Anesthesiology billing is one of the few areas where two providers can bill the same case, each for half the payment, and where the clock matters more than the CPT code. A 90-minute case and a 3-hour case under the same anesthesia code pay very differently, and the modifier on each line decides whether the anesthesiologist, the CRNA, or both get paid. When the anesthesia record and the claim don’t line up, the case either pays wrong or comes back on audit.
Key Takeaways
- Anesthesia payment equals base units plus time units plus any modifying units, multiplied by the payer’s anesthesia conversion factor.
- Medicare divides reported anesthesia minutes by 15 and rounds to one decimal place, so the start and stop times in the anesthesia record set the time component.
- Medical direction (QK or QY) requires the anesthesiologist to meet and document seven steps on every case, or the case drops to medical supervision (AD).
- Medicare doesn’t pay qualifying circumstances codes separately, but many commercial payers do.
- Medicare’s 2026 anesthesia conversion factor is about $20.50, and CMS projects a 1% overall payment decline for anesthesia once all 2026 policies are counted.
How Anesthesia Payment Is Calculated
Every anesthesia claim runs through the same formula. Base units, time units, and any modifying units are added together, then multiplied by the conversion factor. An error in any one of those pieces changes the payment, and each piece follows its own rules.
Base units
Each anesthesia CPT code from 00100 through 01999 carries a base unit value from the American Society of Anesthesiologists’ Relative Value Guide. The codes are grouped by body region, and the base value reflects how difficult and risky the anesthetic is. A lens procedure carries only a few base units, while cardiac surgery with a pump oxygenator runs above 20. Medicare publishes its own base unit file each year, and most commercial payers follow the ASA values.
The anesthesia code comes from the surgeon’s procedure through the ASA crosswalk. Picking a code from the wrong procedure family changes the base value on every case it touches, which makes crosswalk accuracy one of the first things we check when a group comes to us.
Time units
Anesthesia time starts when the provider begins preparing the patient for anesthesia in the operating room or an equivalent area. It ends when the provider is no longer in personal attendance and the patient can be safely placed under postoperative care. Medicare claims report time in minutes, and the contractor converts them to units by dividing by 15 and rounding to one decimal place, as laid out in the Medicare Claims Processing Manual. A 52-minute case becomes 3.5 time units. Commercial payers often use their own intervals and rounding, and Palmetto GBA’s calculation guide walks through a worked Medicare example.
The anesthesia record is the only source for those times. A claim that bills more minutes than the record shows is an easy audit finding, and so is personally performed time that overlaps across two cases.
Conversion factor
Medicare sets a separate anesthesia conversion factor each year and adjusts it by locality. For 2026 the national rate is about $20.50, with a slightly higher rate for clinicians in qualifying alternative payment models. Commercial conversion factors are negotiated payer by payer, and because every unit on every claim gets multiplied by that number, it matters more than any other term in an anesthesia contract.
Qualifying Circumstances Codes
Four add-on codes recognize conditions that make an anesthetic riskier than its base value accounts for.
- 99100 for a patient of extreme age, younger than 1 year or older than 70
- 99116 for anesthesia complicated by total body hypothermia
- 99135 for anesthesia complicated by controlled hypotension
- 99140 for anesthesia complicated by emergency conditions
Medicare considers these part of the base units and doesn’t pay them separately. Many commercial payers add units for them, as long as the record supports the condition. Age is easy to prove, while emergency status needs a documented reason that a delay would have put the patient at risk. 99100 also isn’t reported with anesthesia codes that already account for age, such as the infant codes 00326, 00561, 00834, and 00836.
Anesthesia Modifiers
Anesthesia claims carry pricing modifiers that tell the payer who performed the service and how involved the anesthesiologist was.
- AA when the anesthesiologist personally performs the anesthetic
- QK when the anesthesiologist medically directs two, three, or four concurrent cases
- QY when the anesthesiologist medically directs one CRNA
- QX on the CRNA’s line for a medically directed case
- QZ on the CRNA’s line when no physician medically directs the case
- AD when the anesthesiologist supervises more than four concurrent cases
Under Medicare, AA and QZ cases pay the full allowance to one provider. When an anesthesiologist directs a CRNA, each provider is paid half, with the anesthesiologist billing QK or QY and the CRNA billing QX. Medical supervision under AD pays the anesthesiologist on three base units, or four if they were present at induction, with no time units at all.
A few more modifiers ride alongside the pricing modifier. Monitored anesthesia care adds QS, and teaching anesthesiologists working with residents add GC. Physical status modifiers P1 through P6 describe the patient’s ASA classification, and while Medicare doesn’t pay extra for them, some commercial payers add units for P3 and above.
The seven medical direction requirements
For every case billed as medically directed, Medicare requires the anesthesiologist to complete and document each of these steps.
- Perform a pre-anesthetic examination and evaluation
- Prescribe the anesthesia plan
- Personally participate in the most demanding parts of the plan, including induction and emergence when applicable
- Make sure any procedures in the plan they don’t perform are done by a qualified anesthetist
- 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 anesthesiologist also can’t direct more than four concurrent cases or perform other services during that time. Medicare allows a short list of exceptions, such as handling a brief emergency in the immediate area, checking on patients in recovery, receiving the next patient entering the operating suite, and scheduling. If any of the seven steps is missing from the record, Medicare treats that case as medical supervision.
CRNA Billing
How a CRNA’s claim is coded depends on whether an anesthesiologist directed the case, not on the state alone. When an anesthesiologist meets all seven steps, the CRNA bills QX alongside the anesthesiologist’s QK or QY. When no anesthesiologist directs the case, the CRNA bills QZ and receives the full allowance. That includes cases in states that require physician supervision of CRNAs, since the operating surgeon can supervise without it counting as medical direction.
States that have opted out of Medicare’s CRNA supervision requirement remove that condition for hospitals and ambulatory surgery centers, and CRNAs there routinely bill QZ.
The CRNA error we see most is a QX line on a case where the anesthesiologist’s documentation doesn’t support direction. Both providers’ lines then have to be recoded to match what the record supports, so direction documentation gets reviewed before the claim goes out rather than after a payer asks.
Monitored Anesthesia Care
MAC bills with the same anesthesia codes and formula, with QS added. Payers want the record to show why the case needed an anesthesia provider rather than nurse-administered moderate sedation, and that the provider was ready to convert to general anesthesia if needed. Many Medicare contractors also expect G8 for deep, complex, or markedly invasive procedures, or G9 for a patient with a history of severe cardiopulmonary disease, and some limit MAC for routine colonoscopy to patients with documented risk factors. The local coverage policy for each procedure decides which applies.
Many anesthesiologists also run interventional pain practices, which bill under a different model covered on our pain management page.
What Changed for Anesthesia in 2026
Medicare’s 2026 anesthesia conversion factor rose less than 1% for most clinicians, to about $20.50. The 2.5% efficiency adjustment that CMS applied to non-time-based services has less effect on anesthesia than on most specialties, because anesthesia payment is largely built on time. A separate change to practice expense lowered payments for many services furnished in facility settings, and CMS estimates the combined effect on anesthesia at about a 1% decline.
Teaching anesthesiologists also lost a pandemic-era flexibility. Virtual presence for supervising residents ended for practices in metropolitan areas after December 31, 2025, so teaching anesthesiologists there have to be physically present for the critical portions of resident cases to bill with GC.
Anesthesiology Credentialing
Anesthesiologists
Payers verify board certification through the American Board of Anesthesiology, along with medical education, residency, state licensure, DEA registration, malpractice history, and hospital privileges. Each credential is confirmed with the source that issued it, and a National Practitioner Data Bank query is part of every initial credentialing and recredentialing cycle.
CRNAs
CRNA credentialing verifies NBCRNA certification and its continued professional certification cycle, completion of a nurse anesthesia program, the state APRN or RN license, DEA registration where the state allows CRNA prescribing, and malpractice history. In states that require physician supervision or collaboration, payers also want documentation of that arrangement.
Hospital privileges and payer enrollment
Many payers won’t enroll an anesthesia provider for services at a facility until hospital privileges are active there. When privileging takes two or three months and payer enrollment waits for it to finish, a new provider’s wait to bill roughly doubles. Filing both at the same time closes most of that gap, because claims can’t go out under a provider who isn’t enrolled, as we explain in why you can’t bill what you can’t credential.
Medicare Enrollment for Anesthesia Groups
Anesthesia groups enroll in Medicare through PECOS, with the group holding its own enrollment and each anesthesiologist and CRNA reassigning benefits to it. CRNAs enroll under their own specialty, which matters when the group bills both QX and QZ lines.
Group and individual enrollments revalidate every five years. A missed revalidation deactivates billing privileges, and claims for that provider stop paying until the enrollment is restored.
Common Anesthesia Billing Errors
- Choosing the anesthesia code from the wrong crosswalk family, which changes the base units on every case it touches
- Billing time that doesn’t match the anesthesia record, or that overlaps across personally performed cases
- Billing QK or QY on a case where one of the seven direction steps isn’t documented
- Counting concurrency wrong, so a fifth overlapping case gets missed and every case in that window bills as directed instead of AD
- Sending qualifying circumstances codes to Medicare, or leaving them off commercial claims that pay for them
- Billing MAC without the G8 or G9 modifier a Medicare contractor’s coverage policy requires
Anesthesiology Billing FAQ
How does Medicare count anesthesia time units?
The claim reports anesthesia time in minutes, and the Medicare contractor divides the minutes by 15 and rounds to one decimal place. A 52-minute case counts as 3.5 time units.
What happens if one of the seven medical direction steps is missing?
Medicare treats the case as medical supervision instead of medical direction. The anesthesiologist’s line changes to AD and pays on three or four base units with no time, and the CRNA’s line has to be recoded to match what the record supports.
Does Medicare pay qualifying circumstances codes?
No. Medicare treats 99100, 99116, 99135, and 99140 as included in the base units. Many commercial payers pay them as added units, so each contract should be checked.
When does a CRNA bill with the QZ modifier?
Whenever no anesthesiologist medically directs the case. That applies in opt-out states and in supervision states where the operating surgeon supervises the CRNA.
Which modifiers does monitored anesthesia care need?
QS goes on every MAC line along with the provider modifier. Many Medicare contractors also expect G8 for deep, complex, or markedly invasive procedures, or G9 for a patient with a history of severe cardiopulmonary disease.
Does Medicare pay extra for ASA physical status modifiers?
No. Medicare doesn’t add units for P1 through P6, but some commercial payers add units for P3, P4, and P5, so the modifier should still go on the claim when the contract pays for it.
Anesthesia Revenue Cycle Support from Medwave
Most anesthesia underpayments trace back to a time entry, a modifier, or a concurrency count, and none of them show up as a denial. Medwave reconciles every case against the anesthesia record before it bills, assigns AA, QK, QY, QX, or QZ from the actual staffing, and adds physical status and qualifying circumstances units only where a payer pays them. Anesthesia claims go through the same review behind our medical billing team’s 98% clean claim rate.
Groups that staff CRNAs across several facilities need every provider enrolled with every payer and privileged at every site. Our medical credentialing team files privileging and payer enrollment together and averages 85 days to approval. Since the conversion factor drives nearly every anesthesia dollar, our payer contracting work starts with that rate on each commercial contract.
Picking up a new facility or adding CRNAs? Send us the details and we’ll map out the enrollments.