Medicare Reimbursement 2008

Is the glass half full or half empty?

BY DONNA M. McCUNE, CCS-P, COE, AND KEVIN J. CORCORAN, COE, CPC, FNAO

As you begin assimilating the practice management changes for 2008, you may find yourself asking whether your glass is half full or half empty when it comes to reimbursement. However, the answer is unclear due to changes in the Medicare fee schedules, evolving practice patterns, inauguration of new codes and renewal of the Physician Quality Reporting Initiative (PQRI) program. This article will outline many practice management challenges and opportunities for 2008.

Practice Patterns

The past several years have revealed growth in the number of Medicare beneficiaries and increasing physician services. We expect continued growth in 2008. Here, we highlight some of the most significant shifts in practice patterns for ophthalmologists based on data contained in the Part B Extract Summary System (BESS) published by the Centers for Medicare and Medicaid Services (CMS) for services rendered in 2005 and 2006. (Data for 2007 is not yet available.) Increases in the nonsurgical aspect involve diagnostic testing.

The utilization rates of the following tests increased between 2005 and 2006:

► ultrasound biomicroscopy (UBM, 76513) +220%

► scanning computerized ophthalmic diagnostic imaging (SCODI, 92135) (insert arrow) +28%

► optical coherence biometry (OCB, 92136) +19%

► extended ophthalmoscopy +9%

The utilization rates of the following nonsurgical services decreased between 2005 and 2006:

► glaucoma screening (G0117) -45%

► evaluation and management (E/M) exam (99204) -25%

► pachymetry (76514) -19%

► A-scan biometry (76519) -12%

► E/M exam (99212) -8%

The utilization rates of the following surgical services increased dramatically between 2005 and 2006:

► intravitreal injection (67028) +111%

► probe NLD (68810) +43%

► probe LC (68840) +40%

► dilate punctum (68801) +35%

► complex cataract surgery (66982) +25%

► punctum plugs (68761) +13%

► ptosis surgery (67904) +13%

The utilization of a few surgical procedures declined:

► photodynamic therapy (PDT, 67221) -61%

► laser choroid (67220) -30%

► focal laser (67210) -9%

It is interesting to note that the services that increased utilization, both medical and surgical, most often occur in the office and not the OR. Thus, ophthalmologists will find that the time they spend in the office continues to be very productive and often yields a higher return financially.

Medicare Physician Fee Schedule

On Dec. 18, Congress passed legislation, which the President has signed, which postpones the 10% reduction in Medicare physician fees for 6 months and replaces it with a 0.5% positive update to the 2007 conversion factor. As is their custom, Congress made no changes to the relative value units (RVUs) that were published in the November 2007 announcement of the Medicare Physician Fee Schedule. This is welcome respite to be followed by an anticipated longer term "fix" next year of the faulty sustainable growth rate (SGR) formula.

In addition to the improvement in Medicare payment rates to physicians, the Medicare, Medicaid and the State Children's Health Insurance Program (SCHIP) Extension Act of 2007 maintains the work Geographic Practice Cost Index (GPCI) at a minimum of 1.0 through June 30, 2008. This benefits those locales where it had dropped below 1.0 in the November publication. Likewise, the physician scarcity area (PSA) bonus program due to expire Dec. 31, 2007 remains in effect through June 30, 2008. Lastly, the PQRI program continues to be funded in 2008 and remains voluntary.

Hospital Reimbursement

Once again, hospital outpatient department (HOPD) reimbursement grew year over year. Table 1 shows facility reimbursement changes over the past 3 years.

Medicare: ASC Payment Reform

The Medicare Modernization Act of 2003 (MMA) required a new ambulatory surgery centers (ASC) payment system by Jan. 1, 2008. In November 2007, the CMS published its final rule, along with definitive payment rates, for a new ASC payment system. The new payment system, effective January 2008, will dramatically alter how Medicare pays ASCs. The highlights of this significant regulatory change are itemized below:

► change from 9 payment groups to approximately 220 ambulatory payment classifications (APCs)

► significantly expand the list of eligible procedures performed in an ASC

► link ASC payment rates to hospital outpatient department (HOPD) reimbursement rates

► ASC rates paid at about 65% of the HOPD rates

► 4-year transition period beginning in January 2008

► office-based procedures performed in the ASC will be paid at the lesser of the ASC rate or the MPFS non-facility practice amount

► corneal tissue continues to be paid at reasonable cost; most other supplies and devices are bundled into the facility payment

► new-technology IOL payment policy is unchanged

► modifier SG retired

► add modifier 52 for reduced procedures not needing anesthesia

► unlisted codes remain ineligible for ASC reimbursement

► category III CPT codes evaluated for payment eligibility on an individual basis.

Table 2 shows CMS' new payment system provides 2008 ASC facility reimbursements of:

CMS expects an increased volume of services provided in ASCs and believes that quality standards need strengthening. To do so, CMS proposed a number of new regulations as part of the conditions for coverage in ASCs including:

► admission and pre-surgical assessment standard

► expanded Quality Assessment and Performance Improvement (QAPI)

► board oversight of QAPI

► new disaster preparedness

► new patient's rights

► expanded infection control

► new radiology requirements.

Additional information about the new payment system and the proposed quality standards can be found on the CMS Web site.

Coding Update

The 2008 coding manuals contain many new codes, revised codes and deleted codes applicable to ophthalmic practices. These updates require revisions to your computer systems, superbills and education of physicians and staff.

Coding changes include:

■ 67113. Repair of complex retinal detachment (e.g., proliferative vitreoretinopathy, stage C-1 or greater, diabetic traction retinal detachment, retinopathy of prematurity, retinal tear of greater than 90°) with vitrectomy and membrane peeling; may include air, gas or silicone oil tamponade, cryotherapy, endolaser photocoagulation, drainage of subretinal fluid, scleral buckling and/or removal of lens.

■ 67041. Vitrectomy, mechanical, pars plana approach; with removal of preretinal cellular membrane (e.g., macular pucker).

■ 67042. Vitrectomy, mechanical, pars plana approach; with removal of internal limiting membrane of retina (e.g., for repair of macular hole, diabetic macular edema), includes, if performed, intraocular tamponade (i.e., air, gas or silicone oil).

■ 67043. Vitrectomy, mechanical, pars plana approach; with removal of subretinal membrane (e.g., choroidal neovascularization), includes, if performed, intraocular tamponade (i.e., air, gas or silicone oil) and laser photocoagulation.

■ CPT code 67038. Vitrectomy, mechanical, pars plana approach; with epiretinal membrane stripping, has been deleted. The new code 67113 replaces the combination of 67108 and 67038.

Additionally, there is a new code to describe laser treatment for retinopathy of prematurity (ROP) and a new code in the lacrimal system section of CPT:

■ 67229. Treatment of extensive or progressive retinopathy, one or more sessions; preterm infant (less than 37 weeks gestation at birth), performed from birth up to 1 year of age (e.g., retinopathy of prematurity), photocoagulation or cryotherapy.

■ 68816. Probing of nasolacrimal duct, with or without irrigation; with transluminal balloon catheter dilation.

As counterpoint to the new "anterior segment" code (0187T), the words "posterior segment" were added to CPT code 92135, which now reads: Scanning computerized ophthalmic diagnostic imaging, posterior segment, (e.g. scanning laser) with interpretation and report, unilateral.

Previously published as a category III code (0065T), 99174 ocular photoscreening with interpretation and report, bilateral debuts in 2008 as a category I CPT code. (Few carriers cover screening services.)

The series of codes eligible for the add-on procedure 66990, use of ophthalmic endoscope, increases in 2008. The add-on code (+) may now be appended to the following series of surgical codes: 65820, 65875, 65920, 66985, 66986, 67036, 67039, 67040, 67041, 67042, 67043 and 67112.

Released semiannually by the American Medical Association (AMA), a series of new Category III codes implemented on Jan. 1, 2007 appear in the hardcopy CPT 2008.

They include:

■ 0173T. Monitoring of intraocular pressure during vitrectomy.

■ 0176T. Transluminal dilation of aqueous outflow canal; without retention of device or stent.

■ 0177T. Transluminal dilation of aqueous outflow canal with retention of device or stent.

■ 0181T. Corneal hysteresis determination, by air impulse stimulation, bilateral, with interpretation and report (implemented July 1, 2007).

One revised and two new Category III codes implement on Jan. 1, 2008 but will not appear in the published CPT handbook until 2009:

■ (revised) 0124T. Conjunctival incision with posterior extrascleral placement of pharmacological agent (does not include supply of medication) (for suprachorodial delivery of pharmacologic agent, use 0186T).

■ 0186T. Suprachoroidal delivery of pharmacologic agent (does not include supply of medication).

■ 0187T. Scanning computerized ophthalmic diagnostic imaging, anterior segment with interpretation and report, unilateral.

We expect additional ophthalmic Category III codes to be published by the AMA in mid-2008 describing new technology, services and procedures. Coverage and payment for Category III codes remains at carrier discretion.

New ICD-9 codes appear in the 2008 manual but were effective October 2007. They are:

► 364.81 — Floppy iris syndrome

► 364.89 — Other disorders of iris and ciliary body.

Ranibizumab 0.1 mg (Lucentis, Genentech) receives a unique HCPCS code effective Jan. 1, 2008: J2778. Because the drug is delivered in 0.5 mg single-use vials, the claim form must indicate five units for appropriate payment amounts.

Although not reimbursed by Medicare, a new HCPCS code exists to describe the astigmatism correction function of an IOL – V2787. Previously, the V2788 code was being used for both the presbyopia and astigmatism correcting function of an IOL.

Several modifier changes take effect Jan. 1, 2008. The descriptions for modifiers 22, 59 and 78 are revised. The revisions provide further detail for appropriate use and do not change their effect on reimbursement. In July 2007, the HCPCS modifiers GY and KX were revised — commercial payers should now recognize the GY modifier.

Regulatory Concerns/Medicare Beneficiaries' Obligation

CMS reports that the rate of overpayments has dropped significantly since 2003, with little change from 2006 to 2007. This, however, does not mean that they will stop scrutinizing claims. The Office of Inspector General (OIG) 2008 Work Plan is a projection of the various projects to be addressed during the fiscal year by the Office of Audit Services, Office of Evaluation and Inspections, Office of Investigations and Office of Counsel to the Inspector General. Ophthalmologists will continue to see the following areas scrutinized:

► evaluation and management services during the global period

► place of service errors

► "incident to" services.

New areas of scrutiny include:

► reassignment of benefits

► adherence to assignment rules.

Beneficiaries once again will see an increase to their monthly Part B Medicare premiums and an increase to their annual deductible. The Part B deductible increases for the fourth consecutive year to $135.

PQRI

Specialty societies questioned the viability and utility of keeping the PQRI in 2008. The societies asked CMS to use the 2008 PQRI funds to offset the anticipated physician fee reduction, however, CMS rejected this request. The PQRI program follows the same protocol as 2007 but covers a full year of services (January to December 2008). Expected bonus payments would be approximately 1.5% of a participants allowed charges, not to exceed 2%. The program continues to be voluntary.

For ophthalmology, some notable changes exist. The three cataract measures and one age-related macular degeneration measure were dropped from the 2008 program. The remaining measures applicable in 2008 are:

► Primary Open Angle Glaucoma: Optic Nerve Evaluation

► Age-Related Macular Degeneration: Dilated Macular Examination

► Diabetic Retinopathy: Documentation of Presence or Absence of Macular Edema and Level of Severity of Retinopathy

► Diabetic Retinopathy: Communication with the Physician Managing Ongoing Diabetes Care

► (New) Dilated Eye Exam in Diabetic Patient.

Results of the 2007 program are still unknown at this time.

The Bottom Line

In summary, the Medicare fee schedule reflects the increase in office-based and outpatient hospital procedures; RVUs remain static, PRQI remains voluntary and a whole host of new procedures have been added to Medicare's list of reimbursable procedures for ASCs. So, is your glass half full or half empty? There is a good case for optimism. OM

Kevin J. Corcoran, COE, CPC, FNAO, is president and co-owner of Corcoran Consulting Group in Southern California. E-mail him at kcorcoran@corcoranccg.com. Donna M. McCune, CCS-P, COE, is vice president of CCG.