(1) The medicaid agency reimburses anesthesia services on the basis of base anesthesia units (BAU) plus time.

(2) The agency calculates payment for anesthesia by adding the BAU to the time units and multiplying that sum by the conversion factor. The formula used in the calculation is: (BAU × 15) + time) × (conversion factor divided by 15) = reimbursement.

(3) The agency obtains new BAU values from the most current Centers for Medicare and Medicaid Services (CMS) anesthesia base unit file and reviews them annually for updates.

(4) The agency determines a budget neutral anesthesia conversion factor by:

(a) Determining the BAUs, time units, and expenditures for a base period for the provided procedure. Then,

(b) Adding the latest BAU to the time units for the base period to obtain an estimate of the new time unit for the procedure. Then,

(c) Multiplying the time units obtained in (b) of this subsection for the new period by a conversion factor to obtain estimated expenditures. Then,

(d) Comparing the expenditures obtained in (c) of this subsection with base period expenditure levels obtained in (a) of this subsection. Then,

(e) Adjusting the dollar amount for the anesthesia conversion factor and the projected time units at the new BAUs equals the allocated amount determined in (a) of this subsection.

(5) The agency calculates anesthesia time units as follows:

(a) One minute equals one unit.

(b) The total time is calculated to the next whole minute.

(c) Anesthesia time begins when the qualified anesthesia provider begins physically preparing the client for the induction of anesthesia; this must take place in the operating room or its equivalent. When there is a break in continuous anesthesia care, blocks of time may be added together as long as there is continuous monitoring. Examples of this include, but are not limited to, the following:

(i) The time a client spends in an anesthesia induction room; or

(ii) The time a client spends under the care of an operating room nurse during a surgical procedure.

(d) Anesthesia time ends when the qualified anesthesia provider is no longer in constant attendance (i.e., when the client can be safely placed under post-operative supervision).

(6) When more than one surgical procedure is performed at the same operative session, the agency uses the BAU of the major procedure to determine anesthesia allowed charges.

(7) The agency reimburses for add-on procedures as defined by CPT only for the time spent on the add-on procedure that is in addition to the time spent on the major procedure.

(8) The agency does not reimburse the attending surgeon for anesthesia services.

(9) When more than one anesthesia provider is present on a case, the agency reimburses as follows:

(a) The medical directing anesthesiologist receives 50 percent of the allowed amount;

(b) The CRNA or CAA under medical direction receives 50 percent of the allowed amount; and

(c) For anesthesia provided by a team, the agency limits reimbursement to 100 percent of the total allowed reimbursement for the service.

(10) The agency considers an anesthesiologist who supervises a resident anesthesiologist to be a teaching anesthesiologist and reimburses as follows:

(a) When supervising one resident only, the teaching anesthesiologist receives 100 percent of the allowed amount.

(b) When supervising two or more residents concurrently, the teaching anesthesiologist receives 50 percent of the allowed amount for each case supervised.

(11) The agency changes anesthesia conversion factors if the legislature grants a vendor rate increase, or other increase, and if the effective date of that increase is not the same as the agency's annual update.

(12) If the legislatively authorized vendor rate increase or other increase becomes effective at the same time as the agency's annual update, the agency applies the increase after calculating the budget-neutral conversion factor.