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Certified Registered Nurse Anesthetist (CRNA) / Anesthesiology Assistant (AA) Exemption to the Fee Schedule


Under the provisions at 42 CFR 412.113©, a rural hospital or Critical Access Hospital (CAH) may qualify to receive anesthesiology services furnished by employed or contracted nonphysician anesthetists (Certified Registered Nurse Anesthetist (CRNA)/Anesthesiology Assistant (AA)) at cost versus the fee schedule on a calendar year basis. It is the provider’s responsibility to request and supply all supporting documentation to determine if the qualifications listed at 42 CFR 412.113© are met. Documentation sent to the contractor must be postmarked by December 31st.


To determine if the provider meets the requirements of 42 CFR 412.113( c) to qualify for payment on a reasonable cost basis for anesthesia services provided in the hospital or CAH by qualified nonphysician anesthetists (certified registered nurse anesthetists and anesthesiologist’s assistants) employed by the hospital or CAH or obtained under arrangements.

Who are Qualified:

  • The hospital or CAH is located in a rural area as defined in 412.62(f) and is not deemed to be located in an urban area under the provisions of 412.64(b)3.
  • The hospital or CAH must have employed or contracted with a qualified nonphysician anesthetist, as defined in 410.69 of this chapter. The hospital or CAH may employ or contract with more than one anesthetist; however, the total number of hours of service furnished by the anesthetists may not exceed 2,080 hours per year.
  • The hospital or CAH must provide data for its entire population to demonstrate that the volume of surgical procedures inpatient and outpatient) requiring anesthesia services did not exceed 250 procedures.
  • Each qualified nonphysician anesthetist employed by or under contract with the hospital or CAH has agreed in writing not to bill on a reasonable charge basis for his or her patient care to Medicare beneficiaries in that hospital or CAH.
  • Some CAH facilities may be geographically reassigned to urban regions under the CBSA designation. In those instances where special exemption has been granted by the CMS Regional Office for the hospital to retain their CAH status in the urban geographical region, a copy of the CMS exemption letter should be sent along with the supporting documentation.

To Maintain CRNA status:

  • To maintain its eligibility for reasonable cost payment under paragraph (c)(2)(1) must demonstrate prior to January 1 of each respective year that for the prior year its volume of surgical procedures requiring anesthesia service did not exceed 800 procedures.

Supporting Documentation:

  • A signed statement by each CRNA/AA agreeing that he/she will not bill on a fee schedule basis for patient care services. This statement must include the current review period.
  • Supporting documentation to define the total number of hours spent at the facility, whether performing anesthesia or other services.
  • Copies of CRNA/AA contracts. If the CRNA/AA is employed by the hospital/CAH, the CRNA exemption request submitted by the facility should indicate that the CRNA/AA is an employee of the hospital/CAH.
  • A surgical log with dates of procedures that were performed between January 1st and September 30th of the current year. The long must include:

    Dates (surgical)
    Patient Name
    Surgeon Name
    Anesthetists’ name (CRNA/AA)
    Type of Anesthesia
    Type of Surgical Procedure

Outpatient Services: Standard Payment Method (Method I) or Election of Optional Payment Method (Method II).

 Standard Payment Method – Reasonable Cost-Based Facility Services, With Billing Medicare Administrative Contractor (MAC) for Professional Services

Under Section 1834(g)(1) of the Act, a CAH is paid under the Standard Payment Method unless it elects to be paid under the Optional Payment Method. For cost reporting periods beginning on or after January 1, 2004,under the Standard Payment Method, payments for outpatient CAH facility services are made at 101 percent of reasonable costs.

Payment for professional medical services furnished in a CAH to registered CAH outpatients is made by the MAC under the Medicare Physician Fee Schedule (PFS), as is the case when such professional services are furnished in a hospital outpatient department. For purposes of CAH payment, professional medical services are defined as services furnished by a physician or other quailed practitioner.

Optional Payment Method – Reasonable Cost-Based Facility Services Plus 115 Percent Fee Schedule Payment for Professional Services:

Under Section 184 (g)(2) of the Act, a CAH may elect the Optional Payment Method, under which it bills the MAC for both facility services and professional services furnished to its outpatients by a physician or practitioner who has reassigned his or her billing rights to the CAH. However, even if a CAH makes this election, each physician or practitioner who furnishes professional services to CAH outpatients can choose to either:

  • Reassign his or her billing rights to the CAH, agree to be included under the Optional Payment Method, attest in writing that he or she will not bill the MAC for professional services furnished in the CAH outpatient department, and look to the CAH for payment for professional services, or
  • File claims for his or her professional services with the MAC for standard payment under the Medicare PFS.

For each physician or practitioner who agrees to be included under the Optional Payment Method and reassigns benefits accordingly, the CAH must forward a copy of a completed Form CMS-855R/Medicare Enrollment Application for Reassignment of Medicare Benefits to the MAC and keep the original on file. This attestation will remain at the CAH.  Once the Optional Payment Method is elected, it will remain in effect until the CAH submits a termination request to the MAC. A CAH is no longer required to make an annual election to be paid under the Optional Payment Method in a subsequent year. If a CAH elects to terminate its Optional Payment Method, the termination request must be submitted in writing to the MAC at least 30 days prior to the start of the next cost reporting period.

The Optional Payment Method election applies to all CAH professional services furnished in the CAH outpatient department by the physicians and practitioners who:

  • Agree to be included under the Optional Payment Method by reassigning their billing rights to the CAH;
  • Complete Form CMS-855R; and
  • Attest in writing that they will not bill the MAC for their outpatient professional services.

This information can be found:

Form CMS-855R at PDF on the CMS website. To find MAC contact information, visit Website on the CMS website.

Where to send:

Please submit all documentation:

Via email to:

Or by postage service or courier to:

J15 Part A Audit & Reimbursement
26 Century Blvd STE ST610
Nashville, TN 37214-3685

Reviewed: 12.02.22


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