Anesthesiologists submit charges that are 15.6 times what Medicare actually pays — the highest markup ratio among all major medical specialties. Combined, anesthesia-related providers charged $12.5B but received only $1.2B.
When you go under the knife, the anesthesiologist keeps you alive and pain-free. It's arguably the most critical role in the operating room. But the billing practices of anesthesia providers reveal something startling: they routinely charge Medicare more than 15 times what the program actually pays.
This isn't fraud — it's the system working as designed. Medicare sets its own fee schedule, and providers are free to set their "list prices" (submitted charges) at whatever level they choose. The gap between charges and payments — the markup ratio — reveals which specialties have the most inflated price tags.
Our analysis of 34.2K anesthesiologists billing Medicare reveals a specialty where submitted charges bear almost no relationship to actual reimbursement, and where the gap has profound implications for uninsured patients and those with out-of-network coverage.
The Markup Landscape: Who Charges the Most?
Across all of Medicare, the average markup ratio is roughly 3.96x — providers charge about four times what they actually receive. But anesthesia-related specialties occupy four of the top six spots in our markup rankings, forming a cluster of extreme pricing that far exceeds any other area of medicine.
While Pharmacy tops the list at 22.45x, it represents a relatively small pool of just 3.0K providers. Anesthesiology, with 34.2K providers and nearly $8.2B in submitted charges, is the largest specialty with a double-digit markup ratio.
Top 10 Highest-Markup Medical Specialties
Ratio of submitted charges to Medicare payments (2014–2023 cumulative)
#
Specialty
Markup Ratio
Submitted Charges
Medicare Paid
Providers
1
Pharmacy
22.4x
$630.1M
$432.0M
3.0K
2
Anesthesiology
15.6x
$8.2B
$787.8M
34.2K
3
Interventional Pain Management
15.0x
$1.5B
$276.4M
1.5K
4
Anesthesiology Assistant
14.7x
$127.8M
$8.8M
2.2K
5
CRNA (Nurse Anesthetist)
13.2x
$4.3B
$371.5M
38.4K
6
Pain Management
12.9x
$2.2B
$387.8M
2.7K
7
Radiation Therapy Center
11.6x
$234.1M
$26.6M
25
8
Independent Diagnostic Testing Facility
11.3x
$5.6B
$881.3M
1.9K
9
Ambulatory Surgical Center
10.3x
$26.5B
$4.3B
5.4K
10
Pulmonary Disease
10.0x
$3.4B
$991.2M
10.4K
The Anesthesia Ecosystem: A $1.2 Billion Machine
The anesthesia markup story isn't limited to anesthesiologists themselves. The entire anesthesia ecosystem — including Certified Registered Nurse Anesthetists (CRNAs), anesthesiology assistants, and pain management specialists — follows the same pattern of extreme markups.
The Anesthesia Billing Family
Anesthesiologists
15.6x markup
34.2K providers · $787.8M paid
CRNAs (Nurse Anesthetists)
13.2x markup
38.4K providers · $371.5M paid
Anesthesiology Assistants
14.7x markup
2.2K providers · $8.8M paid
Pain Management
12.9x markup
2.7K providers · $387.8M paid
Together, these four anesthesia-related specialties account for more than 77.4K providers who submitted $14.7B in charges but received just $1.6B — an effective combined markup of roughly 14x.
Why Are Anesthesia Markups So High?
Several factors contribute to the extreme disconnect between anesthesia charges and payments:
1. Time-Based Billing Units
Anesthesia uses a unique unit-based billing system where charges are calculated using base units plus time units. This creates a compound effect where the "list price" per unit can be inflated far beyond the Medicare conversion factor. Medicare pays about $22 per unit, while anesthesiologists often set their charge per unit at $150–$350.
2. Out-of-Network Leverage
Anesthesiologists are among the most commonly out-of-network providers. Patients rarely choose their anesthesiologist — the surgeon does. This creates zero price competition and incentivizes high list prices that serve as starting points for out-of-network negotiations with private insurers.
3. Surprise Billing Dynamics
Before the No Surprises Act (2022), anesthesiologists could balance-bill patients for the difference between their charges and insurance payments. High submitted charges became a negotiating tactic, and the practice of setting inflated rates persists in the Medicare data even after regulatory changes.
4. Historical Inertia
Once a practice sets high charges, there's little incentive to lower them. Submitted charges are essentially wish-list prices — Medicare ignores them entirely when calculating payments. But private insurers and patients sometimes don't.
What Anesthesia Procedures Cost Medicare the Most
The most expensive anesthesia procedure in Medicare isn't for heart surgery or brain operations — it's for cataract removal. Anesthesia for lens surgery (code 00142) accounts for $1.5B in Medicare payments across 18.8M services, reflecting the enormous volume of cataract procedures performed on Medicare beneficiaries.
Top Anesthesia Procedure Codes by Medicare Payments
The Patient Impact: When Markups Become Real Bills
For Medicare beneficiaries, these inflated charges are largely invisible — Medicare pays what it pays, and patients owe their standard copay. But the ripple effects are real:
Uninsured patients may be billed at the full charge rate — 15.6x what Medicare considers reasonable — before any negotiation or charity care discount.
Medicare Advantage enrollees may face higher cost-sharing when out-of-network anesthesiologists bill at inflated rates.
Private insurance premiums are influenced by provider charge levels, as insurers often negotiate rates as a percentage of submitted charges.
Hospital pricing transparency becomes meaningless when the anesthesiology component has a 15x disconnect from actual costs.
How Anesthesia Compares to Other Specialties
To put the 15.6x markup in perspective: Internal Medicine — the largest Medicare specialty with 917.6K providers and $77.0B in payments — has a markup ratio of roughly 3.5x. Ophthalmology, the second-largest specialty at $66.3B in payments, operates at about 3.8x.
Even Emergency Medicine, another specialty known for surprise billing issues, has a markup of 8.7x — high, but barely more than half the anesthesia markup. The anesthesia ecosystem stands alone in the extremity of its pricing disconnect.
By the Numbers
15.6x
Anesthesiology markup
3.96x
Overall Medicare average
34.2K
Anesthesiologists billing
$8.2B
Total charges submitted
Why This Matters
The anesthesia markup story illustrates a fundamental dysfunction in American healthcare pricing. When providers can set charges at 15 times what the government considers a fair price, the concept of a "price" in healthcare becomes meaningless for consumers.
The No Surprises Act has begun to address the worst abuses, but it doesn't change the underlying incentive structure that produces these markups. As long as submitted charges serve as anchors in private insurance negotiations, providers have every reason to keep them inflated.
Real price transparency in anesthesia would mean publishing the actual negotiated rates with each insurer — not the fantasy charges that bear no relationship to what anyone actually pays. Until that happens, the 15.6x markup will remain a monument to healthcare's broken pricing system.
Methodology
This analysis uses the CMS Medicare Provider Utilization and Payment Data for 2014–2023. Markup ratios are calculated as the average ratio of submitted charges to Medicare allowed amounts across all providers within each specialty. Only specialties with meaningful provider counts are highlighted. Individual provider-level data is aggregated from the public use files available at data.cms.gov.