Gastroenterology Coding Alert

Presented by Joel V. Brill, MD

The following supplement to Gastroenterology Coding Alert is the transcript of a teleconference presented by The Coding Institute. To obtain the slides for the conference, please log on to our Online Subscription System at http://codinginstitute.com/login and open the PDF version of the current issue, and the slides will be contained therein. If you're not sure how to use the Online Subscription System or need help opening the issue, please contact our customer service department at 1-800-508-2582 or service@medville.com, and one of our representatives will be able to assist you.

The speaker for the teleconference, Joel V. Brill, MD, is Chief Medical Officer of Predictive Health, LLC in Phoenix. His areas of focus include coding and reimbursement methodologies, insurance contracting strategies, predictive modeling, disease management and pharmaceutical analysis. Dr. Brill is Board Certified in Internal Medicine and Gastroenterology, and has practiced for two decades in California and Arizona. He is a member of the Clinical Practice and Economics Committee for the American Gastroenterological Association (AGA) and represents the AGA at the CPT Editorial Panel, the RBRVS Update Committee (RUC) and the Practice Expense Review Committee (PERC).  Dr. Brill is an Adjunct Assistant Professor of Medicine at the Arizona College of Osteopathic Medicine.

Thank you very much and good day.  Thank you for wherever you are dialing in throughout the United States and I appreciate that you are spending the next hour with us, discussing the future of gastroenterology.  I am going to assume that all you already have your information in front of you so let us get started without further delay. 

What we are facing right now in the field of medicine is the transition of medicine.  Physicians are transitioning and practices are transitioning from being all things to all patients to a team of healthcare professionals which are delivering integrated care around small areas of medicine.  In fact yesterday the American Academy of Family Practice had a press release which looked at something very, very similar for the family practice side of medicine. 

Employers Are Shifting Healthcare Costs To Workers

What are we facing from a healthcare purchasing perspective?  If you go to next slide, you can see a chart, which shows you health insurance premiums, workers- earnings and inflation now over the past almost two decades- time.  The bottom lines shows that those worker earnings and overall inflation have remained relatively flat and that has been the effect of Allen Greenspan.  However at the same time, health insurance premiums have gone one up, they took a dip in the mid 90s and they have continued to go up.  Then as this health insurance premiums continue to go up at a rate of 10-12% or more per year, employers are shifting a greater amount of healthcare costs onto the backs of the workers.  Those things such as consumer directed healthcare, increasing premiums, increasing cost share, tiered networks and the like affect those of us who practice gastroenterology. 

What are some of the business issues that we-re facing?  We know that healthcare inflation continues to outpace the general inflation--I am sure many of you saw the article in the paper today that showed that General Motors is going to lay 25,000 people off.  But one of the things that we cannot see in healthcare is the same thing that you can see on a production line.  It is one thing to automate making cars by using robots, but you cannot automate having nurses and physicians taking care of people.  We are starting to see things such as technological advances.  We are seeing things such as $1 million or $2 million to buy CT machine $100,000 to buy a laser, $250,000 or more buy endoscopic ultrasound.  The question is, can these technological advances make a dent in these rising costs?  And I am always reminded the words of a pundit, PJ O-Rourke, who said if you think healthcare is expensive now, wait until the government provides it for free.  We are going to see that play out with the Medicare part D benefit when it will rise up in 2006. 

Looming Threats To Gastroenterology

Well what are some of the threats to gastroenterology?  Right now, gastroenterology, as well as other medical specialties are in the middle of the 5-year review process.  By law, Medicare is obligated to allow the medical specialties and opportunities every five years to bring back to Medicare codes for which they think are inappropriately valued.  At the same time, Medicare has also chosen over 130 codes during this go-round, which it believes may be inappropriately valued because they were only valued at the time of the original Harvard data.  There are the base gastroenterology codes, upper endoscopy 43235 flexible sigmoidoscopy 45330 and colonoscopy 45378, which are being surveyed in that process as we speak. 

Another threat to gastroenterology is reimbursing for ASC procedures.  In the Medicare Modernization Act of 2003, Medicare froze ASC payments through 2009.  Earlier this year, Medicare released an updated ASC payment schedule adding some new codes, but also at the same time announcing that they had a methodology, which they will likely implement on or before January 1, 2008, which will adjust how procedures are paid for and the facility fee for ASCs. 

Reimbursement for infusions has changed dramatically during this year's time.  We are seeing the fact that today the specialty hospital moratorium has expired.  But at the same time, the American Hospital Association attacks ambulatory surgery centers as they attacked specialty hospitals.  Of course, some of the big things for GI: who will control CT colonography and will Medicare insurance pay for CT fee as well as for either item such fecal DNA testing?

Physician Versus Patient Perception

Our next slide looks at how we view a population.  In the population, we recognize whether we are talking about a physician's practice, an employer group, health plan, Medicare or Medicaid, that approximately three fourths of the patients or 75% are generally well.  They come in infrequently, often times to come in for screening services.  At the same time approximately 5% of patients, the patients are sick, the physicians know that they are sick.  These high-cost patients consume tremendous amount of resources--very, very high cost.  There are two other groups however, that are very, very intriguing and very, very important to the gastroenterology practice.  The first are the overutilizers.  The patients who seek multiple doctors having the same procedure repeated over and over time and time again.  We call that population the hypochondriacs, and many of you may know someone who has more medicines in their medicine cabinets than Walgreen stocks in their pharmacy.  The other population, and the one that is of greatest concern, are the populations where the patient is in denial, where they believe that they are well, but in fact the physician knows that the patient is sick.  That 10% of the population--what we call the banana peels because if they slip, they will slip down into the high cost bucket.  So one of the jobs is obviously how can these people be identified, how can the gastroenterology practice use their efforts to treat these people now before they become high cost, because some of these peoples will be the focus of the pay for performance initiatives and similar initiatives they will be rolling out in Medicare as well as in the commercial insurance carriers in the next few years to come. 

What are some of the key trends impacting gastroenterology?  Well, obviously the aging of America, the obesity epidemic, the fact that gastroenterology, which has primarily been a procedural based specialty for the past three decades, is now moving into diagnostics.  Also, the impact of personalized medicine and genomics, cancer screening and not just colon, but we also have to consider the effect of Barrett esophagus and esophageal cancer screening in the future.  There is the rise of biotechnology drugs and their impact on gastroenterology.  The paucity of endoscopists, and the paucity of GI pathologists to do an incredible job in reviewing studies.  Other trends affecting gastroenterology include the explosion of new technologies, consumerism and an increased demand for services, the consumer price pressure that is being aimed at providers.  W e must face the fact that there are different expectations of those of us who have been in practice for two or three decades versus fellows who are in the first few years after training.  The expanded use of mid-level practitioners is the important critical success factor for practices, and as I mentioned, issues relating to pay for performance.  Other trends affecting practices include issues such as E-Prescribing and electronic health record.  It is one thing when the government has announced a new taskforce to make sure that everybody gets an electronic health record in the next 10 years time, but the question is, who is really going to be paying for it?  GI practices need to be marketing these days, you should not be focusing solely on the fact that you can endoscope and get to the cecum faster than your neighbor down the block.  There are issues relating to sub-specialization: do you perform, for example, or have expertise in hepatology and obesity and GERD and EUS, do you have a hospitalist practice, and the like. 

The Transition To The -High Throughput Consultative- Model

So from a business perspective, a practice should be looking at the following things:  Are you a group of integrated doctors that do a few things very well with maximum efficiency at a minimum price?  If you can do that, a large multi-specialty system will be less able to compete with a special unit such as yours that carves out focused services.  Let us face it--the laboratory companies, the radiologists have done that already, why should not gastroenterology be looking at that?  Now I would like to talk about the fact that in the old traditional conventional practice of gastroenterology, a physician tried to accommodate in a single day patients in the office, endoscopy patients, hospital consultations and emergencies.  This was the thoughtful, deliberate, service-oriented, single physician care model. 

However, we are starting to see that there really needs to be a transition to what we call the high throughput consultative group practice, which has a team and mission-oriented processes in place.  The idea is to combine the best cognitive care, combine it with large efficiencies and, looking at things such as centers of excellence for inflammatory bowel disease, for hepatitis, looking at the need to have your practice as a clinical practice with an ambulatory surgery center attached as well as a diagnostic testing facility attached.  The goal of having a hospitalist is to make sure that care is provided in an efficient and effective manner and of course the need for clinical research. 

The Nut And Bolts Of Mission-Oriented Practices

We would like to look at the fact that and I am sure many of you in this call may know where I am going, that in a confederacy practice, the individual needs were maintained at the expense of the group identity.  You may have different scheduling patterns: one doctor sees patients every 15 minutes, the other every 30 minutes.  Personal demands are accommodated.  You might have invaluable long-term employees who are given veto power over corporate policy.  We all know practices where patients belong to one doctor or another doctor and there is a difference in the benefits package amongst partners.  Those things cannot be allowed to continue to occur in order for practices of that nature to succeed in the future.  In contrast, a mission-oriented practice is one where the partners really cannot spend the other partners money.  We look at it that the physicians are employees during the workday, but they are owners at night.  Thus, it is physician run but it is professionally managed, and everybody does what they do best.  Some things in a mission-oriented practice will be to look at, when practices come together, to consolidate the clinic locations, centralize your scheduling, have a formalized governing structure and HR department with a financial and billing office, standardized benefits and a strict organizational chart.  At the same time, you eliminate the physician traveling to round -on your own patients.-  For example, we are aware of practices where very literally at the end of the day if the doctor has not turned in his/her time sheet at 5 o-clock, then by 5:01, there is someone from the billing office who is calling to see just what exactly was done during the dates, so that the bills can be submitted.  Do you do that in your practice?  From an organizational standpoint, what is your current practice setting, are you a confederacy?  Are you a mission oriented?  And one of the key things is that has your focus on endoscopy led to a loss of control of the patient? Have you become simply nothing more than an endoscopist, the people look at you the same way that they make a choice of which lab or which x-ray office to send the patient to.  From a business practice standpoint, practices should be looking at very critical things.  What are your coding practices?  Are you seeing patients at a level 2, level 3, or a level 4?  What is your visit mix?  Who is seeing these patients?  Are patients being seen for a follow up by a mid level such as a physician assistant or a nurse practitioner or is the doctor seeing every patient?  Who is calling the patient back with laboratory tests, x-ray reports, endoscopy reports and the like? Are you calling patients to see just because you wrote a prescription that they are actually filling that prescription and are they remaining adherent and compliant with those prescriptions?  What are you doing to reduce overhead?  Are you looking at the things from a productivity standpoint and how can you maximize marginal profits? 

Most importantly, what is your payer mix?  Do you have contracts that you signed several years ago, simply because you felt you had to sign in them and that when you analyze them right now, you will find out that they are really not the best contracts?  Do you have contracts in place, which allow you to be victimized by silent PPO discounts and as a result, you are leaving money on the table?  Some of the results from a practice analysis should be to reduce variability and to maximize shareholder profits.  If your group is recognized as an evidence-based provider group then you will have quality measurement programs in place. 

Radoiologists Are Lobbying To Control CT Colonography

One of the key things there is to look at how can you encourage clinical partnerships--not equity partnerships--with non-gastroenterology groups.  Well who is the competition?  Let us state that the other gastroenterology group in the same building across the street or across the town, they are not the competition.  We must all realize that radiologists are currently lobbying on the hill and in other areas to control CT colonography.  Many of you in this call may be in areas where already you may have managed care insurance contracts which prohibit or limit your ability to refer people to certain laboratory or radiology providers.  Just think what would happen if CT colonography became a radiologist-only test.  At the same time, as we mentioned previously, we have surgeons, family practitioners and internists who are performing optical colonoscopy, not just the flexible sigmoidoscopy, but they are billing as a colonoscopy.  We have insurance carriers directing care to provider networks, hospitals directing patients to owned facilities and as we have mentioned, the attempt by the AHA, the lobby the physician-owned specialty hospitals.  We must ask the question, how could this affect the ASC marketplace? 

Key Questions About New Technologies In Gastroenterology

What are the franchises in gastroenterology? Endoscopic ultrasound, irritable bowel, colorectal cancers, Barrett esophagus, gastroparesis, obesity, hepatitis and the like.  Why are these important? Well let us look at some of these from a standpoint of Barrett esophagus, new technologies are available, photodynamic therapy, mucosal resection techniques and thermal ablative techniques--whether it is an APC, a laser with a Barrx device.  Are you using these?  Are you providing these as a service to your community? What about endoluminal therapies for gastroesophageal reflux disease?  We have at least four therapies that are commercially available FDA-approved right now with several more on the horizon.  But one of the significant questions that we have to answer is, who is the right candidate?  What work-up should be done?  Should these patients have a PH probe?  Should they have a motility?  Should they have impedance testing done before you recommend endoluminal therapy?  What is the rate of the re-do?  Does one therapy have a 19% and the other one a 3% re-do?  Do the therapies show a decrease in medication usage post-procedure?  How do these therapies improve quality of life?  What is the rate that there will be a progression to surgery and does the procedure affect surgical approach?  These are all important questions that have yet to be answered in this field for these therapies, which include currently Endocinch, Enteryx, the Plicator and Stretta and will soon include gatekeeper and others.

Let us move on to the next slide and let us look now at the issues relating to the drug development pipeline.  This slide shows you that there are over a 300 drugs in the development pipeline with at least 17 drugs slated for the digestive disease arena.  From an issue of where can people receive infusion therapy,  Medicare currently only approves a physician office, home health settings, hospital outpatient and a comprehensive outpatient rehabilitation facility as sites for a Medicare beneficiary to receive an infusion.  They cannot get paid for infusions in an Ambulatory Surgery Center, nor in an Infusion Center and one of the questions is where is the right place for that patient to receive an infusion?  As we are seeing with office infusion reimbursement, you can see that the reimbursement for drugs has declined in two years from average wholesale price less 5 or 95% of retail, to the new formula of average sales price +6, which effectively is a discount of 25-28% off of retail.  In addition, there was a transitional payment for practice expense, which was adjusted downwards in 2005 and will go down further again in 2006.  This result is less money for providing the drug and less money for providing the service.  So one of the questions that you must ask yourself as you are providing infusions is, are you doing it on a one and one-and-one basis or are you doing like the oncologist where the nurse is monitoring 2-4 patients in a lounge infusion chair at one time. 

New CPT Codes Create A Wide Range Of Reimbursement For Infusions

From an infusion standpoint, the codes for infusion services changed for Medicare beneficiaries in 2005 with the G Codes and these codes will also change in the CPT book in 2006.  One of the key things that effects gastroenterology was a change in the descriptor that redefines chemotherapy to include complex biologic infusions for medications such as Infliximab or Remicade.  It is important to realize that we have now created codes for -hydration,- for example, the dehydrated patient who needs nothing more that a liter of fluids, to patients who need therapeutic infusions such as antibiotics prior to the patient receiving an endoscopic procedure and, as we have mentioned, chemotherapy infusions.  Why is that important?  The next slide shows that there is a very significant difference between the person receiving an infusion where the reimbursement rate this year is $79 for the first hour, and $26.54 for the second hour, compared to chemotherapy where the first hour of infusions are $177.60 cents and the subsequent hour is $40 and change.  How you bill and what you bill for is an important to ensure that you are getting what you are entitled to and not leaving money on the table.  Because the next slide shows you that the trend in the drug development marketplace is changing from development of oral medications to the development of targeted injectable therapies.  And whereas the cost for a years- worth of an oral medicine might be in the range of $1000-1500 for drug per year, with these injectable medications, we are talking about medicines costing $10,000 per year.

What To Expect Under Medicare Part D

Let us take a few moments time going over the drug benefit and how that is going to affect practices.  Currently Medicare covers a few drugs under what is called the Part B.  Medicare makes payments to physicians for drugs or biologicals that are usually not self-administered.  So if a drug is given by infusion in the office such as Remicade, it is covered; but if the injection itself administered, such as Pegasys, Humira or Enbrel, it is not covered by Medicare and Medicare has some very specific coverage policies where they cover drugs.  It is important to note that TPN is covered under Part B.  The definition of an incident to a physician's service, as we have mentioned, are drugs that are administered predominantly being 50% or more of the time by a physician or under a physician's drug supervision as incident to a physician's professional service.  It limits coverage to drugs that are not usually self-administered.  Beginning in January of 2006, the Part D drug benefit will go into place and these are drugs that are available only by prescription, approved by the FDA, used and sold in the United States and used for a medically accepted indication.  It includes not just drugs and biological products, but also insulin and medical supplies.  There will be over 29 million estimated Medicare beneficiaries who are projected to enroll in the drug benefit--that includes 6.4 million people who are dual eligible who are Medicare and Medicaid.  What that means is that with these dual eligibles, many, many patients will lose their drug coverage under Medicaid at the beginning of next year's time.  And as we are already know, the Medicaid formulary is a much richer and more expansive formulary than you will see covered under the Medicare Advantage prescription drug or MAPD and the standalone prescription drug or PDP plans. 

There are approximately 2.5 million people who will be eligible for this Part D benefit because they have low incomes of less than 150% under the federal poverty level.  However, there will be a significant number of people who are widows and widowers, who do not need this means test and will not be eligible for all of the care.  We would note that veterans have coverage, people in TRICARE and federal employees, those retirees are not participating in Part D.  There will be almost 10 million people in unions who will maintain their current drug benefit.  As we have mentioned about the dual eligibles, almost 6.5 million of these people will move from state Medicare to Part D on January 01.  Of these people, a third are under age 65, almost 38% have impairment, cognitive or mental impairment; 23% are institutionalized, 22 % have multiple physical impairments.  Medicare has already begun the process to automatically enroll these people if they do not enroll themselves.  Medicare started a process on the first of this month of notifying Medicare beneficiaries and if people are unable or unwilling to make an election, Medicare will choose at random from plans with premiums not exceeding the subsidy for the low income plan.  Why is that important?  People in nursing homes will be assigned the plans.  People who are currently covered will be faced with choices of coming to doctor's offices and saying, which plan do I choose?  And it is also important that you look at what types of drugs are excluded for Part D coverage.  We find it hard to understand why Medicare would exclude, for example, benzodiazepines from coverage, but they would agree to cover the erectile dysfunction drugs for this population.  It is important also to note that enteral foods are not covered under Part D.

Plans Have The Right To Deny Many Drugs

On next slide, which is entitled -off-label indications- is very, very important.  Under the law, a prescription drug is a Part D drug only if it is for a medically accepted indication as defined in the statute.  This definition includes the uses supported by a citation included in only four compendiums: the American Hospital Formulary Service Drug Information, United States Pharmacopeia, the DRUGDEX information system or the AMA drug evaluations.  Because this is the law, a statutory definition, if there are indications for drugs supported in peer-reviewed medical literature, but not yet reflected in one of those compendia, then it would not be a medically accepted off label indication, and the PDPs and MAPD plans will have the right to deny those drugs unless they are appealed.  How this will become important, well, can you imagine what will take place when patients start coming to your office in late November and December of this year in January of next year, requesting prescriptions for their new drug plans?  Asking for coverage changes because they have been stabilized on one drug but now need to be stabilized on another drug.  And oh, by the way, these plans can change the formularies every 30 days, but only have to notify beneficiaries every 60 days. 

From a standpoint of whether the drug is covered under Part B or Part D, remember that, for example, immunosuppressive agents are covered by Part B if it is for a Medicare coverage transplant.  Parenteral nutrition covers Part B if the digestive  tract is nonfunctional; and IVIG is covered by Part B if it is provided at the home for primary immune deficiency disorder.   But you may have other drugs, and again we will go back to Remicade, for example, that will be covered under the Part B,  but if the patient presents at the pharmacy with a script for the drug and it could be considered Part D--and we will wait to see what takes place over the next few weeks- time as Medicare releases back to the PDPs the results of their formularies- decisions to see whether they are being told to cover these medications such as Pegasys, Pegatron, Enbrel, Remicade and the like, under Part D. 

How will the consumer be protected?  Plans need to meet requirements, which means that each one of these new plans has a pharmacy and therapeutics committee.  Plans will look to the marketplace, and what the marketplace decides to do will have an impact on the enrollment.  Medicare has hired over 300 pharmacists who are reviewing the formularies and making sure that they cover drugs.  For example, you cannot have generic omeprazole and Prilosec as being your only two drugs in that class.  You have to have something else.  And what is the process for exceptions and appeals?  Will that PDP have its own internal process or will they have an external process?  There are standards for review.  There are standards presented to the patient if the patient shows up at the pharmacy with the prescription. 

Practices Serving Medicare Beneficiaries Need To Gear Up For Challenges

So let us face it: if all these people come to your office, will you have the time to deal with writings their new prescriptions?  There has to be this transition process for the new enrollee for prescribed drugs that are not in the plan formulary.  If the plan changes the formulary, they have to tell the patient why they change the drug, why they are removing it, why its status or preferred list or why its cost-sharing status has changed.  The patient needs to then have identified the therapeutic alternatives.  There must be a means by which the enrollee may obtain an exception.  So for those of you who may be practicing in areas where you have not had to deal, for the most part, with pharmacy benefit managers or managed care, but where you may have a significant number of Medicare beneficiaries, this will have a significant impact for you beginning in 2006. 

From a standpoint of infusion services, we are already starting to see health plans that are moving specialty pharmaceuticals from being paid under the medical to the pharmacy benefit.  Currently over 70% of health plans and payers still process these specialty drugs through the medical plan.  But now we are starting to see where people have to get approval or preauthorization, for example, for medications such as Pegasys and Pegatron.  Controlling the authorization process, shifting it to the specialty pharmacy providers, may also have an impact for those of you who provide infusion services in your office, because we are seeing some plans that are now just paying a flat rate for providing an infusion, regardless of the complexity or the cost of the drug.  We have already seen, in this quarter, that Medicare through its average sales price formula, has reduced the reimbursement of medicines such as IVIG to $10 less per vial than what most physicians can purchase it.  And as a result infusions for IVIG have dramatically moved in April and May, out of the physician's office and into the hospital outpatient setting.  Could the same thing occur with other drugs? It remains to be seen? 

Drugs Obtained Through CAP May Be Less Expensive

We also have to look something as called the Competitive Acquisition Program that is also scheduled to be going to affect in January of 2006 for the Part D drugs, the drugs are infused in the office setting.  The analysis of your contracts becomes very, very important.  You need to look at that question.  Can you get the drug cheaper from the CAP program or through your current vendor?  We are already seeing, as we have mentioned, patients with suboptimal reimbursement who will be referred to hospital outpatients or high volume infusion practices such as an oncology or infectious disease practice.  And how many of you have already looked at whether you are limiting patients who have certain insurances such as Medicare or another commercial insurance plan to a certain number per day?  You may elect to say that perhaps you may not wish to provide these services for certain patients in the future. 

No Long Term Fix In Sight For Flawed SGR System

Now let us talk next about the conversion factor issue.  For the last few years, the Medicare Modernization Act has increased the conversion factor by 1.5%--it was increased in 2004 and in 2005.  We have to recognize that unless Congress adjusts the sustainable growth rate or SGR formula, there could be a 4.5-5% decrease in this conversion factor each year, beginning in 2006 extending to 2012, with an additional 2% decline in 2013.  The SGR is flawed in part because these drugs that are being infused in the doctor's offices, which is going up at a rate much higher than for the cost of other services, is impacting the SGR formula.  The AMA, The AGA and other organizations have testified and argued at a  congressional level that this formula needs to be fixed. 

Approximately two weeks ago, there was legislation introduced in the House by Representative Ben Cardin and in the Senate by John Kyle and others looking to at least create a one year temporary fix and to increase the conversion factor.  But doing a temporary fix does not affect the base root problem, which is that healthcare costs continue to grow faster than the gross domestic product, and will these faster economic growths automatically create bigger Medicare deficits?  How will the system react? 

With that charming thing to think about, let us next go into the payment discrepancies for procedures between the Ambulatory Surgery Center and the hospital outpatient department.  One of the things that you should be looking at right now, especially if you are responsible for an ASC, is to identify those procedures where the ASC payment is higher than a hospital outpatient payment.  The question that you must ask yourself is the following:  Can you maintain the financial success of your ASC if the payment decreases to somewhere either at parity with the hospital outpatient or as low as 85% of the hospital outpatient setting?  Because if the ASC payment is currently less than the hospital outpatient payment, can you be optimistic that it would actually rise under the new payment rules?  What does this mean?  Let us look and let us speculate for the future.

ASC Payment Rate Could Drop To Less Than 100% Of Hospital Rate 

On the slide entitled -planning for the future 2008,- we have listed several procedures.  For example currently the ASC reimbursement for an esophagoscopy with biopsy 43202, or an EGD 43235 is $333.  The HOPPS payment is $460.  Is it possible that the government would raise the ASC payment to the HOPPS level or to a number 85% of the HOPPS level, which will be $391? 

However, let us look at 43239, an EGD with biopsy.  The current ASC payment is $446.  The HOPPS payment is $460.  That means that if the payment under the new ASC regulation is set at, for example 85% of hospital outpatient, that too could drop to $391.  Similarly a sigmoidoscopy and biopsy 45331 which is paid at $333 in the ASC, is paid for $247.78 in the hospital outpatient setting, and there could be a significant additional decline if that is paid at a rate less than 100%.  And let us not forget colonoscopy 45378 and screening G0121 because while both of these paid at $446 in the ASC setting, the hospital outpatient payment for a colonoscopy is $490, but for a screening is $441.  And if the payment rate is set at percentage of hospital outpatient, those payments could decline, for example to approximately $416.50 for colonoscopy or as low as $375 for a screening colonoscopy.  Why would they set a rate of less than 100%?  Because an ASC operates only one shift a day, whereas the hospital operates on a 24/7 basis and has to provide uncompensated care and has to keep the lab and x-ray in the operating room open or have staff on call on that basis.  Because the ASC does not have those other costs, one can speculate why the government might come up with the payment rate that is less than 100% of what they pay hospital. 

There has also been a significant decrease in office based procedure reimbursement in recent years, for example, colonoscopy has gone down to the reduction of practice expense, the volume of procedures performed and let us also recognize that gastroenterology historically has had a low practice expense compared to other specialties.

Let us go next sites of the gastrointestinal services.  As we know, surgical procedures are performed in an Ambulatory Surgery Center and those are your 40,000 codes.  However, diagnostic procedures, radiology, lab and diagnostics are not paid for in an ASC setting nor are infusion services.  There are new procedures that were added to the ASC list, but in the wisdom of adding these services, the government put them in payment groups which are inadequate to pay for the cost of performing these procedures.  For example, it is patently ridiculous for a colonoscopy with stent 45387 to be put in payment group one with a payment of $333 if the stent alone costs over $1000. 

IDTFs Must Be Kept Distinct From ASCs

Recognize that an ASC is an entity and current regulations and policy do not allow an entity to function both as an ASC and an independent diagnostic testing facility, mixing unrelated functions and operations and a common space during concurrent or overlapping hours of operation.  Thus the two facilities must be separated by times, such as different hours of operation, or one entity could operate in the ASC space only when the ASC is not operating in that space.  For example, the ASC operates during the daytime and the IDTF operates at nights and weekends. 

Now independent diagnostic testing facility services include radiologic services, laboratory services and gastrointestinal diagnostic services.  One question that you might ask is, can the ASC maintain an IDTF during concurrent hours of operation if that IDTF is physically and organizationally distinct from the ASC? And the second question is, can the ASC and IDTF be located at the same street address?  These are all very, very important questions as we look at the emerging diagnostics in gastroenterology.  Things such as Bravo, smart pill--these are what will happen with CT colonography. 

From the standpoint of conscious sedation, many of you are aware that the three GI societies issued the joint statement over one year ago, which stated that the use of anesthesia services for routine endoscopy was not warranted and that CPT introduced an Appendix G which listed over 220 codes this year that included conscious sedation as an inherent part of the procedure.  In the appendix, it states that provision of conscious sedation services is not separately reportable by a physician performing the primary service.  At the same time, we do know that there are anesthesia codes and that an anesthesiologist can separately report an associated anesthesia service when performed by a provider other than the operating physician. 

One of the questions that payers--commercial as well as Medicare--are starting to take a very hard look at is when and why it would be appropriate for an anesthesiologist to provide sedation services to the patient undergoing endoscopy when they know that the reimbursement for the endoscopic procedure includes a practice expense component of reimbursement for conscious sedation. 

Pay For Performance Will Measure The Cost Of Adverse Effects

Another thing that practices such as yours should be looking at are things relating to pay for performance.  There is a cost of adverse effects and let us face it, when someone does not do well with one drug, it relates to the patient sometimes stopping therapy, switching therapy, adding a drug to treat the adverse effect. And almost 30% do not have a change.  At the same time, there is a cost to an adverse effect because that patient has to come in to be seen for another office visit.  The cost of these adverse effects must be factored into the overall costs of technology.  One of the things that groups will be measured on is what are your cost of adverse effects and are you providing the right service to the right patient at the optimal time in an effective manner?  How effective and efficient are you?  We have seen areas as diverse as Dallas, Minneapolis and others where there are insurance payers who are now making selections on networks based on how well that group does, and factors in the cost of adverse facts.  In these tiered networks, patients are given financial incentives to choose a provider in the first tier as opposed to the second tier. 

We then get to pay for performance and while this has been a West Coast phenomenon, it is spreading throughout the country.  Even in the West Coast, there are great disagreement amongst plans because some plans may be doing pay for performance based on, for example, how well are you managing your diabetics, and others are doing pay for performance based on how well you are maintaining a generic formulary.  Are these going to be positive incentives--will they put more money in the pot or negative withholds?  Medicare has already gone on record, saying that under their version of pay for performance, they envision starting off with a negative withholding.  That is, paying doctors not 100%, but paying at 99% and then paying back that last percent only if you meet the pay for performance standards.  If we do not see uniform pay for performance measures across insurance payers, how will we get doctors to buying to the system?  And for that matter, what will do if  you have a patient where you do the right thing and you recommend the screening test or the medication but the patient is noncompliant; should the doctor be dinged because the patient is noncompliant?  These are all important questions that need to be answered. 

We do not yet have good pay for performance measurements for gastroenterology.  Is it, how many patients who get colorectal cancer screenings or is how quickly can you get to the cecum and back out again?  We do not know yet.

Key Issues For Success  In Gastroenterology

Well in our next few slides, we are going to look at some of the issues, they are very important for people who are paying and purchasing care because they will an impact on how we are successful in gastroenterology.  From the standpoint of population health management, stratification is already starting to occur, using tools to look at medicine and pharmacy claims to stratify the groups of patients into forecasted risk groups.  Medicare has already announced that they plan to use data that they will now get from the part D drug benefit to identify how well patients are doing.  Stratification will help Medicare and other payers identify whether people are being managed in disease or case management programs or preventative programs. 
From a consumer directed healthcare standpoint, we have seen this explosion throughout the country -quot; people are given control of their dollars.  One question will be, when a patient is paying with their own dollars, will they use that money to take the drugs they need, or will they use it for the screening services, will they pay for the medications or will they bank their dollars and then use it for cosmetic procedures at the end of the year?
  From the standpoint of emerging diagnostics, we have CT colonography, imaging procedures, a DVW, we heard that a Olympus was coming up with a new capsule, and there is another company in Israel, the GI view, which has a retrograde analytic procedure for looking at the colon.  Smart pill, which is a tool that is looking at motility in the stomach and gastroparesis, as well as emptying and duodenal motility, is coming down the pike shortly.

Policy Questions To Consider Before Purchasing A CT Colonography Scanner

From a standpoint of a CT colonography, new codes were created--category III codes--effective July of last year.  There will be at some point a category I code in the future, but some of the key things are, who will interpret these studies, who will own the scanner and will gastroenterology or radiology own this franchise? 

What is the impact of a minimal lesion?  Let us face it, if someone has a small lesion, would you be comfortable in telling the patient that, -we will watch and wait and bring you back in three or six months- time,- or would you feel much better telling that patient that you are going to come back tomorrow and we are going to take that out.  Do we know the health outcomes of the small lesions and what is the economic costs of the system if a person has a colonoscopy and has a CT colonography, or if they have to undergo repeat preparations?  The radiologists are currently funding a national CT colonography study and it is being funded by The National Cancer Institute but coordinated by the American College of Radiology.  They are trying to determine whether CTC is effective as colonoscopy in detecting polyps and cancer and there are sites throughout the country.  So one of the questions that you should be looking at is, should your practice add a CT scanner now?  How many patients are you currently sending out for imaging referrals?  If you are thinking of getting a scanner, does it allow 3D reconstruction and does it allow software upgrades?  A maintenance contract is essential.  Let us face it.  You cannot go to Wal-Mart to buy a new light bulb for a scanner, especially if one of these bulbs costs a quarter of a million dollars.  Are in a state that has a certificate of need issue and do not forget stark regulations currently prohibit the performance of CT on patients, who are not part of your practice or there is not a preexisting doctor patient relationship.

Up And Coming Technologies

Capsule endoscopy, currently code 91110 covers esophagus to ileum imaging; the pill Cam, the esophageal capsule should probably be coded as 91299 an unlisted procedure because the current ICD-9 codes with 91110 are targeted to small bowel, not to foregut or esophageal disorders.  We believe that a stomach as well as a colon pill Cams are on the horizon. Olympus has announced, as we mentioned, a new capsule which not only can use magnets to rotate in all three dimensions but also claims that it will do sampling of contents.  And we have mentioned this other company, GI View, which is coming out with retrograde colon imaging.  In fact in the last two weeks- time, Carnegie Mellon University introduced in the literature the NanoRobot -Intestinal Bug- and Case Western University has described -slug colonoscopy.-  There is a lot coming down this field and again, that whole issue of having an independent diagnostic testing facility, either standalone by itself or coexistent with your ASC, should seriously be considered. 

We have mentioned Smart Pill and we anticipate that FDA approval will occur late this year or early next year.  Smart pill will measure, by at least we could be able to determine by looking at their web site, gastric emptying, gastric and small bowel motility and gastric PH.  And so we will have use for evaluation of patients with nausea, vomiting, gastroparesis and irritable bowel syndrome. 

As we all know, there was a CPT code created this year for the Bravo device, 91035, and while we all recognize that the Bravo is not reimbursed within the ASC setting, it can be reimbursed with an IDTF setting.  Remember that you report Bravo on the day data was acquired for analysis, not the day the capsule was placed.  There are new codes created this year for esophageal impedance 91037 for the first hour or 91038 for prolonged impedance of greater than one hour.  If you are doing greater than one hour, you do not report those two codes together.  Impedance can be used to measure not only acid but also acid and alkali reflux as well as esophageal function.  And there may be an increasing need for impedance measurements in the future to evaluate patients with reflux--especially those who are may be a candidate for endoluminal or surgical therapies. 

One thing that people always ask is, how valuable am I to the hospital?  In Hepatology in April, there was a fascinating study, which looked at what a hospital generates and charges for each dollar that you bill.  A gastroenterologist generates $5.31 charges.  A hepatologist generates $26.95, but a transplant hepatologist generates $51.03 to the hospital for each dollar that that physician bills.  Obviously, you can see the revenue economics that are related to transplants in this day and age. 

Last but not least we come to obesity.  There are economic discussions, such as is it a medical condition?  Is this a lifestyle condition?  We have seen reports released recently in the annals of Internal Medicine describing who would be the appropriate candidate for obesity surgery.  There are minimally invasive surgical approaches, endoscopic approaches and gastric pacing on the horizon.  Time does not allow me to go through everything, but I will point out that space occupying devices, gastric reduction and suturing devices and pacing devices are on the very near horizon for the gastroenterologist.  There are other new technologies on the horizon, such as radical endoscopy, transluminal organ resection and gut to gut anastomosis, ancillary endoscopy--which includes things such as site-specific delivery of biologicals, the electrode motility stimulating devices and the coming -chip on a stick. - Zoom endoscopy, magnification and chromoendoscopy are all coming down the pike as well. 

Reimbursement Scenarios After The Five-Year Review

Well, what is the perfect storm?  Medicare has requested a review of the base codes, the physician work as part of the five-year review.  Could the volume of services performed continue to lower colonoscopy reimbursement?  Could ASC procedure reimbursement decline?  Could advocacy groups or other societies such as radiology lobby for Medicare coverage for screening, CT colonography or fecal DNA testing?  Let us play prognosticator.  Here is the five-year review.  We know that the four codes are being reviewed.  Let us look at the following:  If Medicare currently pays for an EGD 43235 $136.  Now, could this go down?  If this went down for example, by approximately $15-20 and there was no change of conversion factor, the reimbursement would be a $118-$120.  If there is that 5 to or so percent decline per year in the conversion factor, the reimbursement could go to a $106.  And let us look at 45378 colonoscopy, where Medicare currently national average pays $207.  Could that go as low as $153?  These were all important decisions gastroenterology must consider. 

So, in conclusion, the digestive health practice is a team approach to care.  You have to look being efficient and effective.  You have to define clinical roles and you have to be able to measure and report what you do.  You have to be very consumer focused.  It is important to offer multiple services under one roof and above all, be effective and efficient with what you do.  Well, you have downloaded your slides, see know how to contact me and we made it under an hour.  So, I appreciate your taking the time to be with us and I think at this point, I will turn this back over to our moderator for any questions.

Thank you Dr. Brill.  Ladies and gentlemen I would like to remind you that this portion of the conference is also being recorded.  If you have a question at this time, please press *1 on your touchtone telephone.  If your question has been answered or you wish to remove yourself from the queue, please press #.  Please limit yourself to one question at a time so that everyone may have a chance to participate.  If you have another question, you may re-enter the queue by pressing the *1.

Q & A Session:

Again, ladies and gentlemen If you would like to state a question, please press *1.  Our first question comes from Nicole Bartley of The Coding Institute.  Please state your question.

Question (NB):  Hi, Dr. Brill.  I have some questions that were sent in via e-mail and the first one asked, can you perform CT colonography in your ambulatory surgery center?

Answer:  The answer is no.  CT colonography would be a diagnostic test.  Right now, it is a category I II test, so we do not know whether it will land in the 70000, radiology services or the 90,000 the GI diagnostic tests; but it is an IDTF service and it could not be able to be performed in an ASC.

Comment (NB):  And what about infusions?

Answer:  Again, infusions are not surgical procedure services.  There is a way for infusions to be performed, however, that would require either decertifying a certain space in the ASC or designating a space in the ASC as a physician office for a period of time.  During that time, no other surgical services could be performed in that space.

Question (NB):  Okay. Thank you.  The next question I have here as, how will the Medicare Part D benefit affect practices in late 2005 and early 2006?

Answer:  Well, I think that thing to consider is the fact that there will be millions of Medicare beneficiaries who will be probably storming their physician offices sometime after thanksgiving when they finally figure out that they need to get a prescription to cover their drugs.  Patients are also going to be affected by the fact that there will be something called the doughnut hole, which means that for a financial period of time, the patients will be responsible for 100% of the cost of their drugs.  There is a fascinating article on the cover of this week's Forbes magazine, which looks at this issue, and I recommend that you all look at that.Because if patients will be coming to your office looking for prescriptions, asking you to evaluate their new PDP plan, telling you that the drugs they were controlled on for the last several years- time are not available under the new plan and would you please write down a new prescription?  You must be prepared for that happening.

Question (NB):  Okay.  Another question I have here is how will the CPT classify medications such as Infliximab for coding and reimbursement purposes?

Answer:  Well, Infliximab or Remicade as we have mentioned under the G-codes for Medicare beneficiaries in 2005, the term -chemotherapy- was expanded to include biological response modifiers such as Remicade and so it is essential that any practice that is currently infusing Remicade needs to one, make sure they are using the right code for Medicare patients; and two, needs to check with that commercial insurance payer to see if they will accept, if not the G-codes, at least the G-code refined definition of chemotherapy.  Those new codes will be translated from G-codes to category-1 CPT codes in 2006.

Question (NB):  Okay, the last question I have here says, when will the current five-year review changes to reimbursement become effective?

Answer:  The five-year review changes; the process is as follows:  Currently, not just gastroenterology but all of the specialty societies are serving members on the codes that have been targeted and tasked to survey.  Those specialists will be meeting in work groups during August or September of this years- time and the results will be presented to Medicare.  Medicare will then publish their analysis of the five-year review in November 2006 and they will become effective in January of 2007.

Comments (NB):  Thank you very much.

At this time, there are no further questions, I would like to turn the program back to Dr. Brill.

Well.  Again, thank you so much for those of you who have given an hour of your time to listen in and participate.  I hope that we have given you some food for thought and I hope that we have also raised intriguing questions.  Should you wish to reach us, we are available for your questions and with that note, if there are no other questions, thank you very, have a pleasant day and good luck.

This is the conclusion of -The Future Of Gastroenterology:  How To Prosper Despite Coming Changes- national teleconference.  We hope you enjoyed this session.  Please complete your teleconference evaluation form and return it to The Coding Institute at the address listed on the form.  Dr. Brill, the Coding Institute, and I would like to thank you for your attendance.  To end this call, just simply hang up your phone.  Good bye.

Remember:  To view slides please refer to this issues PDF.