Anesthesia case study

Overview

Customer: Midwest Regional Hospital, USA

Company: Artigen

Industry: Healthcare

Date:
May 2025 

Midwest Regional Hospital, a 300-bed facility serving a diverse patient population, faced significant challenges with manual anesthesia coding in their Electronic Health Record (EHR) system. Inaccurate Anesthesia Base Units (ABU) and Time Units (TU) calculations, frequent claim denials, and missed revenue opportunities hindered financial performance and operational efficiency. Artigen introduced Sedate AI, an advanced AI-assisted anesthesia coding solution, to revolutionize the hospital’s coding workflow. This case study provides a detailed comparison of manual coding versus AI-assisted coding, highlighting transformative outcomes based on real-life data. 

Challenges faced in Manual Anesthesia Coding

Anesthesia Coding- case study-2

Manual coding required coders to painstakingly review operative reports, assign Current Procedural Terminology (CPT) codes, apply modifiers, and calculate units. This labor-intensive process was error-prone, particularly in identifying comorbidities, documenting procedure complexity, and accurately recording time units. The hospital faced a high claim denial rate, delayed reimbursements, and suboptimal revenue due to undercoding and non-compliance with Centers for Medicare & Medicaid Services (CMS) and American Society of Anesthesiologists (ASA) guidelines.

Manual Coding Metrics (Pre-Sedate AI)

  • Period Analyzed: Q1 2024
  • Total Procedures Coded: 1,200
  • Average Revenue per Procedure: $585 (at $75 per unit)
  • Claim Denial Rate: 18%
  • Average Coding Time per Procedure: 15 minutes
  • Annual Revenue (Estimated): $702,000

Key Issues:

  • Missed modifiers (e.g., P3/P4 for patient physical status, reflecting comorbidities).
  • Inconsistent time unit calculations due to manual documentation errors.
  • Undercoding of complex procedures, leading to revenue loss.
  • High administrative burden from claim rejections and rework.

Example Manual Coding Data

Anesthesia Manual coding

Solution: AI-Assisted Coding with Sedate AI

Artigen deployed Sedate AI, a cutting-edge AI-powered coding assistant seamlessly integrated with the hospital’s EHR system. Sedate AI leverages natural language processing (NLP) and machine learning to analyze operative reports in real-time, extracting critical details such as procedure type, patient comorbidities, and anesthesia duration. The system suggests precise CPT codes, modifiers, and unit calculations, ensuring compliance with CMS and ASA standards while minimizing coder workload. Time units are calculated as 1 unit per 15 minutes of anesthesia time.

Implementation Details

  • Timeline: Deployed in Q2 2024, fully operational by Q3 2024. 
  • Training: Coders underwent a 2-week training program to master Sedate AI’s intuitive interface. 
  • Integration: Full compatibility with Epic EHR, enabling real-time coding during procedures. 


Features

  • Automated Code Suggestions: Recommends CPT codes and modifiers based on clinical documentation. 
  • Real-Time Unit Calculations: Accurately computes ABU and TU using procedure logs and anesthesia records (1 TU = 15 minutes). 
  • Coder Assist: Provides AI-driven guidance for complex cases, reducing decision fatigue. 
  • Audit Trail: Maintains a record of coding decisions for payer audits.


AI-Assisted Coding Metrics (Post-Sedate AI)

  • Period Analyzed: Q3 2024 
  • Total Procedures Coded: 1,300 
  • Average Revenue per Procedure: $930 (at $75 per unit) 
  • Claim Denial Rate: 4% 
  • Average Coding Time per Procedure: 6 minutes 
  • Annual Revenue (Estimated): $1,209,000 


Key Improvements

  • Accurate application of modifiers (e.g., P3/P4 for comorbidities, QS/G8 for monitored anesthesia care). 
  • Precise time unit calculations aligned with actual procedure duration (1 TU = 15 minutes). 
  • Comprehensive coding for complex procedures, capturing all billable components. 
  • Reduced administrative burden from fewer claim denials.

Example AI-Assisted Coding Data (Updated with P3 and P4 Modifier Units)

Anesthesia AI coding

Comparative Analysis

Qualitative Improvements

  • Error Reduction: Sedate AI eliminated undercoding and missed modifiers, ensuring all billable components were captured.
  • Staff Satisfaction: Coders reported reduced stress and improved job satisfaction due to streamlined workflows.
  • Payer Relations: Lower denial rates improved relationships with payers, accelerating reimbursements.
  • Scalability: The hospital handled an 8.3% increase in procedure volume without additional staffing.

Key Benefits of Sedate AI

1. Precision Coding

  • Sedate AI ensures accurate CPT codes, modifiers, and unit calculations (1 TU = 15 minutes), maximizing reimbursement.
  • Example: Adding P3 modifier for a patient with COPD increased units by 2.0, adding $150 per procedure.

2. Efficiency Gains:

  • Coding time dropped by 60%, from 15 to 6 minutes per procedure, enabling coders to process 3.2x more cases.
  • Real-time suggestions eliminated manual searches for coding guidelines, saving hours weekly.

3. Revenue Optimization:

  • Average revenue per procedure rose by 59%, adding $345 per procedure.
  • Annual revenue increased by $507,000 for 1,300 procedures, a 72% uplift.

4. Compliance and Reduced Denials:

  • Sedate AI ensured adherence to CMS, ASA, and payer-specific guidelines, minimizing audit risks.

5. Provider and Coder Empowerment:

  • Real-time coding support reduced administrative burden, allowing anesthesiologists to focus on patient care.
  • Coders benefited from AI-driven insights, enhancing confidence in complex cases.

Net Impact

  • Real-Time Coding Support: Sedate AI enabled concurrent coding during procedures, improving accuracy and speed.
  • Accurate CPT/Modifier Mapping: Eliminated errors in code selection and modifier application.
  • ASA and CMS Compliance: Ensured all codes met regulatory and payer standards.
  • Coder Productivity: 3.2x increase, freeing up resources for strategic tasks.
  • Revenue Impact: $507,000 additional annual revenue for 1,300 procedures.
  • Elimination of Provider Abrasion: Fewer claim denials and rework reduced friction with payers and staff.
  • Agnostic EHR Integration: Seamless compatibility with Epic and other EHR platforms.
  • Net Revenue Increase per Procedure: ~$390 per procedure.
  • Time to Close EHR Gaps: Less than 6 minutes per patient, down from 15 minutes.
  • Patient Care Enhancement: Accurate coding supported better resource allocation, indirectly improving care quality.

Conclusion

The adoption of Sedate AI by Artigen at Midwest Regional Hospital marked a paradigm shift in anesthesia coding, transforming revenue cycle management and operational efficiency. By addressing inaccuracies in CPT code assignment, modifier usage, and unit calculations (with 1 TU = 15 minutes), Sedate AI boosted revenue by 72%, reduced claim denials by 78%, and enhanced coder productivity by 220%. The hospital’s ability to handle increased procedure volumes without additional staffing underscores the scalability and transformative potential of AI-assisted coding in healthcare.