How to Read an Anesthesia Stipend Request: A Checklist for Hospital CFOs
By Andrew Woodmancey, Managing Director · Published
The short answer: an anesthesia stipend request is a subtraction. It is what it costs the group to staff the coverage you require, minus what the group collects from patients and payers. Any increase has to come from one of those two numbers, or from a change in the coverage you asked for. Reading the request means finding which one moved, by how much, and whether the group controlled it. Below is a worked example, what public hospital contracts show, and seven questions to put to the group.
What a stipend request is made of
ECG Management Consultants describes anesthesia financial support as based on the shortfall between the group’s collections and the funding needed to sustain its staffing. A complete request should therefore show four things:
- The coverage required: rooms, hours, call, and whether after-hours coverage is in-house or on call.
- The staffing plan: anesthesiologist and CRNA full-time equivalents (FTEs) and the care-team ratio.
- The cost assumptions: pay and benefits per FTE, billing fees, overhead.
- The revenue assumptions: units billed, payer mix, collections per unit, and how those compare with the prior year.
The public board packets we reviewed state the dollar amount and the coverage terms but not the collections behind them, so the data request to the group matters.
Worked example: the same increase from five different causes
Take an illustrative group that covers 10 anesthetizing locations at a 1:3 anesthesiologist-to-CRNA ratio. At roughly $725,000 per location a year (the AOC care-team cost model: median pay plus 20% benefits and 1.25 FTE per room) the coverage costs $7.25 million. Assume the group collects $5.0 million. The stipend is $2.25 million, or $225,000 per location. Now see what moves it:
| What changes | Cost | Collections | Stipend | Change |
|---|---|---|---|---|
| Base case | $7,250,000 | $5,000,000 | $2,250,000 | – |
| Pay assumptions rise 5% | $7,612,500 | $5,000,000 | $2,612,500 | +$362,500 |
| Collections fall 5% | $7,250,000 | $4,750,000 | $2,500,000 | +$250,000 |
| 3 points of units shift from commercial to Medicare* | $7,250,000 | $4,804,348 | $2,445,652 | +$195,652 |
| Medicare conversion factor falls 1.38%* | $7,250,000 | $4,988,000 | $2,262,000 | +$12,000 |
| One more anesthesiologist, no added collections | $7,910,000 | $5,000,000 | $2,910,000 | +$660,000 |
*Assumes 40% of units are Medicare, 40% commercial and 20% other, with commercial paying four times Medicare per unit (ASA’s 2025 survey average of $82.43 against Medicare’s 2026 national $20.4976) and other payers 1.5 times. The 1.38% is CMS’s proposed 2027 cut. The added anesthesiologist is $550,000 (the September 2026 AOC job-posting median) plus 20% benefits. Illustrative arithmetic, not a forecast.
Three lessons follow. A federal rate cut barely moves a stipend; payer mix and pay assumptions move it far more. An added FTE is the largest single step. And a request that says only “rising costs” could be any of these rows, which is why you ask for the bridge.
What public contracts show
| Contract | What the board packet shows |
|---|---|
| Kern County Hospital Authority, October 2016 | Added an anesthesiologist for an additional annual subsidy of $383,292, with the annual maximum set at $5,661,792. The amendment required one physician for every four CRNAs and set a volume expectation of more than 650 cases a month, up from 612. |
| Kern County Hospital Authority, October 2025 | Amendment 6 describes a monthly payment of $771,220 in year one, an annual total of $9,254,643, and 4% increases in years two and three. The packet also describes an annual collection offset of $1,325,000, up $125,000 from $1,200,000. |
The 2016 amendment is the cleanest example of the right structure: a defined staffing change, a defined price, and a stated volume and ratio expectation. The packets do not publish collections per unit, so the public record cannot tell you whether a given group’s revenue is high or low. Your own data can.
Seven questions to put to the group
- What changed since the last agreed figure? Ask for a bridge from last year’s stipend to this year’s request, split into pay, other cost, collections and coverage.
- What pay is assumed, and against what? Compare per-FTE pay with current market data. AOC’s September 2026 job-posting medians are $550,000 for anesthesiologists and $300,000 for CRNAs (pay index). A survey median is a reference point, not a fair market value opinion.
- Are collections reasonable for your payer mix? Ask for gross collection rate, collections per ASA unit, days in accounts receivable, the share of receivables over 90 days, denial rates and charge lag, the metrics HSG Advisors lists in its anesthesia subsidy guidance. The ASA’s 2025 commercial survey reports a mean conversion factor of $82.43 and a median of $76.00 across 805 contracts, with state averages from $65.48 in Illinois to $121.73 in New York. Medicare’s 2026 national figure is $20.4976, and by locality it runs from $19.42 to $28.15.
- Is the group working its payer rates? HSG’s warning is direct: a hospital “should not automatically increase its subsidy dollars if its contracted group is not putting forth the effort to try for better rates.” Ask what rate negotiations the group has run and what they produced.
- How productive is each FTE? ECG’s dashboard looks at ASA units per FTE, the CRNA-to-anesthesiologist ratio, OR utilization, hours per FTE and calls per month. Compare with the staffing model in the care-team post.
- Is the request for the coverage you actually require? The MGMA’s guidance on anesthesia arrangements notes that even “24/7 coverage” is not enough: say whether it is in-house or on call, and name provider types and FTEs. Otherwise you may pay for more than you need.
- Who carries the risk, and can you reconcile it? Under an uncapped revenue guarantee the hospital makes up every dollar the group does not collect, as Enhance Healthcare describes it. Check for a cap, a periodic reconciliation and audit rights. The agreement checklist covers the clauses.
Where the benchmarks help and where they do not
Commercial anesthesia rates are far above Medicare’s. GAO found in 2020 that private insurance payments for anesthesia services averaged more than 3.5 times Medicare’s, and ASA’s 2025 survey puts the mean commercial conversion factor near four times the Medicare national rate. That gap is why a group with good commercial contracts can need little or no stipend and a group with poor ones can need a lot, at identical staffing. Research on California hospitals (Duffy, Green and Trish, Health Affairs, 2025) found stipends were more likely and larger where the public-payer share was higher, though the authors stop short of a causal claim. Treat benchmarks as a way to ask better questions, not as an answer.
Before you approve
- Get the bridge, the collections data and the staffing plan in writing.
- Tie any increase to a defined coverage or staffing change.
- Confirm the resulting amount is supportable as fair market value and commercially reasonable. See what an FMV opinion should contain.
- Model the result in the subsidy calculator before the budget meeting.
Sources
- Kern County Hospital Authority board packets, October 19, 2016 and October 15, 2025.
- ECG Management Consultants, Managing the Cost of Anesthesia Stipends (2023).
- HSG Advisors, Anesthesia Subsidy Assessment: Fair Market Value and Beyond, American Health Law Association (2020).
- MGMA, Key considerations for your next anesthesia arrangement (March 2024); Enhance Healthcare, Anesthesia subsidies: putting it all on the table.
- ASA, Commercial Conversion Factor Survey Results, ASA Monitor (November 2025); CMS 2026 anesthesia conversion factors by locality.
- U.S. Government Accountability Office, GAO-21-41 (2020).
- Duffy, Green and Trish, Health Affairs (June 2025).