Anesthesia is the one specialty that pays by arithmetic. Take the base units for the anesthesia code, add one unit for every 15 minutes the anesthesia practitioner was with the patient, multiply by a conversion factor that changes with the locality, and the allowed amount falls out. Every number in that product comes off the anesthesia record, so the record decides the money. A group that prices the formula before it bills can see which cases will not pay.
What this covers
- Medicare pays (base units + time units) times a locality conversion factor, and allows no modifier units for age, health status or unusual circumstances.
- Time units come from actual minutes divided by 15, and the MAC rounds the result to one decimal place.
- Modifier AA pays 100 percent. QY, QK and QX pay 50 percent to each side. AD caps the physician at three base units per case.
- Medical direction of two to four concurrent cases requires all seven activities and the documentation to prove them.
- CMS base units run from 1 unit for a burn add-on to 30 for a liver transplant. The value is fixed by code.
The formula is short. Each input inside it is a claim about the record.Base units, minutes and the staffing modifier are read off the anesthesia record, in that order.
The Anesthesia Payment Formula
Medicare pays the lesser of the actual charge or the anesthesia fee schedule amount, and that amount is a product: allowable base units plus allowable time units, multiplied by an anesthesia conversion factor specific to the payment locality (Medicare Claims Processing Manual, Chapter 12, section 50).
The base unit is the value assigned to each anesthesia code for everything other than anesthesia time. It covers the usual preoperative and postoperative visits, the fluids and blood given as part of the care, and monitoring services (42 CFR 414.46). Medicare values come from the 1988 ASA Relative Value Guide, and CMS sends each code’s value to the MACs in the annual HCPCS file.
| Anesthesia code | What it covers | Base units |
|---|---|---|
| 00100 | Salivary gland procedures, including biopsy | 5 |
| 00840 | Intraperitoneal procedures in the lower abdomen, including laparoscopy | 6 |
| 01402 | Total knee arthroplasty | 7 |
| 01214 | Total hip arthroplasty | 8 |
| 00796 | Liver transplant, recipient | 30 |
The conversion factor does the regional work. For 2026 the participating physician factor runs from $19.54 in Idaho to $28.15 in Alaska (Noridian, J-F Part B). A knee arthroplasty at 01402 is 7 base units plus 129 documented minutes, or 8.6 time units, so 15.6 units: $320.42 in the rest of Washington and $439.14 in Alaska.
Same code and same minutes, 37 percent more money in one locality than another. The unit count is the practice’s work. The factor is geography and contract.
Commercial factors sit well above Medicare. The ASA reported a median commercial factor of $78.00 per unit in its 2022 survey against a Medicare factor of $21.5623. Treat the Medicare number as a floor in contract talks.
Where Base Units Come From
A base unit belongs to the code, not the case. A short knee arthroplasty and a long one bill the same 7 base units, and the extra hours land in time units. Medicare reports one anesthesia code per procedure, so the code that matches the operative note sets the largest fixed number on the claim.
Base unit values are payer property. Medicare uses its annual HCPCS file. Commercial payers usually start from the ASA Relative Value Guide and some keep their own values, and Medicaid programs publish their own tables. Keep one base unit table per payer.
01999, the unlisted anesthesia procedure code, carries zero base units in the CMS file. An unlisted case needs the operative note attached to the claim and a price argued from comparable codes.
Multiple procedures under one anesthetic change the arithmetic. Report the anesthesia code with the highest base unit value, add modifier 51, and put the total anesthesia time for all of the procedures on that line. Split bilateral procedures onto separate lines and the time units get counted twice.
Two details catch coders out. The pre-anesthetic examination and evaluation sits inside the base unit and never adds minutes (NCCI Policy Manual, Chapter II). The routine postoperative evaluation sits there too, so once the practitioner has safely placed the patient under postoperative care, neither extra time units nor an evaluation and management code may be reported for it.
Time Units and the Clock
Anesthesia time is the period during which the anesthesia practitioner is present with the patient. It starts when the practitioner begins to prepare the patient in the operating room or an equivalent area and ends when the practitioner is no longer furnishing anesthesia services, which is when the patient may be safely placed under postoperative care. The period is continuous, and time around an interruption counts if care is continuous around it (42 CFR 414.46).
The practitioner reports actual minutes. The MAC divides the reported minutes by 15 and rounds the result to one decimal place. CPT code 01996, daily management of an epidural or subarachnoid catheter, carries no time units. Transport, positioning and the recovery handoff add nothing either.
| Payer or policy | How 129 documented minutes is priced |
|---|---|
| Medicare | 129 divided by 15, rounded to one decimal: 8.6 time units |
| A payer that bills whole units only | The same 129 minutes rounds up to 9 time units |
| Payer policy example (Moda Health, from March 15, 2026) | Fractional units to two decimals: 80 minutes is 5.33 units, and start and stop times must appear on the claim |
The gap rule is narrow. In the NCCI example, a cataract patient takes sedation for the block, needs no monitoring for a long interval, then needs monitoring again for the extraction. The block and the procedure count toward anesthesia time. The interval and the recovery do not, unless the practitioner monitored continuously through the gap and performed no other service.
A case recorded from 7:57 to 8:38 is 41 minutes, or 2.73 time units. Tidy those times to 7:55 and 8:40 and the case becomes 45 minutes and 3.0 units, about $5.55 of payment at $20.54 a unit that the record does not support.
The Modifier That Sets the Rate
One modifier states how the case was staffed, and it moves the payment more than any other coding decision on the claim.
| Modifier | What it states | Medicare payment effect |
|---|---|---|
| AA | Personally performed by the anesthesiologist | 100 percent of the allowance |
| QK | Medical direction of two, three or four concurrent procedures | 50 percent to the physician |
| QY | Medical direction of one CRNA or anesthesiologist assistant | 50 percent to the physician |
| QX | CRNA or assistant service under medical direction | 50 percent to the CRNA or assistant |
| QZ | CRNA service without medical direction | 100 percent to the CRNA |
| AD | Medical supervision, more than four concurrent procedures | Three base units per case, plus one time unit if the record shows presence at induction |
| QS, G8, G9 | Monitored anesthesia care and its deep or markedly invasive subsets | Informational, no payment effect |
| GC | Service performed by a resident under a teaching physician | Used with one of the payment modifiers above |
Medicare requires a staffing modifier on every anesthesia claim. Many commercial payers do not use the Q family at all and pay the full allowance to the clinician named on the bill. Medicare modifier logic applied to a commercial claim can manufacture a denial.
Medicare allows no modifier units for patient health status, risk, age or unusual circumstances, and the regulation says so outright (42 CFR 414.46). The ASA Relative Value Guide still assigns units to those situations: +1 for extreme age, +5 for total body hypothermia, +5 for controlled hypotension, +2 for emergency conditions. ASA commercial surveys have found roughly 85 percent of payers covering qualifying circumstance codes and more than 80 percent covering physical status. Where a payer honors them, bill them. Where it does not, they invite a question.
Medical Direction: Seven Activities, Four Cases
Payment at the medically directed rate requires the physician to perform all seven activities for each patient (42 CFR 415.110): perform a pre-anesthetic examination and evaluation; prescribe the anesthesia plan; personally participate in the most demanding aspects of the plan, including induction and emergence where applicable; ensure that procedures the physician does not perform are performed by a qualified individual; monitor the course of anesthesia at frequent intervals; remain physically present and available for immediate diagnosis and treatment of emergencies; provide indicated post-anesthesia care.
The physician also directs no more than four anesthesia services concurrently and performs no other services while directing them. One directed case is billed QY. Two through four concurrent cases are billed QK. The physician reports the same anesthesia time the CRNA reports, and each side is paid 50 percent of the personally performed allowance.
Concurrency is counted in cases, not in Medicare cases. Three concurrent cases, two of them commercial, is still three. A tracker that logs only Medicare cases understates the ratio.
Short interruptions do not break medical direction: an emergency of short duration in the immediate area, an epidural or caudal anesthetic for labor pain, periodic monitoring of an obstetric patient, receiving the next patient into the suite, checking or discharging recovery patients, and scheduling matters. Leaving the immediate area for anything longer does not meet the requirements.
Above four concurrent cases, or when the physician performs other services while directing, payment drops to the medically supervised rate: three base units per case, plus one time unit if the record shows presence at induction. The 15.6 unit knee case pays the physician $160.21 at QK and $82.16 at the supervision rate. A group may split the seven activities between physicians if the record identifies who furnished each part.
Documentation Behind Concurrent Cases
The record has to answer a reviewer’s question months later. The duty falls on the physician, who must document the pre-anesthetic examination and evaluation, the post-anesthesia care provided, and presence during the most demanding procedures, including induction and emergence where applicable (42 CFR 415.110). The claims processing manual adds presence during some portion of the monitoring.
Medicare contractors work this file. MACs sample claims for medical direction of four or fewer concurrent procedures and may request the names of the procedures performed and of the anesthetists medically directed. A physician who cannot supply documentation for the sampled claims must file documentation with every subsequent claim before payment is made.
Pick the anesthesia code that matches the procedure performed.
Medicare list, ASA guide or Medicaid table. Use the payer’s own values.
Divide by 15 and keep the decimal the payer keeps. Take the start and stop times from the record.
Staffing, concurrency at the peak overlap, and where the physician was in each phase.
Units, minutes, modifier and concurrency count, before the claim leaves.
- Names of the procedures and the individuals directed for every medically directed case.
- Pre-anesthetic examination and evaluation documented by the physician, not by the CRNA.
- Post-anesthesia care and presence during induction and emergence documented.
- Anesthesia start and stop times matching the reported minutes to the exact minute.
- Concurrent case count at the peak overlap, Medicare and non-Medicare cases both counted.
- Base unit and conversion factor taken from the payer’s current published file.
A group that rebuilds concurrency from the schedule after a request arrives is already behind. Log case start and stop times and the room count as the day runs.
Anesthesia claims are read against a published formula, so a practice can run the same test the payer runs. Recomputed units, a modifier that matches the record and a clean concurrency log cover most of the exposure. The rest is a specialty medical billing workflow that treats every minute as billable, and the coding side belongs to medical coding and billing.
Anesthesia billing unit questions
For Medicare, add the base unit assigned to the anesthesia code to the time units, where time units are the documented minutes divided by 15 and rounded to one decimal place. Multiply the total by the locality conversion factor. Physical status and qualifying circumstance units are not paid by Medicare, though many commercial payers include them.
It is the value assigned to each anesthesia code for everything other than anesthesia time. The base unit covers the usual preoperative and postoperative visits, monitoring, and the fluids and blood given as part of the care. Medicare values come from the 1988 ASA Relative Value Guide, and CMS publishes the value for each code.
Four. Payment at the medically directed rate requires two, three or four concurrent cases with all seven required activities performed for each patient. At five concurrent cases, or when the physician performs other services while directing, payment drops to the medical supervision rate of three base units per case.
No. The pre-anesthetic examination and evaluation is part of the anesthesia service and sits inside the base unit value of the code, so it never adds minutes. If the surgery is canceled after the evaluation, Medicare can allow an evaluation and management service instead, reported as a separate claim rather than as anesthesia time.
No. The regulation states that modifier units are not allowed and names units charged for patient health status, risk, age or unusual circumstances as the units it excludes. Many commercial payers do add units for physical status P3 and above, and ASA surveys have found roughly 85 percent of payers covering qualifying circumstance codes.
The pre-anesthetic examination and evaluation, the anesthesia plan, participation in the most demanding parts of the case including induction and emergence, monitoring at frequent intervals, availability for emergencies, and indicated post-anesthesia care. Medicare contractors can also request the names of the procedures performed and the individuals directed.
The bottom line
Anesthesia billing is unforgiving in a useful way. The formula, the base units and the conversion factor are published, so a practice can price a case before it bills it and check the payment after it lands. The exposure sits in the parts that are not published: the minutes on the record, the staffing modifier, and the documentation behind a concurrent case.
Are your anesthesia claims paid on the units you documented?
Send us a month of anesthesia claims with the matching anesthesia records. We will recompute base units, time units and modifiers against the payer’s own files, flag every case priced at the supervision rate, and show you the dollars sitting in the gap. MedFactor works with specialty practices.
Request a free anesthesia billing auditBase unit tables, time unit rounding and conversion factors differ by payer, state and contract year, and Medicare rules change with the annual fee schedule. Confirm the current rule with your MAC or the payer’s published policy before you change how a case is billed; this is billing guidance, not legal advice.
