Anesthesia group threatening to leave? Your first 30 days

Your anesthesia group has told you it needs a much larger subsidy, or it will give notice or stop covering some of your sites. It feels like an emergency. In most cases you have more time than the first meeting suggests.

What you do in the next 30 days decides whether you negotiate from facts or from pressure. Here is the order we would take it in.

Don't answer in the room

Whether the news comes by letter or in a meeting, keep your first response short. Thank the group. Ask for the request in writing, with the numbers behind it. Set a date to respond. Then stop.

Do not counter, threaten or promise anything that day. A quick yes becomes the starting point for the next renewal. A quick no can start the exit you are trying to avoid.

Name your team within a day. One executive owns the issue. Around that person: the CFO, the CMO, the perioperative director and healthcare counsel. Keep it small, and agree who speaks to the anesthesia group. One voice, not five.

Assume good faith. The group's economics may be genuinely strained. Writing for HFMA in January 2026, Nathan Kaufman put hospital anesthesia subsidies at $10,000 to $30,000 per bed, and concluded that "most anesthesia groups are not sustainable without significant support from the hospital."¹ A large ask is not bad faith. It still needs testing.

Read the contract the same day

Pull the agreement and every amendment, and read them with counsel. The answers set your timeline.

• Notice. How much notice does each side owe to end the contract without cause? Is the letter formal notice, or a proposal?
• Cause and cure. What counts as a breach, and how long does each side have to fix one?
• Coverage during notice. Must the group keep covering every site on the schedule until the last day?
• Exclusivity. Can you bring in interim clinicians while the contract runs?
• Non-solicitation. Can you, or a new group, hire the clinicians in your ORs today? Check their own agreements too.
• Privileges. Are privileges tied to the contract, so they end when it does?
• Data and audit rights. What are you entitled to see about collections, staffing and payer mix?
• Reopeners. Does the contract allow mid-term renegotiation, and on what terms?

Ask counsel how any new payment will be supported. Lawyers at McDonald Hopkins note that, under federal fraud and abuse laws, payments to anesthesia providers must reflect fair market value for services actually rendered and cannot be tied to referrals.² A rushed increase can become a compliance problem as well as a budget one.

Rebuild the numbers, and understand what drives them

Before the next meeting, build your own view of the request from your own data:

• Case volume by site, day and hour
• Staffed hours by site, set against the hours actually used
• Payer mix from your own registration data
• The group's collections, staffing and locum use, if your contract gives you data rights

Payer mix matters most. Medicare's standard 2026 anesthesia conversion factor is $20.4976 per unit.³ Kaufman reports that the national average commercial payment was $80.70 per unit in 2024.¹ A modest shift toward Medicare patients moves the group's revenue by real money, with no change in the work.

Then look at the forces behind the ask. Some are real and outside anyone's control:

• Medicare rates. CMS set the anesthesia conversion factor at $22.2730 for 2019.⁴ The 2026 rate includes a one-year 2.5% increase set by statute.³ For 2027, CMS has proposed $20.2143.⁵ A group planning its 2027 budget sees that number.
• Clinician supply. The share of facilities reporting an anesthesia staffing shortage rose from 35% in early 2020 to 78% in late 2022, according to the American Society of Anesthesiologists.⁶ Scarcity pushes pay up.
• Commercial revenue. Under the No Surprises Act, out-of-network payment disputes with insurers can go to federal arbitration. In disputes from 2023 through mid-2024, providers and facilities won 80% of the time, and the median award in anesthesia disputes was about twice the insurer's benchmark rate, the qualifying payment amount.⁷ Ask how much of the group's commercial income now depends on those disputes.

Other parts belong to you. The coverage grid, the number of sites and their hours are hospital decisions. Our look at why anesthesia subsidies keep rising covers these forces in more depth, and our questions to ask before renewing list the data to request.

Build a contingency plan quietly

Build it with the same small team, and hope not to need it. A credible fallback changes how you negotiate, even if no one outside the room sees it.

• Interim coverage. Ask locum and interim coverage providers what they could staff, how fast and at what cost. Get it in writing.
• Consolidation. Identify sites or late-day rooms you could close, combine or move if coverage shrank. Your utilization data will point to them.
• Credentialing. Every interim clinician needs privileges through your medical staff process. Ask your medical staff office for a realistic timeline, and whether temporary privileges could bridge a gap.
• Payer enrollment. CMS allows its Medicare contractors up to 50 calendar days to process an online enrollment application that needs no follow-up, and up to 85 days when they must ask for more information.⁸ A physician's Medicare billing privileges begin no earlier than the date an approved application was filed.⁹ Commercial plans run their own timelines.
• Network status. An interim group may not be in network with your commercial plans. Federal law still bars it from billing those patients more than in-network cost sharing at an in-network hospital, and for anesthesiology, patients cannot waive that protection.¹⁰ Ask how any interim group expects to be paid. The answer will show up in your cost.

If a change starts to look likely, our transition plan for changing anesthesia groups goes further.

Keep surgeons and the board ahead of the story

News of a dispute travels fast in a surgical department. If surgeons hear it first from the anesthesia group, that version becomes the story.

Brief the board chair or finance committee early. Bring facts, options and a timeline, not alarm.

Then have the CMO and surgical chiefs talk with surgeon leaders. Say what you know, what will not change this month and whom to call with questions. Do not criticize the group. Its clinicians still care for your patients every day, and many may have had no part in writing the letter.

Negotiate with options, and know when to test the market

A demand framed as yes or no rarely has to be answered that way. Come back with structure:

• Tie any increase to a coverage grid. Pay for defined sites and hours, written into the contract as an exhibit.
• Add metrics and data rights. Ask for monthly reporting on collections, staffing and coverage, with audit rights. The McDonald Hopkins lawyers say groups seeking a stipend should expect this.²
• Shorten the term. One or two years with a reopener, rather than locking in a new baseline for five.
• Phase the increase. Step it up against milestones, such as vacancies filled or sites fully covered.
• Look at commercial rates. Kaufman notes that some hospital-based groups receive as much as twice the commercial reimbursement of others.¹ If rates are weak, part of the fix may sit with payers, not only with your subsidy.

Know when to test the market. If the group will not share data, if the ask cannot be reconciled with your numbers, or if service problems came before the request, a structured request for proposals may be the better path. Run it honestly, against your own coverage grid. Our anesthesia RFP guide explains how.

A first-30-days checklist

• Days 1–2: Acknowledge in writing. Set a response date. Name the executive owner and team. Engage counsel.
• Days 1–5: Read the contract with counsel: notice, cure, coverage during notice, exclusivity, non-solicitation and data rights.
• Days 3–10: Send the group a written data request. Pull your own volume, staffing and payer data.
• Days 5–15: Brief the board chair and surgeon leaders.
• Days 10–20: Rebuild the numbers. Separate what you can change from what you cannot.
• Days 10–25: Build the contingency plan: interim coverage quotes, consolidation options, credentialing and enrollment timelines.
• Days 20–30: Return with a structured counterproposal, or a decision to test the market.

Sources

1. Nathan Kaufman, "Nathan Kaufman: Hospital-based anesthesia and radiology operate in a broken financial model," HFMA, January 2026. https://www.hfma.org/finance-and-business-strategy/physician-compensation/hospital-based-anesthesia-and-radiology-a-broken-financial-model/ ↩ ↩² ↩³

2. Rachel Carey and Elizabeth Sullivan, "Success in Anesthesia Agreements: Key Strategies for Effective Anesthesia Contracting," McDonald Hopkins Insights, August 2025. https://www.mcdonaldhopkins.com/insights/news/success-in-anesthesia-agreements-key-strategies-for-effective-anesthesia-contracting ↩ ↩²

3. Centers for Medicare & Medicaid Services, "Medicare and Medicaid Programs; CY 2026 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies (final rule)," Federal Register, November 2025. https://www.federalregister.gov/documents/2025/11/05/2025-19787/medicare-and-medicaid-programs-cy-2026-payment-policies-under-the-physician-fee-schedule-and-other ↩ ↩²

4. Centers for Medicare & Medicaid Services, "Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2019 (final rule)," Federal Register, November 2018. https://www.federalregister.gov/documents/2018/11/23/2018-24170/medicare-program-revisions-to-payment-policies-under-the-physician-fee-schedule-and-other-revisions ↩

5. Centers for Medicare & Medicaid Services, "Medicare and Medicaid Programs; CY 2027 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies (proposed rule)," Federal Register, July 2026. https://www.federalregister.gov/documents/2026/07/16/2026-14327/medicare-and-medicaid-programs-cy-2027-payment-policies-under-the-physician-fee-schedule-and-other ↩

6. American Society of Anesthesiologists, "Anesthesia Workforce Shortage Poses Threat to Health Care," ASA News Release, June 2024. https://www.asahq.org/about-asa/newsroom/news-releases/2024/06/anesthesia-workforce-shortage-poses-threat-to-health-care ↩

7. Matt McGough, Nisha Kurani and Michelle Long, "The performance of the federal independent dispute resolution process through mid-2024," Peterson-KFF Health System Tracker, May 2025. https://www.healthsystemtracker.org/brief/the-performance-of-the-federal-independent-dispute-resolution-process-through-mid-2024/ ↩

8. Centers for Medicare & Medicaid Services, "Medicare Program Integrity Manual, Chapter 10 – Medicare Enrollment, Section 10.5: Timeliness and Accuracy Standards," CMS Internet-Only Manual (Rev. 13717), July 2026. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/pim83c10.pdf ↩

9. U.S. Code of Federal Regulations, "42 CFR § 424.520 – Effective date of Medicare billing privileges," Electronic Code of Federal Regulations, current text. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-424/subpart-P/section-424.520 ↩

10. U.S. Code of Federal Regulations, "45 CFR § 149.420 – Balance billing in cases of non-emergency services performed by nonparticipating providers at certain participating health care facilities," Electronic Code of Federal Regulations, current text. https://www.ecfr.gov/current/title-45/subtitle-A/subchapter-B/part-149/subpart-E/section-149.420 ↩