Anthem reverses controversial anesthesia coverage decision amid blowback

One of the country’s largest insurers said Thursday it was pulling back a change in how it would pay for anesthesia care in certain states, after doctors and politicians loudly protested.

Anthem Blue Cross Blue Shield told providers in New York, Connecticut, Missouri and Colorado that beginning in February, it would use Medicare metrics to determine payment rates for anesthesia, which is based on how long and complex a procedure is.

An anesthesiology trade group said the move amounted to having the insurance company put an “arbitrary time limit” on procedures. After a certain point, they said insurance wouldn’t pay.

After major backlash this week, which coincided with the killing of another insurer's CEO in New York City, Anthem backed off.

“There has been significant widespread misinformation about an update to our anesthesia policy. As a result, we have decided to not proceed with this policy change,” the company said in a statement to The Hill.

The American Society of Anesthesiologists (ASA) initially sent a letter to Anthem protesting the policy in November, calling it a "cynical money grab" and urging Anthem to reverse it immediately.

“In effect, if a patient has a surgery which lasts longer than the standards accepted by Anthem, Anthem has absolved themselves of responsibility to pay for the anesthesia that is needed for the rest of the encounter,” the group said.

They argued that patients would then be on the hook to pay out-of-pocket for the difference if a procedure ran longer than Anthem would pay, which could range from hundreds to thousands of dollars.

But the backlash gained momentum this week after the fatal shooting of an executive at UnitedHealthcare cast a new spotlight on the health insurance industry.

As news spread across social media, politicians in affected states began voicing their outrage.

“This is appalling. Saddling patients with thousands of dollars in surprise additional medical debt. And for what? Just to boost corporate profits?” Sen. Chris Murphy (D-Conn.) wrote in a post on social platform X. “Reverse this decision immediately.”

“What are they supposed to do? Wake you up and ask if they should keep going” Rep. Rosa DeLauro (D-Conn.) wrote on X.

New York Gov. Kathy Hochul (D) also protested, saying Wednesday on X she was “going to make sure New Yorkers are protected.”

Hochul celebrated the reversal Thursday.

"We pushed Anthem to reverse course on their decision to strip anesthesia coverage away from New Yorkers and today they will be announcing a full reversal of this misguided policy,” she said in a statement. “Don’t mess with the health and well-being of New Yorkers — not on my watch.”

Anthem in its statement said it never intended to deny payments for “medically necessary services.”

“To be clear, it never was and never will be the policy of Anthem Blue Cross Blue Shield to not pay for medically necessary anesthesia services. The proposed update to the policy was only designed to clarify the appropriateness of anesthesia consistent with well-established clinical guidelines,” the company said.

If an anesthesiologist submitted a claim for a procedure that took longer than Medicare said it should, Anthem said it would only pay the “established” Medicare rates, which are often significantly lower than private plans pay.

Anthem previously said it would exempt maternity-related care and patients under the age of 22, and that providers can follow a process to dispute claims if they disagree with a reimbursement decision.

Marianne Udow-Phillips, a lecturer at the University of Michigan School of Public Health, who formerly made coverage decisions at Blue Cross Blue Shield of Michigan, said the policy appeared to be an attempt to squeeze anesthesia providers, who are paid differently than other doctors, like surgeons.

Udow-Phillips said the health plan likely felt it was overpaying anesthesiologists, so it was looking for a way to lower costs.

But that kind of decision is usually made in a contract between the payer and provider. If the plan allowed anesthesiologists to bill patients for the difference in rates, that would amount to “surprise billing on steroids,” she said.

Patients “don't get to choose the anesthesiologist, they don't control how long the procedure takes, so it unusual to put that responsibility on a patient,” she said.

But she drew a direct line from the outrage over the policy to the death of UnitedHealthcare CEO Brian Thompson, who was shot in Manhattan on Wednesday in what police said appeared to be a targeted attack.

“The anger is not unprecedented,” Udow-Phillips said, but the speed of social media amplifies it.

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