General Surgery Coding Alert

Question: What are the guidelines for reporting the professional component for services?

South Dakota Subscriber

Answer: When a physician conducts diagnostic tests or other services using equipment supplied by a hospital or other facility, he or she must append modifier -26 (Professional component) to the appropriate CPT code to indicate that only the physician component (i.e., interpretation and report) of the service was provided.

Appendix A of CPT explains that some procedures are a combination of a physician component and a technical component. "When the physician component is reported separately," CPT further specifies, "the service may be identified by adding modifier '-26' to the usual procedure number" or by attaching the five-digit modifier code 09926.

The easiest way to determine if a particular CPT code contains both a professional and technical component is to consult the Physician Fee Schedule. Check the far left-hand column that lists each individual CPT code. If the Fee Schedule lists separate values for the code with modifiers -26 and -TC (Technical component), modifier -26 is appropriate for that code if only the professional component of the service is provided (meaning the physician does not own the equipment that he or she uses to provide the service). Typically, the technical component (-TC) reflects the practice expense and malpractice relative value units (RVUs), while the professional component (-26) reflects the work RVUs only.

Note: An updated Fee Schedule is announced yearly in the Federal Register and is available as a free download on the CMS Web site (www.hcfa.gov).

When the physician reports a procedure with modifier -26, the facility will bill separately to receive compensation for using its equipment. If the surgeon fails to append modifier -26 and the facility nonetheless bills with modifier -TC, the technical portion of the service will have been double-billed, which could lead to accusations of fraud or a demand for repayment.

For third-party payers, modifier -26 should be appended only if the physician does not own the equipment that he or she uses to provide the service, or reimbursement will be unnecessarily decreased (e.g., the physician should not append modifier -26 when performing a diagnostic test in his or her office using his or her own equipment). When billing Medicare, however, physicians can't directly bill for the technical component of a procedure even when they use their own equipment in the hospital. The hospital diagnostic related groups (DRGs), by law, cover the technical component of Medicare services for inpatients. For Medicare, the physician must bill the institution by a separate (fair market value) agreement if they are to recover the reimbursement of the technical component for these studies. This is an unlikely situation for surgeons, who perform most of their surgical services in the hospital setting using hospital equipment.

Technical and coding advice for You Be the Coder and Reader Questions provided by Marcella Bucknam, CPC, HIM program coordinator, Clarkson College, Omaha, Neb.