HCFA Implements Category Codes for Transitional Pass-through Devices

HCFAs new stance on billing for medical devices has given hospitals more decision-making responsibility for choosing, billing and coding devices under the transitional pass-through payment system. As of April 1, 2001, hospitals can bill devices with HCFAs 96 new category codes, which are defined, together with C codes, in Program Memorandum (PM) Transmittal A-01-41. Additional information on the category codes is also included in Transmittal A-01-40. This is probably one of the few times facilities are looking forward to a HCFA change that involves so much work.

Jeffrey Brady, radiology coder at Knapp Medical Center in Weslaco, Texas, says the change to category codes is a welcome relief. It is going to be a chore cleaning up the chargemaster, which had greatly expanded because each vendor-specific code needed its own charge, but it is a welcome task because, in the end, they will be much easier to work with, Brady says. He believes the new codes will also allow the hospital to try new devices and use items that might not have been on the pass-through list before. In Bradys department, the biggest impact will be with catheters, guidewires and balloons.
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What and How To Bill

With the new ruling come broad non-vendor-specific category codes; for example, all cardioverter-defibrillators (single chamber, implantable) are now billed with category code C1722. And, any device on the old pass-through list can be billed using the new category codes. Previously, each device had its own vendor-specific code and could only be billed using that code.

However, the crucial point is that hospitals can now bill at their discretion for other devices not previously billable under the pass-through list, with several caveats. The device must:

meet the definition of a device that qualifies for traditional pass-through payment as defined in the memorandum;

be described by a long descriptor associated with an active category code (for example, a catheter used for balloon dilatation [C1029, catheter, balloon dilatation MS Classique] falls under the category code C1725 (catheter transluminal angioplasty, non-laser [may include guidance infusion/perfusion capability]); and

comply with terms and other information provided by HCFA. (For example, in Attachment I of A-01-41, HCFA explains how packaged kits are affected by the new category codes, as well as how to bill for multiple units.)

Facilities should use the new category codes beginning April 1, 2001, but they can take advantage of a HCFA-mandated grace period and postpone implementation until June 30 by using the time-specific codes. However, experts recommend that hospitals avoid delay because the new system gives them the opportunity to bill for devices that might have been excluded from the original pass-through list.

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- Published on 2001-04-01