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April 1997
Volume 61 |
Number 4
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PRACTICE MANAGEMENT
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| Anesthesiolgists'
Earnings and Productivity |
Karin Bierstein,
Practice Management Coordinator
When does a practice need to add another anesthesiologist? How
much will that additional anesthesiologist cost? Survey data from
the American Medical Association's Socioeconomic Monitoring System
(SMS), published annually in Physician Marketplace Statistics,
provide some guidance in answering these and related questions.
Table 1 indicates numbers of: 1)
patients personally anesthetized, 2) nurse anesthetist cases supervised
and 3) evaluation and management services provided for 1994, 1995
and 1996. For 1994 and 1995, the table also shows how many 15-minute
anesthesia time units were billed and how many hours were spent
in patient care activities; the AMA did not report these data
for 1996. Both the number of personally performed cases and the
total number of cases in which the responding anesthesiologists
participated increased over the three years, the latter figure
growing from 40.6 to 47 per week.
Table 2 gives 1993 and 1994 values
for the 15-minute anesthesia time unit, showing minimal change
over time and a relatively narrow range from the 25th to 75th
percentile. The absolute figures for mean, median and 75h percentile
annual net income (i.e., all earnings from medical practice before
taxes, including deferred compensation) all decreased from 1993
through 1995, but the 25th percentile appears to have dipped and
then risen back to its 1993 level.
How reliable are these data? The number of responses was in the
low 200 range. Although the SMS is structured and weighted so
as to maximize the reliability of the statistics, the sample size
is small and one should be careful in drawing conclusions, particularly
with respect to trends. One conservative way to approach the data
is through the use of confidence intervals. For a 95-percent confidence
interval (i.e., in order to predict that the true mean will fall
within a certain range 95 percent of the time), the bounds are
given by the mean estimate plus twice the standard error and the
mean estimate minus twice the standard error. Thus, we can say
that the average self-employed anesthesiologist's net income in
1995 was between $229,800 and $266,600 (mean = $248,200; standard
error = $9,200) with a probability of 95 percent.
Another way to evaluate the SMS data is to compare them to those
of the Medical Group Management Association's (MGMA's) Physician
Compensation and Production Survey. The MGMA survey sample is
not a stratified random sample, and it is limited to practices
that are members of the association. The latest data come from
1,448 practices, a 22-percent response rate. Hence, this survey
is perhaps less representative than the AMA sample, although the
absolute numbers of anesthesiologists responding are greater.
According to the MGMA survey, the mean annual compensation (i.e.,
all direct compensation, excluding retirement plans and fringe
benefits paid for by the employer) for anesthesiologists in 1995
was $261,282, with a standard deviation of $102,329. The 25th
percentile, median and 75th percentiles were $201,000, $240,666
and $298,450, respectively. These numbers are significantly higher
than those produced by the AMA's socioeconomic survey, and are
even less easy to interpret given that they appear to be based
on an annual average number of cases performed per anesthesiologist
of approximately 1,100. This figure presumably covers only cases
personally performed, since medical direction of nurse anesthetists
is not addressed in the survey instrument. If one annualizes the
most recent AMA personally performed data, however, and assumes
45 weeks worked, the corresponding number would be 1,530 (45 x
34).
Their limitations notwithstanding, both the AMA and the MGMA
survey systems and reports are valuable benchmarking tools. The
data noted above and in the two tables are a very small sample
of the information available. The AMA's Physician Marketplace
Statistics contains nearly 180 pages of data on hours worked,
fees, compensation, professional expenses and payer mix.
For further information about the SMS, contact the AMA at (800)
621-8335. The MGMA's "Physician Compensation and Production
Survey: 1996 Report Based on 1995 Data" consists of approximately
100 pages of data for both physicians and "mid-level providers"
broken down by specialty, practice size, payer mix and geographic
region. It is available from the MGMA Order Department at (303)
397-7888.
Fraud and Abuse Lectures Raise Red Flags
Medicare fraud and abuse issues have attained new heights of
interest among anesthesiologists over the last several years.
Two of the more exciting presentations at ASA's third annual Conference
on Practice Management held in Orlando, Florida, on February 21-23,
addressed fraud and abuse.
Alice Gosfield, a former president of the National Health Lawyers'
Association and one of the pre-eminent health law attorneys in
the country, spoke for two hours. She reminded the audience that
Attorney General Janet Reno had made health care fraud her number-two
enforcement priority right after drug abuse. The Health and Human
Services Inspector General's 1997 work plan specifically targeted
anesthesia.
Last year's enactment of the federal Health Insurance and Portability
Act established a well-funded program coordinating fraud and abuse
prosecution across the government and in the private sector and
increased the incentives for private citizens (e.g., disgruntled
employees, former spouses) to instigate investigations.
One of the key principles for keeping anesthesiologists out of
trouble, according to Ms. Gosfield, is documentation: from the
government's perspective, if something is not documented in the
medical record, it did not happen. Thus, the anesthesiologist's
presence in the operating room must be formally noted. Compliance
with the Medicare medical direction requirements (performing the
preanesthesia examination, prescribing the anesthesia plan, personally
participating in induction and emergence, ensuring participation
of a qualified anesthetist in procedures not personally performed,
remaining available for emergencies and providing postanesthesia
care) must be documented.
Ms. Gosfield recommended that each practice develop its own compliance
plan. David Queen, a former U.S. Attorney and now a partner in
a Baltimore law firm with a national health law practice, elaborated
on compliance plans. These can be a double-edged sword, so anesthesiologists
should only adopt them if they intend to comply fully with them.
The advantages of having a compliance plan are: 1) it may prevent
fraudulent activity in the first place; and 2) its existence will
probably result in a large reduction in the penalty that may be
levied even if the plan does not produce impeccable billing.
If an anesthesia practice uncovers Medicare billing errors that
have produced overpayments, it should not seek to discuss the
problem with the carrier. Carriers are required to report apparent
fraud to the Health Care Financing Administration, which in turn
must alert the health care task force in the U.S. Attorney's office.
Instead, if a small dollar amount is involved, the anesthesiologist
is advised to send the carrier a refund check without any explanation
attached. Normally, the carrier will simply deposit the check.
If the amount is large, however, the practice should hire competent
counsel to work out a settlement.
In addition to learning a great deal about fraud and abuse, conference
participants heard presentations on cost accounting and financial
reporting, group dynamics and negotiation strategies, managed
care contracts and package pricing techniques, practice mergers
and antitrust, and Medicare.
Planning is now under way for 1998. If you come across a first-rate
speaker whom you might want to hear at a future ASA practice management
conference, please let us know.
Monographs Available
For each of the 13 lectures presented at the ASA Conference on
Practice Management, the speakers prepared a monograph of 10 to
30 pages. The monographs were bound into a single volume, which
was given to conference registrants; additional copies are available
for $40 from the ASA Publications Department, 520 N. Northwest
Highway, Park Ridge, IL 60068-2573; telephone (847) 825-5586
Those attending the conference also received a booklet containing
reprints of all "Washington Reports" and "Practice
Management" columns from the 1995 and 1996 ASA NEWSLETTERs.
Copies of this booklet may be purchased from the ASA Executive
Office for $25; e-mail <publications@ASAhq.org>.
Anesthesia Administrators Plan Annual Meeting
The Anesthesia Administration Assembly of the Medical Group Management
Association (MGMA) will hold its 15th annual conference in Boston,
Massachusetts, on May 18-20, 1997. This meeting will present anesthesiologists
and administrators with a second opportunity to hear health law
attorney Alice Gosfield speak on fraud and abuse. Other topics
on the program include the Medicare teaching regulations, billing
and coding, retirement plan investing, prospective payment systems
based on case-mix, job descriptions and salary grades for physicians,
nurse anesthetists and office staff, and hospital relations and
contracts.
For further information and to register for this conference,
contact the MGMA at (303) 799-1111.
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