AAOS Bulletin - February, 2006

Shoulder Arthroscopy: Why the deep discount for multiple procedures?

By Margaret M. Maley, BSN, MS

One of the most common questions raised during the AAOS Mastering Orthopaedic Coding Courses relates to the deep discounts that payers apply to multiple-procedure arthroscopic shoulder surgery. Here’s a typical complaint:

“When we do multiple shoulder procedures arthroscopically, the payers do not pay us the way they should. We follow the proper steps:

Figure 1.

Figure 2

Figure 3

• The shoulder surgery is coded correctly according to the CPT guidelines.

• We double check the Relative Value Units (RVUs) in CODE-X and list the procedures in descending RVU order on the HCFA 1500 form.

• The procedures are linked properly to the correct diagnosis codes.

• We check to see that we do not separately report services that are listed as “included” in the AAOS Global Service Guide.

“Even so, we still are not paid correctly and severe discounts are taken.”

To find out why, you must first ask yourself if you know how the payer discounts multiple arthroscopic procedures. Here’s a specific example using Medicare 2006 RVUs to represent fees and reimbursement.

The surgeon does an arthroscopic rotator cuff repair, arthroscopic Mumford procedure and arthroscopic subacromial decompression. Figure 1 shows how these would be listed on the HCFA 1500.

If the payer is using the standard discounting rule of 100 percent for the first procedure and 50 percent for every additional allowable procedure up to five procedures, your expected reimbursement would be 47.20 RVUs, as shown in Figure 2.

But Medicare has a different rule for discounting endoscopic procedures. Medicare pays 100 percent of the allowable amount for the first arthroscopic procedure but does not pay the additional allowable procedures at 50 percent. Instead, Medicare takes the RVUs for the allowable procedure, subtracts the RVUs for the “base code in the family” and pays the remainder for the procedure.

In this case, the base code in the shoulder family is 29805—Arthroscopy, shoulder, diagnostic, with or without synovial biopsy (separate procedure), with an RVU equal to 12.59. If your payer is using the Medicare multiple endoscopy reduction rule, your reimbursement would look like Figure 3.

This reimbursement is the result of subtracting 12.59 RVUs for the base code in the shoulder family from the RVUs for codes 29826 (18.08-12.59=5.49) and 29824 (17.21-12.59=4.62). The difference in reimbursement between the standard reduction and Medicare endoscopic reduction is 7.53 RVUs—a significant difference.

What should you do?

There are steps you can take to help minimize this reduction. First, continue to follow the coding steps as you have been (1-4 listed above). Second, request a detailed multiple procedure reduction rule from your top 10 payers for ALL procedures, specifically arthroscopic procedures. Review your payer contracts and negotiate the specific point of multiple arthroscopy reduction if possible. (Unfortunately, you can not negotiate with Medicare.)

Keeping up with the specific orthopaedic reimbursement rules for your top payers is a huge challenge for any business office. Even when you code correctly according to CPT and AAOS guidelines, payers may choose different rules for reimbursement and bundling. Tracking and negotiating those payment policies is imperative for protecting your orthopaedic reimbursement.

Margaret M. Maley is a consultant and instructor for the Mastering Orthopaedic Coding Course sponsored by the AAOS in conjunction with KarenZupko and Associates.

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