The short answer: every Medicare anesthesia claim carries a pricing modifier that says who gave the anesthetic and how many cases the anesthesiologist was covering at the time. That modifier decides whether the claim pays in full, pays half, or pays a capped amount. AA (personally performed) and QZ (CRNA without medical direction) pay 100%. QK and QY (medical direction) pay the anesthesiologist 50%, and the CRNA bills QX for the other 50%. AD (medical supervision of more than four cases) pays the anesthesiologist only three base units. A second set of modifiers, including QS, G8, G9 and GC, gives information but does not change payment.
Getting these right is the difference between a compliant claim and a recoupment. This page sets out what each modifier means under Medicare, what it pays, and where claims most often go wrong.
How Medicare pays for anesthesia
Medicare pays an anesthesia service as (base units + time units) × the anesthesia conversion factor, adjusted for locality. Base units come from the procedure code. A time unit is 15 minutes, and partial units count as fractions rounded to one decimal place. Medicare does not add units for the patient’s physical status, age, risk or unusual circumstances, so the physical status modifiers P1–P6 are not used on Medicare claims, although many commercial payers do pay extra units for them.
The national anesthesia conversion factor for 2026 is $20.4976, or $20.5998 for clinicians who qualify through an Advanced Alternative Payment Model. CMS has proposed $20.2143 and $20.4165 for 2027 (details).
Payment modifiers
| Modifier | Meaning | Billed by | Medicare pays |
|---|---|---|---|
| AA | Anesthesia personally performed by an anesthesiologist | Anesthesiologist | 100% |
| QK | Medical direction of two, three or four concurrent procedures | Anesthesiologist | 50% |
| QY | Medical direction of one CRNA | Anesthesiologist | 50% |
| QX | CRNA or anesthesiologist assistant service with medical direction by a physician | CRNA or AA | 50% |
| QZ | CRNA service without medical direction by a physician | CRNA | 100% |
| AD | Medical supervision of more than four concurrent procedures | Anesthesiologist | 3 base units, plus 1 time unit if present at induction |
A few rules sit behind the table:
- Concurrency counts every patient. The two-to-four limit for QK includes patients covered by other payers, not just Medicare patients.
- QZ is for CRNAs only. An anesthesiologist assistant must always be medically directed and bills QX.
- AA and QZ on the same case are both paid in full only when both clinicians were medically necessary and both document their involvement.
- The CRNA under AD still bills QX and receives 50%. Only the anesthesiologist’s side is capped.
What that means in dollars
Take a case with 5 base units and 60 minutes of anesthesia time: 9 units in all. At the 2026 national conversion factor, before locality adjustment:
| How the case was covered | Anesthesiologist | CRNA | Total |
|---|---|---|---|
| Personally performed (AA) | $184.48 | none | $184.48 |
| CRNA alone, no medical direction (QZ) | none | $184.48 | $184.48 |
| Medical direction (QK or QY with QX) | $92.24 | $92.24 | $184.48 |
| Medical supervision (AD with QX) | $81.99 at most | $92.24 | $174.23 |
Medical direction does not cost Medicare more than one clinician working alone; it splits the same fee. Supervision pays the anesthesiologist a fixed four units at most, however long the case runs. That is why a care team that slips from direction into supervision loses money on every long case.
To run your own schedule and payer mix through the same arithmetic, use the anesthesia subsidy calculator.
Informational modifiers
These go in the second modifier position, after a payment modifier. They describe the service but do not change what Medicare pays.
| Modifier | Meaning |
|---|---|
| QS | Monitored anesthesia care (MAC). MAC is paid like other anesthesia, on actual time, and still needs a payment modifier. |
| G8 | MAC for a deep, complex, complicated or markedly invasive surgical procedure |
| G9 | MAC for a patient with a history of a severe cardiopulmonary condition |
| GC | Service performed in part by a resident under the direction of a teaching physician |
Teaching anesthesiologists
Since 2010 a teaching anesthesiologist can be paid in full, billing AA with GC, for one resident case, for two concurrent resident cases, or for one resident case running alongside one medically directed CRNA case. Two conditions apply: the teaching anesthesiologist, or another in the same group, must be present for all critical or key portions of each case, and an anesthesiologist must be immediately available throughout. The record has to show both. Some contractor web pages still describe the pre-2010 rule, which paid these cases at the medically directed rate; the current regulation (42 CFR 414.46(e)) governs.
QZ and the commercial 85% rule
Medicare pays a CRNA working without medical direction the same fee an anesthesiologist would receive. Several commercial payers no longer do: Cigna, Anthem in some states and UnitedHealthcare now pay QZ claims at 85%. That makes the choice between QZ and medically directed coverage a revenue question as well as a staffing one (how the 85% rule works).
Where claims go wrong
- Billing QK when a medical direction condition was missed. If the anesthesiologist did not meet all seven conditions for a case, the case is not medically directed (the seven steps).
- Counting concurrency on Medicare patients only, which understates the number of cases being directed.
- Directing while doing other work outside the short list Medicare allows, which turns the cases into supervision.
- QS, G8 or G9 sent without a payment modifier.
- Applying commercial habits to Medicare, such as adding units for physical status.
- Teaching cases billed under the old rules, or without the documentation of presence for key portions.
Medicare contractors sample-review medically directed claims. A physician who cannot produce the documentation can be required to submit it with every later claim.
Sources
- 42 CFR 414.46 (anesthesia payment) and 414.60 (CRNA payment).
- CMS, Medicare Claims Processing Manual, chapter 12, sections 50, 100 and 140.
- CMS, Guidelines for teaching physicians, interns and residents (MLN006347).
- Federal Register, CY 2026 Physician Fee Schedule final rule (anesthesia conversion factors).