Damage Control - Protecting Your Practice
Monica Kemppainen, Ph.D.
It never ceases to amaze me that practitioners and/or testing facilities do not annually evaluate their chargemaster and its relations to each years resource-based relative value scale (RBRVS) rates connected with their most commonly used Current Procedural Terminology (CPT) codes.
In the RBRVS system, payments for services are determined by the resource costs needed to provide them. The cost of providing each service is divided into three components: Physician work, practitioner expense, and professional liability insurance. Payments are calculated by multiplying the combined costs of a service by a conversion factor--a monetary amount that is determined by the Centers for Medicare and Medicaid Services (CMS). Payments are also adjusted for geographical differences in resource costs.
Oftentimes, when I evaluate a facility and note that the reimbursement rates are above the charges, this is a flashing neon sign indicating that the practitioner and/or testing facility managers are not annually evaluating their most frequently used CPT codes and may not be reimbursed in an appropriate manner.
Practitioners and/or testing facilities must negotiate rates for all new and revised CPT codes with private payors on an ongoing basis. Health Insurance Portability and Accountability Act (HIPAA) regulations require that all payors (not just Medicare) use the American Medical Association’s (AMA's) CPT codes as the "standard procedural code set,” and update their systems according to the release of the new edition of the CPT book, every year. This is January 1st of each year.
For example, in 2013, Neurologists who previously reported Nerve Conduction Study (CPT codes: 95900, 95903, and 95904) and H–reflex codes (CPT codes: 95934 and 95936) are no longer in existence. These old codes therefore cannot be used for any payors after 01/01/2013. The AMA established seven new nerve conduction codes (95907–95913) for 2013. In the new coding structure, the unit of service in codes 95907-95913 is the number of nerve conduction studies performed.
There may be confusion about when new CPT codes take effect because practitioners and/or testing facilities are still able to report consultation codes to those private payors that continue to reimburse for the codes. These private payors still have the option to reimburse for consultation codes because the AMA CPT Editorial Panel did not delete consultation codes out of the code set. CMS merely made a decision that they would no longer reimburse for those codes.
Practitioners must negotiate fees with their contracted payors on an annual basis. In the negotiations, they should consider whether they receive a certain straight percentage of Medicare, or whether different services receive a varying percentage of the Medicare rates as part of that particular contract. Then, adjust their chargemaster accordingly.
What follows is a simple example about how to create a chargemaster with the
Each practitioner and/or testing facility should annually create a spreadsheet that outlines the reimbursement for each of their main procedures. For most practitioners and/or testing facilities this amounts to less than 50 CPT codes. For larger practices and/or facilities this can be approximately 8,800 CPT codes. Either way, this is a simple process that can be completed in Excel using formulas and helps to keep everyone on the same page--the practitioners and/or testing facilities are then aware of their reimbursement and can monitor whether they are reimbursed in an appropriate manner.
Monica Kemppainen, Ph.D.
Monica Kemppainen is an executive with a background in strategic planning, program planning, program evaluation, and Return On Investment (ROI) investigations. Her passion is to help executive teams make informed decisions. Monica specializes and has diversified experience in merger/acquisition integration, clinical information systems, major business change, interim management, project/program management, business case development, strategy/organization development, and customer relations management (CRM). Moreover, she is both a patient and/or a practitioner advocate.
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