Device Reimbursement Blog

Welcome to META's Reimbursement blog. Our purpose is to provide an educational forum for busy medical device professionals.  On a daily basis, we monitor the Federal Register, CMS,  AMA, professional society and leading payer websites for announcements about medical device codes, coverage and/or reimbursement changes.  When we find something interesting, this forum provides us with an opportunity to share it with our colleagues.  Through the years, we've learned that knowledge is power!  In the coming year, we believe that coding and reimbursement will increasingly impact healthcare provider product purchasing decisions, as well as corporate business development decisions, especially those related to potential acquisitions.

What differentiates us from other reimbursement consultants?  We know how to translate policy into practical business solutions.  While we enjoy researching health policy, META is known for its ability to anticipate changes and incorporate them into our client's strategic reimbursement plans.  In the area of medical device coding, coverage and reimbursement, what you DON'T know can definitely hurt your business.  Through this blog, we want to share education and information about the complexities inherent to U.S. healthcare financing and delivery.  On a weekly basis, we will provide quick "heads-up" on new developments and hope that you will pose a question that probably others are also facing.  Together, we have the opportunity to exchange timely and accurate information.

PROPOSED Physician Fee Schedule Released (6/25/10)

Summary of Basic Facts:

• Released on http://www.cms.gov on Friday, June 25, 2010.
• Scheduled to be released in the Federal Register on July 13, 2010.
• Commentary period open until August 24, 2010.
• Final rule will be published in November 2010.
• Final CY 2011 Physician Fee Schedule will become effective January 1, 2011.
• The proposed CY2011 Conversion Factor = $26.6574.
  • This is a proposed -6.1% reduction under the Sustainable Growth Rate (SGR) formula that has been averted by legislative action since CY2003.
  • This will change! Stay tuned, heated debate and controversy will continue.
• The majority of this 1,250 page proposed rule explains how the CY2011 Physician Work, Practice Expense & Malpractice Relative Value Units (RVUs) were determined:
  • For the surgical CPT codes we routinely monitor in cardiac, orthopedic, neurosurgery, GYN and Urology, the Physician Work RVUs are unchanged; BUT the Practice Expense & Malpractice RVUs are higher across the board. (For example)
  • Radiology is taking the hardest hit with an overall -12% reduction.
  • Primary care is seeing an increase in reimbursement.
• Overall "winners" Primary Care & Surgeons in underserved areas:
  • CMS proposes 10% incentive payment to primary care practitioners for primary care services furnished on or after January 1, 2011 and before January 1, 2016.
  • 10% incentive payment program for major surgical procedures furnished in health professional shortage areas (HPSA) for services furnished on or after January 1, 2011 and before January 1, 2016.
• Overall "losers" include interventional radiology (-9%); radiology (-12%) and diagnostic testing facility (-20%) (Take a look at Table 73, page 679).

Specific Topics of Interest:

• There is a section entitled, "Revised Malpractice RVUs for Selected Disc Arthroplasty Services". The preamble begins on page 94 and concerns CPT 22856 Cervical Disc Arthroplasty.  In this CY2011 proposed rule, Physician Work RVUs remain 24.05; while the Practice Expense RVUs increase to 17.70 (from 15.31) and Malpractice RVUs increase to 7.56 (from 5.26).
• There is a lengthy preamble about "Potentially Misvalued Codes".  It begins on page 97.
  • Over the last several years, CMS, in conjunction with the AMA RUC, has identified and reviewed numerous potentially misvalued codes.  Since CY2009, CMS and AMA RUC have identified over 700 potentially misvalued codes.  In CY2009, CMS identified over 100 codes designated as the "fastest growth" (aka Table 25) and requested that the AMA RUC review the codes on this list.
  • Over the past 2 years, the CPT Editorial Panel has established new bundled codes to describe comprehensive services for certain combinations of these existing services that are commonly furnished together, and the AMA RUC has recommended work values and direct PE inputs to CMS for these comprehensive service codes that recognize the associated efficiencies.
  • Be aware - CMS and AMA RUC will continue to bundle common combinations.
• CMS is also examining shifts in site-of-service anomalies, as well as codes that qualify as "23-hour stay" outpatient services.
• Medicare proposes to create 2 new HCPCS G-codes for Apligraf and Dermagraft to report application of tissue-cultured skin substitutes applied to the lower extremities.
  • GXXX1 (Application of tissue cultured allogeneic skin substitute for dermal substitute; for use on lower limb, includes the site preparation and debridement, if performed; first 25 sq cm or less).
  • GXXX2 (Application of tissue cultured allogeneic skin or dermal substitute; for use on lower limb, includes the site preparation and debridement, if performed; each additional 25 sq cm).
  • These codes would not allow separate reporting of CPT codes for site preparation or debridement. CMS expects that these will be temporary codes, while stakeholders work through the usual channels to establish appropriate coding for these services that reflects the current common clinical scenarios in which the skin substitutes are applied.
• This proposed rule expands primary care and prevention incentives.  The following preventive services will be fully covered:
  • Pneumococcal, influenza, and hepatitis B vaccine and administration.
  • Screening mammography.
  • Screening pap smear and screening pelvic exam.
  • Prostate cancer screening tests.
  • Colorectal cancer screening tests.
  • Outpatient diabetes self-management training (DSMT).
  • Bone mass measurement.
  • Screening for glaucoma.
  • Medical nutrition therapy (MNT) services.
  • Cardiovascular screening blood tests.
  • Diabetes screening tests.
  • Ultrasound screening for abdominal aortic aneurysm (AAA).
  • Additional preventive services will be identified for coverage through the national coverage determination (NCD) process.
• There are new disclosure requirements for MRI, CT, and PET services.
• New incentive payment adjustments for Quality Reporting and electronic prescribing.

Upon review, please do not hesitate to call (203) 271-3366 or email me for additional information.

Posted by Kathryn Barry on June 30, 2010 at 11:31am
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Medicare Proposes FY2011 Inpatient Payments for Acute Care Hospitals (5/13/10)

Medicare's FY2011 Inpatient Prospective Payment System (IPPS) proposed rule was released on Medicare's website on March 19, 2010 and published in the Federal Register on May 4, 2010.  The attached worksheet specifies Medicare's proposed FY2011 national average payments for a range of spinal procedures, effective October 1, 2010.  Upon close review, you will see...  

• Slight increase in Spinal Procedure, Lumbar Spinal fusion, Cervical Spinal Fusion, Vertebral Augmentation and Back/Neck Procedure MS-DRGs.
• Proposed lower average length of stay.
• Proposed higher Weight per MS-DRG, due to hospital's coding and cost reporting practices.
• Proposed lower Base Rate to off-set this up-coding practice.
• Bottomline, hospital reimbursement is proposed to be slightly higher to hospitals performing these spinal procedures in FY2011.

This is good news, in view of the following policy decisions proposed by CMS to take effect on October 1, 2010:

• Estimated $142 million decrease in FY011 operating payments (or -0.1% increase) and an estimated $20 million decrease in FY2011 capital payments (or -0.2% change).
• CMS operating impact estimate includes the proposed -2.9% documentation and coding adjustment applied to the hospital-specific rates.
• Therefore, CMS is proposing to reduce the national standardized amount for IPPS hospitals by 2.9% in FY2011, with additional reductions in subsequent years.
• Bottomline:  CMS believes it has overpaid hospitals under the MS-DRG system, with hospitals "upcoding" patient severity of illness, in order to obtain a higher MS-DRG assignment.
• Also in this rule, CMS continues to acknowledge the problem of "charge compression" for high-priced supplies, but does not offer a tangible solution.

In terms of specific spine devices, there is only one issue - it relates to Zimmer's request to move Dynesys out of the Back & Neck MS-DRG 490 and into the higher paying spinal fusion MS-DRG 460.  Medicare proposes NOT to reassign Dynesys cases, because "insertion of a Dynesys Dynamic Stablization System is not clinically a lumbar spinal fusion".  There is nothing else about any other minimally invasive spine technology in this rule.

There is much more that could be shared from this lengthy proposed rule!  From a health policy perspective, please note, at the close of this proposed rule, CMS states that due to the timing of the healthcare reform bill enacted on March 23, 2010, this proposed IPPS rule does NOT reflect the proposed policies and payment rates from this new legislation.  CMS indicates it plans to issue separate documents at a later date.

For additional information and personal discussion about how this proposed rule may impact your sales process in the coming year, please call META today at (203) 271-3366.

Posted by Kathryn Barry on May 13, 2010 at 06:45am
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LAST CALL! FY2011 ICD-9 Addenda Comments Due November 20, 2009

If you work for a cardiac ablation or spinal fusion medical device company, then you should review Medicare's proposed FY2011 Addenda.  Significant revisions are proposed to become effective on October 1, 2010.  They include:  

1. "Excision or destruction of other lesion or tissue of heart, open approach, that by median sternotomy" (37.33). The proposed change seeks to revise the inclusion term associated with "modified maze procedure, transthoracic approach" to be deleted from 37.33 and added to "excision or destruction of other lesions or tissue of heart, other approach (37.34).  This proposed revision would require hospitals to report endovascular and thoracoscopic (endoscopic) approaches with the same ICD-9-CM Procedure code (37.34).

2. Spinal fusion (81.0). Several new inclusion terms are proposed for "lumbar and lumbosacral fusion of the anterior column" (81.06).  New inclusion terms concern DLIF, XLIF, retroperitoneal and transperitoneal techniques.

Do these changes make sense clinically?  When reviewing the proposed changes, ask yourself, "Are these proposed changes clinically relevant?  Are they in step with current clinical practice?  Will it help hospitals better report the surgical service rendered to the patient?" Do you agree or disagree with the proposed revisions?  If you have an opinion regarding the clinical cohesiveness of the proposed FY2011 Addenda, then please send an email to marilu.hue@cms.hhs.gov by end-of-business, Friday, November 20, 2009.

Posted by Kathryn Barry on November 19, 2009 at 07:15am
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Nothing is as Constant as Change!

Nothing is as constant as change, especially at this time of year in the world of coding and reimbursement.  For example, are you aware of the following new developments?

-  Physician Coding:  The American Medical Association's CPT 2010 coding manual was shipped to healthcare providers in October. It contains all the new, revised and deleted Level I codes; Category II (performance measurement) codes and Category III (T codes for emerging technology, services and procedures) that become effective on January 1, 2010. Now is the time to become familiar with any changes related to procedures that may involve your products.

-  Physician Reimbursement:  On October 30, 2009, CMS posted its payment and policy changes for the 2010 Physician Fee Schedule on its website.  A copy of this final rule is expected to appear in the Federal Register on November 25, 2009. Due to the required application of the Sustainable Growth Rate (SGR) that was adopted by the Balanced Budget Act of 1997, the 2010 conversion factor will be (- 21.2%).  This means the conversion factor will decrease from $36.0666 to $28.4061 on January 1, 2010. This is a dramatic reduction in overall physician reimbursement. Hopefully, Congress will intercede in the coming months.  Unfortunately, it was not remedied by the recent Senate debate and not addressed when the House voted to pass healthcare reform on November 7, 2009. If this conversion factor is not changed, many more physicians will refuse to take care of Medicare patients. Other issues in the final 2010 Physician Fee Schedule include an explanation of Medicare's new methodology to determine Practice Expense (PE) Relative Value Units (RVUs); payment for Anesthesia Services furnished by CRNAs; and of interest to those of you involved in knee arthroscopy, CMS accepted the AMA RUC's recommendation to include Practice Expense inputs for knee arthroscopy (CPT 29870) in the non-facility setting.

-  Hospital Inpatient Reimbursement: For discharges occurring on or after October 1, 2009, acute care hospitals are now receiving reimbursements under Medicare's Fiscal Year 2010 MS-DRG payment rates. The final Inpatient Prospective Payment System (IPPS) rule was published in the Federal Register on August 27, 2009. Effective October 1, 2009, Medicare provided hospitals with a 2.1% inflation update, or an additional $1.9 billion over FY2009.

-  Hospital Outpatient & ASC Reimbursement: Also on October 30, 2009, Medicare posted its payment rate changes for Hospital Outpatient departments (HOPPS) on its website. This final rule is expected to be published in the Federal Register on November 20, 2009. Effective January 1, 2010, most hospitals will receive an inflation update of 2.1% in their payment rates for services provided to Medicare patients in their outpatient departments and 1.2% inflation update for services provided in their ambulatory surgery centers. For those with products used in the outpatient setting, you may want to skim the attached final rule. 

-  FY2011 Proposed ICD-9-CM Procedure Code Changes: It is never too early to consider how future coding changes may impact your product business. If you are involved with a cardiac or spine device company, then you should review the proposed code revisions discussed at the September 16-17, 2009 ICD-9-CM Coordination and Maintenance Committee meeting. Please see pages 26-30 of the attached meeting minutes to appreciate the proposed ICD-9-CM coding changes for implementation on October 1, 2010. CMS is accepting comments about these proposed changes until November 20, 2009.

Why is this at all important to busy medical device sales and marketing professionals?  Simple, these coding and reimbursement changes will impact your customers' decision-making processes in 2010.  We hope you'll use this forum to pose a question and/or share a valuable lesson learned. We look forward to hearing from you.

Posted by Kathryn Barry on November 16, 2009 at 10:24am
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