Impacting Your Medical Costs Through Multiple Procedure Reductions by Cynthia Freese, RN, CPC and Linda Myrick, CPC, United Claim Solutions

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1 Impacting Your Medical Costs Through Multiple Procedure Reductions by Cynthia Freese, RN, CPC and Linda Myrick, CPC, United Claim Solutions This article originally appeared in United Claim Solution s 3rd Quarter 2014 edition of Healthcare Savings Quarterly T he cost of medical services fluctuates from year to year. The leaders in healthcare cost containment, the Secretary of Health and Human Services and the Centers for Medicare & Medicaid Services (CMS) review the payment policies and procedures looking for reasonable and acceptable ways to cut the cost and payment for medical services provided by both providers and facilities. One of the many cost savings efforts that is in effect and has been adjusted over the years is to apply a Multiple Procedure 18 September 2014 The Self-Insurer Payment Reduction (MPPR) to services provided by the same provider to the same patient on the same date of service. Once implemented by CMS the reduction is applied to services such as and not limited to, surgeries, behavioral health, therapy and diagnostic services. In most cases the services are reduced to at least 50% of the current Medicare Fee Schedule allowable for that service. In the case of therapy services the reduction applies to the practice expense component of the relative value unit (RVU) for services provided in both the outpatient and provider office setting. With more and more insurance carriers choosing to follow CMS Reimbursement Rules and Claims Processing Guidelines, providers will start seeing these reductions across the board with all claims payments. Multiple procedure reductions are a growing standard in medical bill payment and are guided by the regulations dictated by CMS. The multiple procedure reductions regulations have been expanded over the years in many ways, most recognized is due to the Affordable Care Act (aka Obamacare) and American Taxpayer Relief Act. As a result, Section 633 of the American Taxpayer Relief Act of 2012 revised the reduction to 50 percent for all settings. MPPR was first implemented in 2006 by CMS. A 25% cut was applied to the technical component (TC) of Self-Insurers Publishing Corp. All rights reserved.

2 imaging studies performed on the same patient, on the same day. This policy was revised several times in the following years. In 2011, CMS changed the MPPR to include non-contiguous body parts, across different modalities. In 2012 CMS used additional regulations to expand the MPPR to include a 25% cut to the professional component (PC) as well. In 2013, CMS further expanded the MPPR to include multiple physicians taking care of the same patient, on the same day. The enactment of Medicare Physician Fee Schedule Regulations expanded the scope of the MPPR so it affected certain cardiology and ophthalmology procedures. A methodology that most providers and payers are familiar with and follow are multiple surgery reductions. When multiple surgeries are performed together, many of the services like the surgical approach and closure and pre- and postoperative care, etc. are already considered in the primary procedure s payment. Therefore, the second, third etc... Surgical procedures performed in the same session will be allowed at 50% of the fee scheduled for that procedure. Leaving the primary procedure (Service with the highest RVU) being paid at 100% of the fee schedule. Example The physician performs multiple shaving of epidermal lesion one lesion at 0.5 CM and another at 0.6 CM; the correct codes are CPT and Code has an RVU of 2.68 and an allowable of $96.01, code has an RVU of 3.30 and an allowable of $ In this case, the payer should reimburse the highest valued code at its full value and pay code at 50 percent of the allowable, [70 x 0.5] = 135. Diagnostic imaging services have special rules for the technical component (TC) if procedure is billed with another diagnostic imaging procedure in the same family. If the diagnostic service is performed in the same visit on the same day as another procedure with the same family indicator, the payer should pay 100% for the highest priced procedure, and 50% for each subsequent procedure. The professional component (PC) is paid at 100% for all procedures. Below are 2 examples of diagnostic families. If there is only one service from each family then each service would be allowed at 100% of the fee schedule. Family 8 MRI and MRA (lower extremities) MRI lower extremity w/o dye MRI lower extremity w/dye MRI lower extremity w/ & w/o dye MRI joint of lower extremity w/o dye MRI joint of lower extremity w/dye MRI joint of lower extremity w/o & w/dye MR Angio lower extremity w or w/o dye Family 9 CT and CTA (lower extremities) CT lower extremity w/o dye CT lower extremity w/dye CT lower extremity w/o & w/dye CT Angio lower extremity w/o & w/dye Endoscopic procedures reductions can be more complex; the calculation requires that reimbursement for the base procedure is subtracted from all endoscopic procedure(s) performed on that date except for the procedure with the highest fee schedule allowed amount. This applies when two or more to services that are performed on the same patient by the same provider in the same session and that fall into the same CPT Code family. (i.e., another endoscopy that has the same base procedure) If the services are not within the same family then standard multiple surgery reduction applies. Example When calculating endoscopic procedures you need the allowables of all codes including the base procedure. CPT codes and both have a base endoscopy code of CPT Code Allowable $ $ (Base) $ The calculation is as follows: Code has the highest fee schedule amount; the full fee schedule amount is used to determine reimbursement. Base procedure: CPT code = $ ($ $ = $92.34) Per Medicare Guidelines if an endoscopic procedure is reported with only its base procedure, do not pay separately for the base procedure. Payment for the base procedure is included in the payment for the other endoscopy. On another note: diagnostic scopes are always included in surgical scope even if the diagnostic scope is not a part of the same code family as the surgical scope. Self-Insurers Publishing Corp. All rights reserved. The Self-Insurer September

3 Therapy services are reduced at a per unit of service provided at the Practice Expense (PE) portion of the RVU for select therapy services. Effective for claims with dates of service April 1, 2013, and after, Section 633 of the American Taxpayer Relief Act of 2012 revised the reduction to 50 percent for all settings. This reduction applies to a specific list of Physical Therapy (PT), Occupational Therapy (OT), or Speech-Language Pathology (SLP) codes. Professional claims have a value of 5 on the Medicare Fee Schedule Database (MFSDB). Institutional claims have a value of 5 on the therapy abstract file. Note that these services are paid with a non-facility PE. The current and revised payments are shown in the example in the following table provided on the CMS website: Sample Payment Calculation from Medicare ( Procedure #1 Unit 1 Procedure #1 Unit 2 Procedure #2 Total Current Payment Revised Total Revised Payment Calculation Work $7.00 $7.00 $11.00 $25.00 $25.00 No Reduction PE $10.00 $10.00 $8.00 $23.50 $19.00 $10 + (.50 x $10) + (.50 x $8) MP $1.00 $1.00 $1.00 $3.00 $3.00 No Reduction Total $18.00 $18.00 $20.00 $51.50 $47.00 $18 + ($18-$10) + (.50 x $10) + ($20-$8)+(.50 x $8) Due to the complexity of the reduction determination of the PE Allowable, most carriers have a set rate reduction to apply to these services, (at payor discretion) anywhere from 80/20 or 100/50 for the primary and secondary services. The calculation reduction from Medicare can range anywhere from 18.5% to 50% of the allowable. Diagnostic Cardiovascular and Ophthalmology Procedures have multiple procedure payment reduction applied on the Technical Component (TC). Cardiovascular Services, full payment is made for the TC service with the highest payment, then at 75% for subsequent TC services furnished by the same physician (or by multiple physicians in the same group practice, i.e., same Group National Provider Identifier (NPI)) to the same patient on the same day. Ophthalmology Services, full payment is made for the TC service with the highest payment then at 80 percent for subsequent TC services furnished by the same physician (or by 20 September 2014 The Self-Insurer Self-Insurers Publishing Corp. All rights reserved.

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6 multiple physicians in the same group practice, i.e., same Group NPI) to the same patient on the same day. The MPPRs do not apply to professional component (PC) services. The complete lists of codes subject to the MPPRs on diagnostic cardiovascular and ophthalmology procedures are in Attachments 1 and 2 of CR7848 respectively.cr7848 is available at Downloads/R1149OTN.pdf on the Centers for Medicare & Medicaid Services (CMS) website. CMS also designed the Correct Coding Initiative (CCI) to promote national correct coding methodologies and to control improper coding. The CCI lists thousands of code combinations that you should not, report together during the same patient encounter. The CCI edits should be applied to all services on the same date of service by the same provider, before applying the MPPR guidelines. Providers should never receive reduced payment for separately identifiable evaluation and management services provided on the same day as other procedures/services, procedures designated by CPT as add-on codes and procedure designated by CPT as Modifier 51 exempt. The RVU s for these codes already consider them as separate. In Conclusion, there have been many changes to the MPPR methodology in recent years. It is anticipated that changes will continue. Providers, who may have billed in the past and are not familiar with the current regulations, may perceive applied reductions as incorrect payments as many payors both federal and nonfederal are adopting and following Medicare guidelines. n Cynthia Freese is the Director of Claim Audits for United Claim Solutions (UCS). She has over 10 years audit experience in the Medicare, Medicaid and Commercial markets. UCS is a Claims Flow Management and Medical Cost Reduction company located in Phoenix, AZ. Cynthia can be reached at cfreese@unitedclaim.com. Linda Myrick is the Claims Editing and Special Projects Manager for United Claim Solutions. She has over 15 years experience in medical coding principles and guidelines, including the ability to read and interpret notes and charts and assign appropriate diagnostic and procedural codes. Linda can be reached at lmyrick@untedclaim.com References Dental Powered by Innovation The power to cut costs in the palm of your hands At Revolv, just enough...is just not good enough! We are a dental benefits administrator supporting carriers, TPA s and self-funded groups by providing Real-Time dental only claims processing and award-winning customer service and robust management tools all focused on reducing costs while improving service to your members. Secure online portal to check claims status, estimate costs and view complete benefit information Robust reporting to maximize costs containment and assist with benefit plan design Network selection/stacking and streamlined implementation Learn more today! tellmemore@myrevolv.com myrevolv.com Self-Insurers Publishing Corp. All rights reserved. The Self-Insurer September