"Billing Irregularities by Health Care Providers: Evidence from Anesthesia"
Please note: All research in progress seminars are off-the-record unless otherwise noted. Any information about methodology and/or results are embargoed until publication.
In the United States, physicians exercise tremendous discretion in choosing billing details that determine payment for their services. While understanding the degree to which physicians inappropriately use this discretion has implications for setting payment policies, separating inappropriate discretion from actual differences in patient complexity is empirically challenging. In anesthesia, providers are compensated by self-reported length of time (“anesthesia time”) spent on a case. Therefore, anomalous patterns in a practitioner’s reported times—e.g., an excess number of cases with an anesthesia time ending in five (e.g., 65 minutes)—can objectively identify inappropriate billing when those reported times are also longer than expected. Using a national database of over 6.5 million anesthesia cases from 5,755 anesthesia providers, we found that anomalous patterns are common—nearly one-quarter of providers report an unusually large number of cases with anesthesia times ending in 5 or zero. Providers who were particularly anomalous—those in the top 5th percentile in terms of anesthesia times ending in 5 or zero—also tended to report anesthesia times that were 22 minutes longer than expected, which would net an additional $34 to $98 per case, depending on payer. While inappropriate practices seem confined to a minority of anesthesia providers, our results provide some impetus for ongoing policy efforts aimed at reducing the amount of discretion given to physicians.