Orthopedic Coding Alert

2005 Fee Schedule offers some gains, but a few big losses, too

The good news: CMS has released its 2005 Physician Fee Schedule, which increases the relative value units (RVU) for several orthopedic procedures. The bad news: You'll also be seeing some big reductions in RVUs for other common procedures - so how the new fees will affect your practice will depend on which of these procedures you're performing most often.
 
Medicare will boost the conversion factor to 37.8975 this year, a 1.5 percent raise over the 2004 value of 37.3374. Medicare multiplies a procedure's RVUs by the conversion factor to arrive at the allowable reimbursement for that procedure.

Welcome Increase for G0289
 
CMS offers some increases for orthopedic surgeons this year, although most RVU raises are only in the 2 to 5 percent range. On the plus side, you won't lose money on procedures that suffered slight RVU decreases this year, thanks to the higher conversion factor.
 
Example 1: In 2004, Medicare assigned 2.37 total nonfacility RVUs to G0289 (Arthroscopy, knee, surgical, for removal of loose body, foreign body, debridement/
shaving of articular cartilage [chondroplasty] at the time of other surgical knee arthroscopy in a different compartment of the same knee). Multiplied by the conversion factor of 37.3374, that yielded $88.48 in reimbursement. In 2005, Medicare assigns 2.53 nonfacility RVUs to G0289, which, multiplied by the new conversion factor of 37.8975, brings in $95.88 - an increase of 8.36 percent.
 
"This still pales in comparison to what we brought in back when we could bill 29877 (Arthroscopy, knee, surgical; debridement/shaving of articular cartilage [chondroplasty]) along with our meniscectomies," says Kay McMahon, coder at Central Orthopedic Associates in Massachusetts. "The raise is nice, but 29877 pays over $500, and it's too bad that Medicare still refuses to pay 29877 for separate compartment chondroplasty with a meniscectomy."

Expect Pay Drop for 22520

Unfortunately, Medicare slashed RVUs for several orthopedic procedures this year, and even the higher conversion factor won't change the fact that you'll lose money for some commonly-performed procedures.
 
Example 2: In 2004, Medicare paid $4,171 for percutaneous vertebroplasty (22520, Percutaneous vertebroplasty, one vertebral body, unilateral or bilateral injection; thoracic) (111.71 RVUs x 37.3374). In 2005, however, that will drop to $2,728 (71.98 RVUs x 37.8975) - a 35 percent cut in reimbursement.
 
"Medicare will also be cutting the lumbar version of this procedure (22521) by 32 percent," says Randall Karpf, owner of East Billing in Hartford, Conn. "Clearly, Medicare thought that these vertebroplasty procedures were vastly overvalued. Unfortunately, this is really going to hurt spine surgeons who specialize in percutaneous vertebroplasty."
 
Note: For more information on the new fee schedule's effect on specific codes, see "Chart the Changes to 2005 RVUs That Will Impact Your Bottom Line" in this issue.

Determine Overall Reimbursement With GAFs

Medicare carriers adjust fees depending on the practice's geographic location according to the relative cost of providing healthcare in that area. About half of the 92 geographic areas defined by Medicare will see increases in their geographic adjustment factors (GAFs) in 2005. The rest will either not change or decrease.
 
Example: The GAF for Santa Clara, Calif., will rise 3.4 percent, from 1.184 in 2004 to 1.224 in 2005. Meanwhile, in Manhattan, the GAF will shrink 1.8 percent, from 1.225 to 1.203.
 
Ask your carrier for specific information about how your local GAFs will affect your reimbursement in 2005 as compared to 2004.
 
Visit the CMS Web site at http://www.cms.hhs.gov/regulations/pfs/2005/1429fc.asp to download the entire 2005 Medicare Physician Fee Schedule.