Anesthesia Coding Alert

Look for Revised Place-of-Service Indicators in 2003

Published on Sun Sep 01, 2002

As part of its proposed revisions to the 2003 Physician Fee Schedule, the Centers for Medicare and Medicaid Services (CMS) has recommended a number of changes to the place-of-service indicators.

Now, several place-of-service indicators are in use with no corresponding site-of-service (facility versus non-facility) designation. The CMS proposal assigns a designation to these sites and revises several existing site-of-service designations.

Barbara J. Johnson, CPC, MPC, professional coder at Loma Linda University Anesthesiology Medical Group Inc. in Loma Linda, Calif., notes that the proposed changes may not immediately affect pain management physicians. "Most pain management services are performed in clearly established places of service, such as the physician's office (designation 11) or an outpatient hospital (designation 22)," she says. "However, it's a good idea for pain management physicians and their coding and billing staff to keep abreast of any changes that may have an impact on reimbursement. As we all know, physicians can be called upon to treat patients in a variety of settings, whether conventional or nonconventional."

As Albany, N.Y., anesthesiologist Scott Groudine, MD, explains, "In a nonfacility setting, the physician pays rent for the OR space, equipment maintenance, sterilization costs, equipment depreciation, additional staffing and billing costs. In a hospital or surgical center, all these costs are handled by the institution instead of the physician. Therefore, in order to encourage lower total costs, a physician will have to receive additional compensation for going through the effort of performing the procedure in his office rather than just walking in and having a facility bear all these costs."

A "facility" is considered to be a hospital, a surgical center or an other accredited place that is collecting a facility fee from Medicare. For 2003, CMS has recommended that the following designations be considered facility settings:

06 Indian health service provider-based facility

08 Tribal 638 provider-based facility

26 Military treatment facility (currently designated as a non-facility)

41 Ambulance, land (currently non-facility)

42 Ambulance, air or water (currently non-facility)

52 Psychiatric facility, partial hospitalization (currently non-facility)

56 Psychiatric residential treatment facility (currently non-facility).

Groudine believes the new designations confirm that Medicare wants to move as many procedures as possible from the higher-cost facility-fee locations. They're doing this by attempting to make it worth a physician's time and effort to perform procedures for a lower total cost at locations that generate nonfacility fees. CMS has designated the following nonfacility settings for next year:

04 Homeless shelter

05 Indian health service freestanding facility

07 Tribal 638 free-standing facility

15 Mobile unit. Note: If a mobile unit provides a service to a facility patient, report the appropriate place-of-service code for the facility.

20 Urgent care facility.

All other place-of-service indicators not specifically mentioned are designated as nonfacility site-of-service locations. For the complete text of CMS 1204-P and a list of current place of service indicators, visit the CMS Web site at http://www.cms.gov/physicians/pfs/default.asp.

Get Ready for New Physician Fee Schedule

The proposed Medicare Part B conversion factors for anesthesia and all other specialties for 2003 have been announced, and the news is not good. All practitioners are looking at another decrease in reimbursement in excess of 4 percent.

Because anesthesia reimbursement is based on procedure units plus time units instead of just relative value units (RVUs) for each procedure, anesthesia has its own conversion factor. A national average conversion factor (ACF) for anesthesia is set, but the actual factor used by physicians can vary depending on their location.

The national anesthesia factor for 2003 is scheduled to decrease 4.6 percent, giving a total decrease of more than 11 percent over a two-year period (the factor was decreased 6.9 percent in 2002). If the proposed fee schedule stands, the new ACF for anesthesia in 2003 will be $15.84, down from $16.60 for 2002.

Services provided by pain management specialists are often reimbursed based on the overall conversion factor instead of the ACF. The proposed conversion factor for Medicare Part B next year is $34.6092, down 4.4 percent from the 2002 factor of $36.1992.

Final information regarding the new fee schedules is published in November each year, with the new schedules going into effect on Jan. 1. Watch for more details on the final ruling and how it will affect your practice in a future issue of ACA.