Anthem Blue Cross Denies Anesthesia Coverage for Longer Surgeries

In a shocking move, Anthem Blue Cross plans representing New York, Connecticut, and Missouri announced that they would not offer insurance coverage for anesthesia for the full length of some surgeries if they go beyond the expected time frame. On November 14, the American Society of Anesthesiologists (ASA) called on Anthem to reverse course on this policy, which affects the 8.5 million members across these three states.

According to the ASA press release, “Anthem will arbitrarily pre-determine the time allowed for anesthesia care during a surgery or procedure. If an anesthesiologist submits a bill where the actual time of care is longer than Anthem's limit, Anthem will deny payment for the anesthesiologist’s care. With this new policy, Anthem will not pay anesthesiologists for delivering safe and effective anesthesia care to patients who may need extra attention because their surgery is difficult, unusual or because a complication arises.”

Research published in 2023 in the Journal of Multidisciplinary Healthcare found that 37% of surgeries went over the expected time to complete. Those whose times were underestimated were often organ transplants, hepatobiliary surgeries, cardiac surgeries, or surgeries performed on older patients (that is, patients over the age of 50). Additionally, research published in 2022 in JAMA found based on an analysis of Medicare fee-for-service claims that while surgeries are often completed under the expected time in the valuation process, there is substantial variation across procedures, with cardiac surgery lasting 2% longer, thoracic surgery lasting 7% longer, and total hip arthroplasty lasting 5% longer.

This is all to say that while on balance, surgeries aren’t usually running over (indeed, Crespin and his coauthors in JAMA find that gastroenterology procedures actually tend to be 36% shorter than anticipated!), there is complexity and variation when we’re talking about individual patients with different ages and medical histories and potentially different presentations of conditions. Medicine is both art and science.

So, why is Anthem implementing such a policy?

The reality is that this is neither the first nor (presumably) the last example of private health insurers placing profit considerations before patient care, as evidenced by the barrage of coverage denials documented in my own work and in litigation over coverage for nursing home care, behavioral health care, and more. Dare I say, it’s to be expected in a health care system that places such a high degree of power in the hands of for-profit companies (health insurers, but also pharmaceutical companies and others), which have duties to shareholders. They must be mindful of not only growth, but profitable growth. And Anthem didn’t reach $42.6 billion in revenue in the first quarter of 2024 (beating analysts’ expectations) by accepting every medical claim sent their way.

The implications of this are far and wide, as I highlight in my research in the Journal of Health Politics, Policy, and Law and in my forthcoming book: while patients from marginalized groups aren’t more likely to be denied in the first place, they are more likely to have their health and finances destabilized by this insurer practice because of the significant health literacy demands associated with appealing a denial. Navigating the American health insurance bureaucracy is administratively burdensome!

That is, one must know that appealing is an option (learning costs). One must be able to gather the appropriate documentation and coordinate with the physician’s office, which is also overwhelmed with administrative burdens associated with prior authorizations and appeals (compliance costs). And this is all in the setting of a health concern, which can compond things and become overwhelming for the patient and potentially their family (psychological costs). And if the denial was not via prior authorization (that is, if the care was received and the challenge is over the insurer payment), amid the appeal process the patient is likely receiving medical bills, which raises the issue of whether to pay and accrue medical debt (if that is an option) with the hope of reimbursement upon resolution, or whether to hold out at the risk of damaging one’s credit score.

Not surprisingly, the distribution of medical debt in the United States is uneven, with the Kaiser Family Foundation finding in 2022 that 56% of Black and 50% of Hispanic adults reporting that they have debt from medical or dental bills, compared with 37% of White adults with such debt. And this debt totals at least $220 billion, according to a 2024 Peterson-Kaiser Family Foundation Health System Tracker analysis. And most of those struggling with medical bills are not uninsured, but rather are insured but have significant cost sharing.

It should come as no surprise that surgeries are expensive in the United States, with anesthesia being a nontrivial component of that cost. Thus, the new Anthem policy can have significant implications for patients’ health care decisionmaking and accumulation of medical debt.

Will less affluent patients opt out of surgery so as to avoid the risk of having to pay out-of-pocket for the accompanying anesthesia?

Will the resulting patient decisions yield worse health outcomes for those from marginalized groups, reinforcing the already pronounced racial and economic disparities in health?

Will these patients pursue their care but put themselves in a worse financial position (whether accruing debt with accompanying interest payments, or delaying the purchase of other necessities ranging from food to car or home repairs)?

Will patients be at greater risk of experiencing medical errors as physicians try to expedite procedures to minimize patient cost sharing?

Or will physicians be left with uncompensated care?

And what will happen to the patients who are receiving surgical care in emergency settings, when there is not the time for the more considered discussions of the tradeoffs of surgical intervention and associated monetary costs that may or may not patient’s way depending on whether the surgery goes as planned?

It is already known that physicians spend a substantial amount of clinic time discussing with patients the challenges of insurance: why drug B will be easier to get covered than drug A, or why you must try drugs A, B, and C before you can get drug D, or why you may or may not be able to get a given scan before undergoing a course of physical therapy. This new policy compounds this challenge, but in a new way.

After all, prior authorization guards not just against rising costs, but relatedly against overprescribing (e.g., excessive high-tech imaging). But anesthesia for medically necessary surgeries is not an issue of overtreatment. It doesn’t strike at the evidence basis for the treatment. It’s literally just faciliting patients obtaining surgical care that the insurer has approved, and helping the patients to avoid the burdens of significant medical debt. Thus, this goes well beyond the scope of the coverage denials and utilization management that we see in other settings .

Time will tell whether pushback against this policy will yield from Anthem Blue Cross a change of heart, or whether this policy will stick (and potentially spread to other health insurers). But it is clear that this policy is a recipe for disaster for America’s more vulnerable patients.