The short answer: for an anesthesiologist to bill Medicare for medical direction (modifier QK or QY), splitting the fee 50/50 with a CRNA, the regulation at 42 CFR 415.110 requires seven things for every patient: a pre-anesthetic exam, the anesthesia plan, personal participation in the most demanding parts including induction and emergence, making sure anything the anesthesiologist does not do is done by a qualified person, frequent monitoring, physical presence for emergencies, and post-anesthesia care. The anesthesiologist may direct no more than four cases at once and may not take on other work that compromises any of the seven. Miss one and the case is not medical direction. It becomes medical supervision (AD), which pays the anesthesiologist a fraction of the fee.
The seven conditions
For each patient, the medically directing anesthesiologist must:
- Perform a pre-anesthetic examination and evaluation. The anesthesiologist’s own assessment, documented by the anesthesiologist.
- Prescribe the anesthesia plan. The plan is the physician’s, even when a CRNA delivers it.
- Personally participate in the most demanding procedures in the plan, including induction and emergence where applicable. This is the condition most often missed when one anesthesiologist covers rooms whose inductions or emergences overlap.
- Ensure that any procedures in the plan that the anesthesiologist does not perform are performed by a qualified individual.
- Monitor the course of anesthesia administration at frequent intervals.
- Remain physically present and available for immediate diagnosis and treatment of emergencies.
- Provide indicated post-anesthesia care.
On top of the seven, the anesthesiologist may direct no more than four anesthesia procedures concurrently, counting patients of every payer, and may not perform any other services that would cause one of the seven to be missed.
What the anesthesiologist may do while directing
Medicare’s claims manual lists the activities that do not break medical direction:
- addressing an emergency of short duration in the immediate area;
- administering an epidural or caudal anesthetic to ease labor pain;
- periodic, rather than continuous, monitoring of an obstetric patient;
- receiving patients entering the operating suite for the next surgery;
- checking on or discharging patients in the recovery room;
- handling scheduling matters.
Leaving the immediate area of the operating suite for more than short periods, or spending extended time on an emergency, ends medical direction for the cases being covered. Medicare then treats them as medical supervision.
What the record has to show
The physician, not the CRNA, must document the pre-anesthetic examination and evaluation, the post-anesthesia care, and presence during the most demanding procedures, including induction and emergence where applicable. The claims manual also expects the record to show the physician was present for some portion of the monitoring. Within a group, a different anesthesiologist may perform the pre-anesthetic or post-anesthesia work, as long as the record identifies who did it.
| Condition | What the record should show |
|---|---|
| 1. Pre-anesthetic exam | The anesthesiologist’s own pre-anesthetic note |
| 2. Anesthesia plan | The plan, attributed to the anesthesiologist |
| 3. Demanding procedures | The anesthesiologist’s presence at induction and emergence, at times that do not clash with the other rooms being directed |
| 4. Qualified individual | Who performed each part the anesthesiologist did not |
| 5. Frequent monitoring | Presence during part of the maintenance phase |
| 6. Physically present | Concurrency of four or fewer and no absences from the suite |
| 7. Post-anesthesia care | The anesthesiologist’s post-anesthesia note |
Medicare contractors review samples of medically directed claims. A physician who cannot produce this documentation can be required to submit it with every later claim.
What a missed step costs
Under medical direction the anesthesiologist and the CRNA each receive half of the full fee. Under medical supervision the anesthesiologist receives three base units, plus one time unit if present at induction, however long the case lasts, while the CRNA still receives half. On a case worth 9 units, about $184 at the 2026 national conversion factor, the anesthesiologist’s share drops from about $92 under direction to at most about $82 under supervision, and the gap grows with every longer case. Cases billed as directed that were really supervised are overpayments that can be recouped.
The modifiers themselves are explained in our guide to anesthesia modifiers.
Why a hospital should care
Most hospital anesthesia arrangements are built on a care team: one anesthesiologist directing up to four CRNAs. The economics of that model, and the subsidy that supports it, assume the group can bill medical direction on those cases. If the schedule makes the seven conditions hard to meet, with too many simultaneous inductions, too few anesthesiologists for the rooms running or an anesthesiologist pulled away to do cases personally, the group collects less than the model assumes and the shortfall tends to come back to the hospital as a request for more support. A schedule and staffing review that checks whether direction is achievable room by room is often the quickest way to find where a subsidy is leaking.
Sources
- 42 CFR 415.110, conditions for payment: medically directed anesthesia services.
- 42 CFR 414.46, payment for anesthesiology services.
- CMS, Medicare Claims Processing Manual, chapter 12, sections 50.C, 50.D and 140.4.