Anesthesia payment is calculated as (base units + time units + modifying units) multiplied by a conversion factor. Base units reflect the complexity of the procedure, time units reflect how long you cared for the patient, and the conversion factor turns units into dollars.
This single formula drives Medicare, Medicaid, and almost all commercial anesthesia payment. Understand it and every productivity report, job offer, and billing statement becomes readable.
Key points
- Payment = (base units + time units + modifiers) x conversion factor.
- One time unit is 15 minutes; Medicare pays fractional units.
- 2026 Medicare conversion factor: $20.4976 per unit nationally.
- Commercial payers often pay $60 to $100+ per unit.
Base units
Every anesthesia CPT code (00100 through 01999) carries a base unit value. Base units pay for the work common to all cases of that type: the pre-anesthetic evaluation, the plan, induction, and the inherent complexity and risk of the procedure.
Some examples from the CMS anesthesia base unit file (which follows the ASA Relative Value Guide for most codes):
| Code | Procedure area | Base units |
|---|---|---|
| 00142 | Lens surgery (cataract) | 4 |
| 00790 | Upper abdominal intraperitoneal surgery | 7 |
| 00840 | Lower abdominal intraperitoneal surgery | 6 |
| 01402 | Total knee arthroplasty | 7 |
| 00562 | Heart surgery with pump oxygenator | 20 |
Base units are fixed per code. CMS publishes its base unit file each year, and payers can adopt it or use the ASA values. Always check the current year's file before relying on a specific value.
Time units
Anesthesia time starts when you begin preparing the patient for induction in the OR or an equivalent area, and ends when you are no longer in personal attendance and the patient is safely under post-anesthesia care. It is the only part of the formula you directly generate during the case, which is why accurate start and stop times matter so much.
Most payers, including Medicare, define one time unit as 15 minutes. Medicare pays fractional units: 107 minutes is 107/15 = 7.13 units. Some commercial payers round instead, for example to the nearest tenth or up at 7.5 minutes. The rounding rule lives in each payer contract.
Discontinuous time (you leave and return, such as a line placed early and the case starting later) is handled by documenting the separate blocks and summing them, where the payer allows it.
Modifying units
Two optional add-ons exist, and Medicare pays neither:
- Physical status modifiers (P1 to P6). Many commercial payers add units for sicker patients, commonly 1 unit for P3, 2 for P4, 3 for P5. Medicare does not recognize them for extra payment.
- Qualifying circumstances codes (99100 extreme age, 99116 hypothermia, 99135 controlled hypotension, 99140 emergency). Again, commercial payers may pay these; Medicare does not.
The conversion factor
The conversion factor (CF) is dollars per unit. For 2026, the Medicare national anesthesia CF is $20.4976 (and $20.5998 for clinicians who are qualifying participants in an Advanced Alternative Payment Model). The actual amount varies by geographic locality. For comparison, the 2025 national CF was $20.3178.
Commercial conversion factors are negotiated and typically far higher, often $60 to $100 or more per unit depending on the market and the contract. This gap is why payer mix dominates anesthesia group economics, and why hospitals often pay stipends to cover the shortfall on government-heavy case mixes.
A worked example
A CRNA personally performs anesthesia for a total knee replacement (01402, 7 base units). Anesthesia time is 95 minutes. The case is billed QZ, non-medically directed, to Medicare.
- Base units: 7
- Time units: 95 / 15 = 6.33
- Total units: 13.33
- Payment: 13.33 x $20.4976 = about $273 (before locality adjustment; Medicare then pays 80 percent and the patient or secondary coverage owes 20 percent)
Same case at a commercial CF of $75: 13.33 x $75 = about $1,000. Same work, nearly four times the payment. That is anesthesia economics in one example.
How payment splits by care model
The formula prices the case; the modifier decides who collects it. Non-medically directed CRNA cases (QZ) pay 100 percent to the CRNA side. Medically directed cases split 50/50 between the directing physician and the CRNA. Details in medical direction vs medical supervision and CRNA Medicare reimbursement.
Quick answers
How much is one anesthesia unit worth?
Under Medicare in 2026, $20.4976 nationally before locality adjustment. Under commercial contracts it is whatever was negotiated, often three to five times Medicare.
Do base units change with how long the case takes?
No. Base units are fixed per CPT code. Duration is captured entirely by time units.
Does Medicare pay for physical status modifiers?
No. Medicare pays base plus time only. Many commercial payers do pay extra units for P3 to P5 patients and qualifying circumstances.
What counts as anesthesia start time?
When you begin preparing the patient for induction, typically in the OR or an equivalent area. It ends when personal attendance ends and the patient is safely placed under post-anesthesia supervision.