CurrentAlliance Health (LME-MCO)Policy 1L-1

Anesthesia Services

Medicaid clinical coverage policy defining coverage, exclusions, prior approval, billing and provider requirements for anesthesia services (general, regional, MAC, pain management, local, and related qualifiers) for NC Medicaid beneficiaries. This is part 1 of 2 and includes definitions, general coverage criteria, time factors, global package inclusions/exclusions, qualifying circumstances, provider eligibility, documentation, and claims-related billing instructions (Attachment A partial).

Policy Summary

PayerAlliance Health (LME-MCO)

PolicyAnesthesia Services

Policy CodePolicy 1L-1

Change TypeClarified supervision & modifier language; template/administrative updates

Effective DateOct 1, 2003

Next Review DateN/A

Key ActionWhen a surgical procedure requires prior approval, the surgeon must obtain it and submit the request plus supporting health records to the DHHS Utilization Review Contractor.

SourceLink

POLICY UPDATE CHANGES

08/15/2023: Section 6.1 changed 'two' to 'four' anesthesia assistants at one time; Attachment A Section D Modifiers updated to reflect 'four'.

04/15/2023: Updated policy template language due to North Carolina Health Choice Program's move to Medicaid; policy posted 4/15/2023 with effective date 4/1/2023.

03/14/2022: Removed Attachment B: Billing Guidelines for Anesthesia Services with and without Medical Direction; amended date not changed.

1/1/2022: Attachment D revised (removed 'Refer to Attachment D for more information').

Amended Date: August 15, 2023 appears on multiple sections indicating editorial/amendments to billing guidance.

9Major policy sections

Coverage Summary & General Criteria

General Covered Criteria

This policy addresses anesthesia services for Alliance Health (LME‑MCO) Medicaid beneficiaries. It provides coverage and billing guidance for types of anesthesia services (general anesthesia, monitored anesthesia care, local/regional anesthesia, and pain management procedures) and defines the global anesthesia package and items included or billed separately. This is part 1 of 2 of the anesthesia policy content, summarizing coverage criteria, global package rules, exclusions, and operational requirements.

Medicaid shall cover anesthesia services when medically necessary and ALL of the following are met:

1) The anesthesia service is performed by a provider eligible to bill per this policy and meets state licensing and certification requirements.

2) Documentation in the medical record supports the medical necessity for anesthesia (pre‑anesthesia evaluation, informed consent, intraoperative anesthesia record, post‑anesthesia care documentation, and procedure details).

3) The type and level of anesthesia provided (general, monitored anesthesia care, regional/local, or pain management) are appropriate for the patient’s condition, age, and the complexity of the procedure.

4) Prior approval is obtained when required by the Prior Approval Requirements outlined in this policy.

5) Billing follows the Medical Direction Billing Criteria and claim form rules (including correct use of modifiers, units, and rendering/provider identifiers).

6) When medical direction is reported, documentation meets the Medical Direction Documentation Requirements and the Medical Direction Concurrent Cases Clarification (i.e., the allowed simultaneous activities and limits on number of concurrent cases are observed).

Global Anesthesia Package Inclusion

The global anesthesia package includes the usual components of anesthesia care and related services; these items are considered included in the global anesthesia service unless an item is unrelated to the anesthesia and is billed separately with appropriate modifier and documentation.

The following items are included in the global anesthesia package unless separately identified as unrelated and billed with modifier 59 or another appropriate modifier:

1) Preoperative assessment and evaluation related to the anesthesia service.

2) Intraoperative management and monitoring directly related to the provision of anesthesia.

3) Post‑anesthesia care in the immediate recovery period (PACU) related to the anesthetic.

4) Routine noninvasive monitoring and airway management associated with the anesthetic.

Services Not Included in Global Package (billed separately)

The following items are not considered part of the anesthesia global package and may be billed separately (ANY of the following):

Any evaluation and management service unrelated to the anesthesia (billed with appropriate E/M code and modifier when allowed).

Diagnostic procedures or therapeutic procedures that are not part of the anesthetic care and are performed separately.

Services or procedures that satisfy payer rules for separate billing with proper modifier and documentation to demonstrate they are distinct and unrelated to the anesthesia.

Implantable devices or supplies billed outside the anesthesia service when permitted by policy and coding guidelines.

Not Covered General Criteria

Medicaid shall NOT cover anesthesia services when ANY of the following apply:

Any service that is not medically necessary for the diagnosis or treatment of the patient’s condition.

Anesthesia services that are not performed by an eligible provider or that do not meet provider qualification and licensing requirements.

Services lacking required documentation (see Medical Record Documentation Requirements) to substantiate medical necessity, scope, or timing of the anesthesia care.

Failure to obtain required prior approval when the service falls under Prior Approval Requirements.

Billing that does not comply with Medical Direction Billing Criteria, claim form rules, or that inappropriately reports concurrent cases beyond permitted limits.

Specific Not Covered Items

Specific items and situations that are excluded from coverage or require referral to other policies:

Patient‑controlled analgesia/anesthesia (PCA) when billed as an anesthesia service is not covered under this anesthesia policy; see applicable pain management or pharmacy coverage rules.

Intravenous sedation and moderate (conscious) sedation are not covered under this anesthesia policy; refer to policy 1L‑2 Moderate (Conscious) Sedation for coverage, billing, and documentation requirements.

Any other explicitly excluded items listed elsewhere in this document or in related Medicaid policies (claim lines denied if billed inconsistently with exclusions).

Medical Necessity, Time Rules, and Special Coverage Conditions

Time-based Anesthesia Billing Requirement

Time-based anesthesia services require ALL of the following:

Time-based Billing Requirements

Continuous presence: continuous actual physical presence with the patient by anesthesiologist, resident, CRNA, or anesthesiologist assistant during the billed time
Start/End: time starts when provider begins to prepare the patient for anesthesia care in OR or equivalent area and ends when provider is no longer in personal attendance
Constant attendance: the anesthesiologist, resident, CRNA, or anesthesiologist assistant must be in constant attendance of the patient during the time billed

Billing, Modifiers, Claim Submission & Documentation Requirements

Modifier requirements and billing scenarios

Providers must append modifiers as described depending on provider type, supervision/medical direction, and service type:

Modifier requirements summary

Required modifiers: One of the following modifiers must be appended to the anesthesia CPT code each time anesthesia is billed: AA, QY, QK, AD, QZ, QX
Modifier meanings
- AA = Anesthesia services performed personally by anesthesiologist.
- QY = Medical direction of 1 CRNA/anesthesiologist assistant by an anesthesiologist.

Code Lists & Modifiers

Dental sedation codes referencedmixed

D9220	Conscious sedation, intraoral (dental sedation code referenced)
D9221	Deep sedation/general anesthesia – intraoral (dental sedation code referenced)

Qualifying CPT codes for 99140 (listed associations)CPT

00210	Anesthesia code listed as qualifying for 99140 association
00212	Anesthesia code listed as qualifying for 99140 association
00214	Anesthesia code listed as qualifying for 99140 association
00215	Anesthesia code listed as qualifying for 99140 association
00400	Anesthesia code listed as qualifying for 99140 (marked with *)
00540	Anesthesia code listed as qualifying for 99140 association
00541	Anesthesia code listed as qualifying for 99140 association
00560	Anesthesia code listed as qualifying for 99140 association
00562	Anesthesia code listed as qualifying for 99140 association
00563	Anesthesia code listed as qualifying for 99140 association

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Qualifying CPT codes for 99116 or 99135 (listed associations)CPT

99116	Qualifying/association code (listed with related anesthesia CPTs)
99135	Related qualifying code (listed associations)
00210	Anesthesia code listed as qualifying for 99116/99135 association
00215	Anesthesia code listed as qualifying for 99116/99135 association
00540	Anesthesia code listed as qualifying for 99116/99135 association
00541	Anesthesia code listed as qualifying for 99116/99135 association
00560	Anesthesia code listed as qualifying for 99116/99135 association
00562	Anesthesia code listed as qualifying for 99116/99135 association
00563	Anesthesia code listed as qualifying for 99116/99135 association
00770	Anesthesia code listed as qualifying for 99116/99135 association

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Anesthesia CPT and related procedure codes referencedCPT

99140	Qualifying procedure code referenced in Attachment A mapping
99116	Qualifying procedure code referenced in Attachment A mapping
00210	Anesthesia CPT referenced in qualifying lists
00212	Anesthesia CPT referenced in qualifying lists
00214	Anesthesia CPT referenced in qualifying lists
00215	Anesthesia CPT referenced in qualifying lists
00400	Anesthesia CPT referenced (marked with *)
00540	Anesthesia CPT referenced in qualifying lists
00541	Anesthesia CPT referenced in qualifying lists
00560	Anesthesia CPT referenced in qualifying lists

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ModifiersModifierCovered

AA	Anesthesia services performed personally by anesthesiologist
QY	Medical direction of 1 CRNA/Anesthesiologist Assistant by an anesthesiologist
QK	Medical direction of 2, 3, or 4 concurrent anesthesia procedures involving qualified individuals
AD	Medical supervision by a physician: more than 4 concurrent anesthesia procedures
QZ	CRNA service without medical direction by a physician
QX	CRNA service with medical direction by a physician
QS	Monitored Anesthesia Care (MAC) modifier (used in addition to provider modifier)
59	Distinct procedural service (used to indicate unrelated service)
FP	Modifier to append for sterilization procedures (per Attachment A guidance)

Billing transaction typesmixed

CMS-1500/837P	Professional claim transaction (CMS-1500/837P)
UB-04/837I	Institutional claim transaction (UB-04/837I)
ADA/837D	Dental claim transaction (ADA/837D)

Revenue codesRevenue

37X	Facility revenue codes for anesthesia on UB-04 (use 37X range)

Code groups listed in the policy (CPT/ADA mappings and qualifying lists) are presented as neutral/reference material; payment and billing consequences depend on the provider role and appended modifiers. The policy requires appending one of the anesthesia modifiers (for example AA, QY, QK, AD, QZ, QX, QS) and describes how payment is calculated: reimbursement = (base units + time units) × conversion factor, with variant formulas depending on modifier/provider type (physician, medically directed CRNA, CRNA without direction, anesthesiologist assistant at 50% of physician rate, etc.).

Dental & Sterilization Billing Specifics

Dental anesthesia billing

Specifics for dental setting and dental sedation code equivalence:

Dental anesthesia billing rules

Billing CPT codes for dental anesthesia: Physicians and CRNAs administering anesthesia for dental procedures bill anesthesia CPT procedure codes; anesthesia time entered as '1 minute = 1 unit' in block 24G of CMS-1500
ASC or hospital use CMS-1500: Anesthesiologists and CRNAs billing for services in an ASC or hospital use CMS-1500 claim form
Dental office dentist billing: If analgesia/anesthesia rendered in dental office, dentist bills using appropriate ADA procedure codes

Definitions

Definitions used in the policy: General anesthesia — a controlled, reversible state of unconsciousness with loss of protective reflexes, amnesia and analgesia, requiring continuous presence of an anesthesia provider. Regional anesthesia — loss of sensation or motor function to a region via neuraxial or peripheral techniques, requiring continuous presence of an anesthesia provider. Monitored Anesthesia Care (MAC) — intraoperative monitoring in anticipation of need for general anesthesia or adverse reaction; requires continuous presence of an anesthesia provider (MAC also requires the QS modifier plus the provider-specific modifier). Global anesthesia package — includes usual pre/postoperative visits, anesthesia during the procedure, IV fluids including blood, intra-operative labs, and routine monitoring and interpretation; items explicitly not included (and billable separately with modifier 59) include pulmonary artery, central venous, and intra-arterial catheter insertion, nerve blocks for postoperative pain relief, ultrasound-guided access, and TEE. Cutback pricing — reduction of billed units or conversion to a flat fee when certain procedures (for example sterilization billed with delivery) are combined.

Key Thresholds & Limits

Key Thresholds and Limits

Concurrent Anesthesiologist Supervision LimitAn anesthesiologist may concurrently direct administration of anesthesia to not more than four surgical patients (supervise up to four anesthesiologist assistants or CRNAs)

Extreme Age QualifierQualifying circumstance reported for beneficiaries under 1 year and over 70 years of age

Obstetric anesthesia daily maximum unitsMaximum unit limitation for obstetric anesthesia procedures billed with time is 180 units (minutes) per date of service; units billed exceeding 180 will be cut back unless supported by medical records

01967 flat unit ruleAnesthesia code 01967 (neuraxial labor analgesia/anesthesia for planned vaginal delivery) is a flat-rate code: time units not recognized and allowed as 1 unit per occurrence

01996 daily allowanceOnly one 01996 (daily hospital management of epidural or subarachnoid continuous drug administration) is allowed per day and includes all related services performed that day; may be billed by all physician specialties and does not require anesthesia modifiers

Policy Revision Timeline

2003-10-01original_effective

Original effective date of the policy established.

03/14/2022attachment_removed

Removed Attachment B: Billing Guidelines for Anesthesia Services with and without Medical Direction; amended date not changed.

01/01/2022editorial_revision

Attachment D revised to remove the phrase 'Refer to Attachment D for more information'.

Policy Summary

PayerAlliance Health (LME-MCO)

PolicyAnesthesia Services

Policy CodePolicy 1L-1

Change TypeClarified supervision & modifier language; template/administrative updates

Effective DateOct 1, 2003

Next Review DateN/A

Key ActionWhen a surgical procedure requires prior approval, the surgeon must obtain it and submit the request plus supporting health records to the DHHS Utilization Review Contractor.

SourceLink

On This Page

Epidural follow-up limitation: only one follow-up code for daily hospital management of continuous epidural or subarachnoid drug administration is covered per day

includes visit, removal/adjustment of catheter, dose calculation, and administration of the drug

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Multiple Procedures Same Date of Service

Reimbursement determination when multiple surgical procedures occur on same date:

Multiple procedures same day

Highest base unit: reimbursement based on base unit of procedure with highest base unit value
Time units: time units based on actual anesthesia time for the multiple procedures
Records on request: medical records need not be submitted routinely but must be provided upon request

Labor/Delivery and Sterilization Combination Rules

Coverage when combining labor/delivery/sterilization:

Labor/delivery and sterilization rules

Combination covered: combinations of labor, delivery, or sterilization under general or epidural anesthesia are covered for same patient encounter; sterilization will have cutback pricing applied and both services allowed
Returned to OR sterilization: if beneficiary returned to OR after labor/delivery/cesarean to perform sterilization, report anesthesia CPT 00851 as separate procedure and include total time units
applies to sterilizations under general, regional, or MAC

Qualifying Circumstances Reporting

Qualifying circumstance codes are reported in addition to primary procedure when applicable:

Qualifying circumstances list

Extreme age: extreme age: beneficiaries under 1 year and over 70 years of age
Total body hypothermia: total body hypothermia when due to type of surgery (e.g., open heart, brain surgery)
Controlled hypotension: controlled hypotension when due to type of surgery (e.g., open heart, brain surgery)
Emergency conditions: emergency conditions if delay may lead to significant increase in threat to life or body part

Evaluation and Management with Anesthesia

E/M and critical care billing rules in relation to anesthesia:

E/M with anesthesia

Global package includes routine care: global anesthesia package includes routine preop, intraop, immediate postop and postoperative visit if applicable
Critical care E/M: critical care E/M and respiratory care-ventilator management E/M codes are covered if extended care required beyond immediate postoperative period and billed separately with modifier 25 appended
Termination of surgery E/M: if surgery terminated after preanesthesia evaluation, physician may bill E/M if criteria met and documentation supports level
If induction begins: if induction of anesthesia begins, reimbursement based on CPT procedure base units plus actual time

Anesthesia Consultations

Consultation requirements:

Consultation requirements

Request and documented need: attending physician or appropriate source must request consultations and need must be documented
Document consultant opinion: consultant's opinion and any services ordered must be documented and communicated by written report to requesting physician
Routine pre-op not consultation: routine preoperative visits are not consultations; Medicaid follows CPT E/M definitions

Provider Eligibility to Bill

To be eligible to bill providers must meet ALL of the following:

Provider eligibility

Medicaid qualifications: meet Medicaid qualifications for participation
Participation agreement: have a current and signed DHHS Provider Administrative Participation Agreement
Scope of practice: bill only for procedures within scope of clinical practice as defined by licensing entity

Provider Supervision Limits

Supervision limits and references:

Supervision limits

AA direction requirement: anesthesiologist assistant must work under direction of an anesthesiologist (42 CFR §410.69)
Supervisor limit: anesthesiologist may supervise no more than four anesthesiologist assistants at one time (§90-18.5)<= 4
Regulatory refs: CRNA qualifications refer to 21 NCAC 36.0226; anesthesiologist assistant qualifications refer to 21 NCAC 32W .0101

Billing and claim submission depend on the provider's employment relationship and setting: use CMS-1500/837P for professional claims, UB-04/837I for institutional claims, and ADA/837D for dental. Hospitals bill CRNA or anesthesiologist assistant professional charges on CMS-1500 with the hospital's billing provider number in block 33 and facility charges on UB-04 with RC in the 37X range; when employed by an anesthesiologist, assistants and CRNAs are billed on separate CMS-1500 claims per the policy. See the dental-specific section: physicians/CRNAs use anesthesia CPT codes and report anesthesia time as 1 minute = 1 unit on CMS-1500; dentists billing anesthesia in the dental office must use ADA procedure codes (policy cross-reference to Dental Services).

Prior Authorization

Surgeon obtains prior approval when required

When a surgical procedure requires prior approval, the surgeon is responsible for obtaining the prior approval and submitting the prior approval request plus all supporting health records to the DHHS Utilization Review Contractor to demonstrate that the criteria in Subsection 3.2 are met.

Documentation Required

Medical record documentation requirements

Medical records must support medical necessity and coding. Documentation must include the pre-anesthetic examination and evaluation, the beginning and end times of anesthesia, monitoring of the beneficiary's vital signs, any postoperative anesthesia notes, support for codes reported on the claim, and an indication of medical direction.

Billing Rule

Global package and modifier 59 usage

General, regional, and MAC anesthesia are a global package that includes usual pre/post visits, intraoperative anesthesia, IV fluids, intra-operative labs, and routine monitoring. Services that are unrelated to the administration of anesthesia must be billed separately with modifier 59 to indicate an unrelated service; documentation must support use of modifier 59.

Billing Rule

Epidural catheter follow-up per day

Only one follow-up code for daily hospital management of continuous epidural or subarachnoid drug administration (e.g., 01996) is covered per day; that code includes all related services performed that day (visit, removal/adjustment of catheter, dose calculation, drug administration).

Billing Rule

Multiple procedures same day calculation

When multiple surgical procedures occur on the same date, reimbursement is determined using the base units of the procedure with the highest base unit value; time units are based on the actual anesthesia time for the multiple procedures. Medical records need not be routinely submitted but must be provided upon request.

Documentation Required

Consultation documentation

Consultations must be requested by the attending physician or other appropriate source, with the need documented in the medical record. The consultant's opinion and any services ordered or performed must be documented and communicated by written report to the requesting provider. Routine preoperative visits are not consultations.

Billing Rule

Claim types and billing guides

Providers must submit claims using the appropriate claim transaction: professional (CMS-1500/837P), institutional (UB-04/837I), or dental (ADA/837D). Follow the NCTracks Provider Claims and Billing Assistance Guide, National Uniform Billing Guidelines for institutional claims, and current CPT/HCPCS/UB-04 specifications.

Billing Rule

Append appropriate anesthesia modifier

One of the following modifiers must be appended to the anesthesia CPT code each time anesthesia is billed, depending on provider role and supervision: AA, QY, QK, AD, QZ, QX (and QS for MAC in combination with provider-specific modifier). Use modifier 59 for unrelated procedures when documented. Failure to append the correct modifier may affect payment.

Billing Rule

Use modifier 59 for unrelated procedures

Use modifier 59 to report a procedure that is unrelated to the administration of anesthesia and should be considered for separate reimbursement (for example invasive monitoring, TEE monitoring, postoperative pain blocks); documentation must support the use of modifier 59.

Billing Rule

Sterilization billing requires diagnosis and modifier

When billing anesthesia for sterilization procedures, include ICD-10-CM diagnosis code Z30.2 and append modifier FP to the CPT anesthesia code. Sterilization billed with delivery is subject to cutback pricing; CPT codes that may be used include 00840, 00851, and 00921.

Billing Rule

CRNA employed by hospital - billing rules

When a CRNA is employed by a hospital or facility, the CRNA professional charges are billed on the hospital's professional claim (CMS-1500) with modifier QX appended; facility charges are billed on the UB-04 with revenue codes in the 37X range and must not include CRNA professional charges in the revenue code.

Sterilization and labor/delivery billing combinations

Rules and cutback pricing when sterilization billed with delivery:

Sterilization billing requirements

Z30.2 and FP modifier: CPT anesthesia codes for sterilization must be billed with ICD-10-CM diagnosis code Z30.2 and modifier FP appended to the CPT code
Sterilization CPTs: CPT anesthesia codes that may be used for sterilization: 00840, 00851, 00921
Cutback pricing: Anesthesia reimbursement for sterilization is cut back to a flat fee when billed in conjunction with labor and delivery
Sterilization with delivery allowed: When sterilization is billed in addition to a delivery (01960, 01961, 01968), sterilization will have cutback pricing applied and both services will be allowed
Obstetric add-on window: Obstetric add-on codes 01968 and 01969 may be billed by same or different provider when billed within 48 hours of primary procedure code 01967