Revenue Cycle

CMS instructs on payment methodology for anesthesiology claims submitted with a -GC modifier

Medicare Update for CAHs, May 16, 2012

On April 26, CMS issued transmittal R2452CP that implements the payment methodology for anesthesiology claims submitted with modifier –GC (resident /teaching physician service) for CAH Method II providers.

As it currently stands, teaching anesthesiologists rendering services in a Method II CAH have the option of reassigning their billing rights to the CAH, and when billing rights are reassigned, the Method II CAH submits an 85x bill type with revenue code 0963 (professional fees for anesthesiologist [MD]) for payment of the anesthesia, according to the transmittal.


CMS currently reduces payment by 20% of the fee schedule amount before deductible and coinsurance are calculated for anesthesia services performed by a teaching anesthesiologist and billed with a modifier –GC in a Method II CAH .. But this new payment methodology removes the 20% reduction that should not be applied in the payment calculation for these services. Teaching physicians report modifier –GC to indicate that they rendered the service in compliance with the teaching physician requirements in
§100.1.2 of the Medicare Claims Processing Manual. According to the transmittal, which cites §50 B. and §0 K, a payment modifier must be used in conjunction with the –GC modifier, and the teaching anesthesiologist should use  modifier –AA (Anesthesia services personally furnished by an anesthesiologist) and -GC certification modifier to report such cases.

Effective for services furnished on or after January 1, 2010, Medicare may provide payment under Section 13 of Medicare Improvement for Patients and Providers Act of 2008 (MIPPA) based on the regular fee schedule amount for the teaching anesthesiologist’s involvement in the training of residents in either single anesthesia cases or two concurrent anesthesia cases, according to MLN Matters MM7764 In order for the special payment rule for teaching anesthesiologists to apply, the teaching anesthesiologist (or different anesthesiologist in the same physician group) must be present during all critical portions of the anesthesia service.

Depending on the volume of cases that meet the –AA with –GC modifier criteria from January 1, 2010, through the present, the 20% reduction in the professional payment could be substantial, says Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc.

“CAHs should identify which claims were billed with a modifier –GC and resubmit them again with modifier –AA,” she says. “They should also identify other claims billed for the teaching anesthesiologist that did not include the –GC modifier to identify potential billing issues.”

Although this “fix” will not be implemented by Medicare contractors until October 1, 2012, CAHs are responsible to resubmit claims to their payers, Mackaman adds.. “In addition, the patient will end up paying more out of pocket as the deductible and coinsurance will be applied to 100% of the MPFS amount rather than the reduced 80% that was being calculated in error.”

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