Medical direction, medical supervision, and independent (non-medically directed) practice are three distinct billing models for anesthesia care, each with its own modifiers and payment rules. Medical direction requires a physician to complete seven specific steps on no more than four concurrent cases; supervision applies when those conditions are not met; independent practice means the CRNA bills alone.
These are Medicare payment categories, defined in federal regulation, and they decide how every dollar on the claim is split. Here is how to keep them straight.
Key points
- Medical direction: seven TEFRA steps, no more than four concurrent rooms.
- Direction splits payment 50/50 between physician (QY/QK) and CRNA (QX).
- Supervision (AD) pays the physician only 3 base units.
- No direction billed means QZ, and the CRNA collects 100 percent.
The six modifiers
| Modifier | Who bills it | Model |
|---|---|---|
| AA | Anesthesiologist | Personally performed |
| QY | Anesthesiologist | Medical direction of one CRNA |
| QK | Anesthesiologist | Medical direction of 2 to 4 concurrent procedures |
| QX | CRNA | CRNA service with medical direction |
| QZ | CRNA | CRNA service without medical direction |
| AD | Anesthesiologist | Medical supervision, more than 4 concurrent procedures |
A medically directed case produces two claims: the physician's (QY or QK) and the CRNA's (QX). A non-medically directed case produces one claim, the CRNA's QZ.
Medical direction: the seven TEFRA steps
Under 42 CFR 415.110, a physician can bill medical direction only if the service meets all of these conditions for each patient, and the physician directs no more than four anesthesia procedures concurrently. The physician must:
- Perform a pre-anesthetic examination and evaluation
- Prescribe the anesthesia plan
- Personally participate in the most demanding procedures of the plan, including induction and emergence, where applicable
- Ensure that any procedures in the plan that he or she 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
The regulation also limits what else the directing physician can be doing. While directing, the physician may perform only certain allowed services, such as addressing an emergency of short duration nearby, administering an epidural for labor, or checking on another patient. Running a personally performed case at the same time breaks direction.
Documentation matters: the steps must actually be performed and documented. Miss a step on one case and that case no longer qualifies as medical direction. Groups then typically bill it QZ (CRNA, non-medically directed), or the physician bills AD if the failure was a concurrency breach.
Medical supervision (AD)
Supervision is the fallback category when a physician is involved with more than four concurrent procedures, or is involved but does not meet the seven steps. It pays poorly by design.
Under AD, the physician is paid on the basis of 3 base units per procedure, plus one additional time unit if the physician can document presence at induction. No time units beyond that. The CRNA on a supervised case still bills, and payers price the CRNA claim under their non-directed rules; check your Medicare Administrative Contractor and payer policies for how they want these billed.
Do not confuse billing supervision (AD) with facility-level physician supervision. The Medicare conditions of participation require CRNAs to be supervised by a physician unless the state has opted out; that rule is about facility certification, not claims. See CRNA opt-out states.
Independent practice (QZ)
When no physician bills direction, the CRNA bills QZ and receives 100 percent of the anesthesia fee schedule amount. This is how solo CRNAs, all-CRNA groups, and many rural hospitals bill. Full detail in the QZ modifier guide.
How payment splits
Medicare prices the case once, using base units plus time units times the conversion factor, then splits by model:
| Model | Physician gets | CRNA gets |
|---|---|---|
| AA (physician alone) | 100% | n/a |
| QY/QK + QX (direction) | 50% | 50% |
| QZ (no direction) | n/a | 100% |
| AD (supervision) | 3 base units (+1 time unit if at induction) | per payer rules |
Notice the economics. One physician directing four rooms collects 50 percent of four cases, which is why the care team model exists. An all-CRNA model collects 100 percent of each case with no physician cost. These trade-offs drive staffing models, hospital stipends, and the business case in our group revenue calculator.
Why this matters to you
If you work QX cases, half the professional fee you generate goes to the directing physician's claim. If your group bills QZ, the CRNA side collects it all. Knowing which model your facility bills tells you what your work is actually worth, which is useful in contract negotiation and when weighing 1099 opportunities.
Questions
Can a physician direct five rooms?
Not as medical direction. At five or more concurrent procedures the physician's involvement becomes supervision and is billed AD at sharply reduced payment.
Is QZ the same as unsupervised?
No. QZ means no physician billed medical direction. Facility-level supervision requirements can still apply in non opt-out states, and a surgeon or other physician may satisfy them.
Who decides which model a group bills?
The group and facility choose the staffing and billing model, but the claim must reflect what actually happened and was documented on each case.
Do commercial payers follow TEFRA?
Many mirror Medicare's modifiers and splits, but not all. Each contract controls. Verify before assuming the 50/50 split or the QZ 100 percent rule applies.