Sedation Physician Compensation Survey

Over the last decade the field of pediatric sedation has evolved into a specialty within a specialty. At some institutions this specialty is within anesthesiology and at others it is within a pediatric specialty (critical care, emergency medicine, or hospital medicine). While the provider type may vary between institutions (and even within institutions), the majority of sedation programs use anesthesia codes to bill for their professional fees. This raises the question… “Are providers being compensated based on the service that they provide (and bill) or based on the market rate for their respective board certification?” Earlier this year Dr. Shakari Narayan sent out a survey across the SPS listserv looking at physician compensation for sedation services.


MAC or Moderate Sedation?

This is a topic of some controversy in the sedation community.  On the one side is a group that maintains anesthesia codes (MAC) are exclusively to be used by board certified anesthesiologists providing anesthesia care.  On the other side, the group that maintains anesthesia codes are based on service provided, not provider board certification.  There are valid arguments on both sides of the aisle and this post is not an attempt to address this controversy.

One thing is certain though… if anyone wants to generate an income by providing sedation services to children, they cannot do so by billing moderate sedation codes.  The reimbursement for this service is so poor as to be almost laughable.  This is not to mention that the level of service provided when placing a patient on a propofol infusion is clearly not within the scope of “moderate sedation.”

CMS Guidelines?

Perhaps the best reference to address this issue is the most recent interpretive CMS guidelines on pediatric sedation. I feel like these guidelines clearly address this issue:

 Monitored anesthesia care (MAC):

anesthesia care that includes the monitoring of the patient by a practitioner who is qualified to administer anesthesia as defined by the regulations at §482.52(a). Indications for MAC depend on the nature of the procedure, the patient’s clinical condition, and/or the potential need to convert to a general or regional anesthetic. Deep sedation/analgesia is included in MAC.

General anesthesia, regional anesthesia and monitored anesthesia, including deep sedation/analgesia, may only be administered by:

  • A qualified anesthesiologist
  • An MD or DO (other than an anesthesiologist);
  • A dentist, oral surgeon or podiatrist who is qualified to administer anesthesia under State law;
  • A CRNA who is supervised by the operating practitioner or by an anesthesiologist who is immediately available if needed; or
  • An anesthesiologist’s assistant under the supervision of an anesthesiologist who is immediately available if needed.

Thus, the practice of different physicians specialities providing deep sedation, billing MAC, and collecting the appropriate reimbursement seems to be well supported.

Provider Compensation

Based on Board Certification

Physicians these days are becoming employees.  Many employers (hospitals) set market-based salaries which are loosely based on national or regional data, and may or may not be correlated with actual collections.  In this model there is a fairly consistent increase in salary as you compare general pediatricians/hospitalists to sub-specialist pediatricians and anesthesiologists.  A recent survey sent out to the SPS listserv confirms this trend of Board Certification based compensation for  sedation providers.

The problem

While it is easy to find salary ranges for all the various fields of medicine, the exclusive (or partial) practice of pediatric sedation is much more obscure.  Thus it reasons that most people just get paid what they would have otherwise been paid (based on board certification).  However, given that all providers are using the same billing codes and essentially generating the same collections, there are two potential problems:

  1. Higher compensated providers may be overcompensated based on revenue generation.
  2. Lower compensated providers may be under-compensated based on revenue generation.

The pediatric anesthesiologist

I have heard it argued (#1 above) that a sedation service is unable to generate enough revenue to support the market-rate based salary for a pediatric anesthesiologist.  However, Joe Cravero, at an SPA Presentation in 2010, was able to show that a well-designed anesthesiologist based sedation program could not only support itself but also generate a positive operating margin.

The pediatric sub-specialist

The market based rate for a pediatric sub-specialist is not markedly different from an anesthesiologist.  Given that most will split their time between sedation and their pediatric sub-specialty, there is probably very little “under compensation” by paying pediatric sub-specialists their market-based salary.

The pediatric hospitalist

This is where the potential gap in revenue generation versus provider compensation starts to widen.  The most recent data for general pediatrician compensation as of May 2011 is $198, 379.  However, general pediatricians that practice exclusively hospital medicine generally are compensated about 15% less than a general pediatrician in an office based practice.  So the gap between what a pediatric hospitalists might get paid ($160K) and the revenue generated (enough to support a pediatric anesthesiologists salary) can be quite substantial.

One Solution

Many hospital medicine physicians are actually subsidized by the hospital.  This is a consequence of volume based productivity.  It is just not possible to see enough patients in a hospital-based setting (15-20/day) to generate enough revenue to support a physician salary.  So a deep sedation service actually makes good financial sense for a pediatric hospital medicine practice.  It allows the practice to provide a service that generates revenue to offset some of the losses from providing inpatient care. 

While I have not run the numbers, I would expect that a combination of time on a sedation service and on a hospital medicine service would strike the right balance and make hospitalists a financial asset to an employer.  This model is being developed at our institution and I think it will likely become the model for this evolving pediatric sub-specialty in many other institutions as well.

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