AAs of which two years consist of specialized academic and clinical training in anesthesia.

In contrast, a CRNA is a registered nurse who is licensed by the State in which the nurse practices and who:

• Is currently certified by the Council on Certification of Nurse Anesthetists or the Council on Recertification of Nurse Anesthetists, or

• Has graduated within the past 18 months from a nurse anesthesia program that meets the standards of the Council of Accreditation of Nurse Anesthesia Educational Programs and is awaiting initial certification.



- General Billing Instructions


Claims for reimbursement for qualified nonphysician anesthetist services should be completed in accord with existing billing instructions for anesthesiologists with the following additions.

• If an employer-physician furnishes concurrent medical direction for a procedure involving CRNAs and the medical direction service is unassigned, the physician should bill on an assigned basis on a separate claim for the qualified nonphysician anesthetist service. If the physician is participating or takes assignment, both services should be billed on one claim but as separate line items.

• All claims forms must have the provider billing number of the CRNA, AA and/or the employer of the qualified nonphysician anesthetist performing the service in either block 24.H of the Form CMS-1500 and/or block 31 as applicable. Verify that the billing number is valid before making payment.

Payments should be calculated in accordance with Medicare payment rules in §140.3. Contractors must institute all necessary payment edits to assure that duplicate payments are not made to physicians for CRNA or AA services or to a CRNA or AA directly for bills submitted on their behalf by qualified billers.


CRNAs are identified on the provider file by specialty code 43. AAs are identified on the provider file by specialty code 32.


Payment Conditions for Anesthesiology Services

Personally Performed Services

Pursuant to 42 CFR 415.170, services furnished in teaching settings are paid under the physician fee schedule if the services are:

• Personally furnished by a physician who is not a resident;

• Furnished by a resident where a teaching physician was physically present during the critical or key portions of the service; or

• Certain E/M services furnished by a resident under the conditions contained in §100.01.C. In all situations, the services of the resident are payable through either the direct payment or reasonable cost payments made by the Fiscal Intermediary.

• The physician is involved in the training of physician residents in a single anesthesia case, two concurrent anesthesia cases involving residents or a single anesthesia case involving a resident that is concurrent to another case paid under the medical direction rules. The physician meets the teaching physician criteria in Section 100.1.4 of the IOM (see link above) and the service is provided on or after January 1, 2010.

• The physician is continuously involved in a single case involving a student nurse anesthetist. The physician and the Qualified Nonphysician Anesthetist (or AA) is involved in one anesthesia case and the services of each are found to be medically necessary. Documentation must be submitted by both the Qualified Nonphysician Anesthetist and the physician to support payment of the full fee for each of the two providers.

The physician reports HCPCS modifier AA and the Qualified Nonphysician Anesthetist reports HCPCS modifier QZ for a non-medically directed case.

Concurrent Medically Directed Anesthesiology Procedures

Medical direction occurs if the physician medically directs qualified individuals in two, three or four concurrent cases and the physician performs the following activities:

• Performs a pre-anesthetic examination and evaluation.

• Prescribes the anesthesia plan.

• Personally participates only in the most demanding procedures of the anesthesia plan, including, if applicable, induction and emergence.

• Ensures that any procedures in the anesthesia plan that he does not perform are performed by a qualified anesthetist.

• Monitors the course of anesthesia administration at frequent intervals.

• Remains physically present and available for immediate diagnosis and treatment of emergencies.

• Provides indicated post-anesthesia care. For a single anesthesia case involving both a physician medical direction service and the service of the medically directed Qualified Nonphysician Anesthetist, the payment amount for each service may be no greater than 50 percent of the allowance. The total payment for both may not exceed the amount that would be paid had the
service been furnished solely by the anesthesiologist.

The physician must document in the medical record that he performed the pre-anesthetic exam and evaluation, provided indicated post-anesthesia care, was present during some portion of the anesthesia monitoring, and was present during the most demanding procedures, including induction and emergence, where indicated.


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