April 2002 Bulletin

Frequently asked coding questions

Bundling Issues, New HCPCS codes and Q codes

By Margie S. Vaught, CPC, CCS-P, MCS-P


Our office has recently noticed that when we bill 29877 done in a different compartment with 29881, we are getting denied. Apparently in the new CCI version 8.0 they have included 29877 as a component of 29881 and will not allow a modifier for reimbursement. This goes against the AAOS Global Service Data book. Can anything be done?


You are correct that in the 8.0 CCI updated version, which is in effect from January 1, 2002 to March 31, 2002, CMS has bundled the Chondroplasty 29877 along with the Meniscectomy code 29881 and has given this bundling edit a status indicator of ‘0’ meaning that even with a modifier such as —59 the claim will not be reimbursed. In checking with CMS, they have clarified that indeed this was an error and the bundling edit will be updated in the 8.1 CCI update to come out effective April 1, 2002 with a status indicator of ‘1’ meaning that billing can take place if these procedures are indeed separate and distinct.

The AAOS has stated in the Complete Global Service Data book that billing should take place for a chondroplasty as long as it is performed in a different compartment. So if you are doing a medial meniscectomy and a lateral chondroplasty, separate billing should take place. CMS has indicated that this updated bundling edit will be retroactive to Jan 1, 2002. If this is indeed the case, your office will want to keep track of their denials and send in appeals come April for reimbursement of the chondroplasties.


We noticed that HCPCS code J7315 (sodium hyaluninate, 20 mg for intra- articular injection) was deleted for 2002, what is the appropriate code that we should be using for Hyalgan?


HCPCS added code J7316 - Sodium hyaluronate, 5mg for intra-articular injection (Biolon, Provisc, Vitrax, Hyalgan). Offices need to be aware that the dosage amount in this new HCPCS code has changed. Previously it was for 20mg however; this new HCPCS code represents 5mg. So if you are using 20mg of Hyalgan, you will need to place a ‘4’ in the units box for appropriate reimbursement.


On these Q codes, will they have a different fee or would you use the same fees as the A codes?


CMS has set a fee schedule for the Q codes, however offices have been sending letters in stating that these fees are very low. CMS figures reimbursement amounts by the "reasonable chart payment methodology" which sets an item at the lowest of the physician’s actual charge for that item, the physicians’ customary charge for the service, the prevailing charge in the locality for the item, or the inflation indexed charge (IIC). The IIC is the lowest of the customary charge, prevailing charge, or IIC from the previous year, updated by an inflation adjustment factor.

When there are no charges available such as with these new HCPCS codes, the amounts are "gap-filled" to set a fee. CMS has stated that for these Q codes they used information collected from contacting venders via the Internet for pricing. After 2003 the actual physician charge statistics will be available for use in calculating reasonable charge payment amounts. For this reason it is very important that offices figure their charges based on the actual cost incurred and not just ‘mark-up’ the fee schedule from CMS.

For further clarification regarding the Q codes, your office is encouraged to write to: Centers for Medicare and Medicaid Services, Center for Medicare Management, Chronic Care Policy Group, Mail Stop C5-06-27, 7500 Security Boulevard, Baltimore, MD 21244.

Margie S. Vaught, CPC, CCS-P, MCS-P, is an independent coding specialist in Ellensburg, Wash. She is also a member of the American Academy of Professional Coders’ National Advisory Board.

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