Pediatric Coding Alert

Bad news: 2007 fee schedule decreases circ, lumbar puncture total RVUs

The 2007 Physician Fee Schedule is all about highs and lows: You'll jump for joy over 99213's increased values ... and then weep over the payment cuts to 54150 and 62270.

Medicare has released its final rule on the new fee schedule and its changes, like those made to circumcision RVUs, that will impact you the most. "Most of your payers use the Medicare RBRVS physician fee schedule to determine your reimbursement rates," which is why it is important to monitor these fees even though your patients aren't Medicare patients, according to Physician's Computer Company's In the News article "Medicare Conversion Factor for 2006 Returned to 2005 Level."

Mixed bag: "On the positive side, [the new fee schedule] increases values for cognitive services like 99213 and 99214," says Chip Hart, director of Physician's Computer Company (PCC) Pediatric Solutions consulting group in Winooski, Vt. But to make that increase, the conversion factor was cut across the board and the relative value units (RVUs) for many procedures were reduced, he says. Here is the lowdown on the latest rates.

1. Calculate Fees With a New Conversion Factor

To maintain mandated budget neutrality, the Centers for Medicare & Medicaid Services (CMS) cut the conversion factor (CF) by 5 percent. To find out approximately how much an insurer will pay for a code using the 2007 rate, you now need to multiple the code's total RVUs by 35.9848, instead of the 2006 CF of 37.8975. Tip: "You should encourage private payers not to adopt the 2007 conversion factor decrease, which is not directly relevant to the private sector," says Richard Tuck, MD, FAAP, a pediatrician at PrimeCare of Southeastern Ohio.

Don't overlook: When determining a code's payment rate, make sure to choose the total RVU that represents where the service is performed. Use the "transitional non-facility total" listed in column P of the national physician fee schedule to calculate the code's office payment. Look to column R or the "transitional facility total" for the hospital or facility value.

"The fully implemented RVUs [columns Q and S] will not become effective until 2010, so there is a five-year transitional period" that gradually phases in more significant increases and decreases, says Karen Walker, administrator at Pediatric Services of Florida in St. Petersburg.

2. Welcome More Cognitive Work Credit

When analyzing Medicare fee schedule changes, remember that everyone eats from the same pie. Any way you slice a pie -- bigger pieces for some and smaller ones for others -- you still have the same allocation, says Barbara J. Cobuzzi, MBA, CPC, CPC-H, CPC-P, CHCC, president of CRN Healthcare Solutions, a coding and reimbursement consulting firm in Tinton Falls, N.J. With regard to payments, this means that if one area receives pay increases, another area has to have a pay cut to maintain budget neutrality, she says

The big piece: Pediatricians win with major increases in problem-related E/M service RVUs. For instance, CMS assigned an additional 0.25 work RVUs to 99213 (Office or other outpatient visit for the evaluation and management of an established patient, which requires at least two of these three key components: an expanded problem-focused history; an expanded problem-focused examination; medical decision-making of low complexity). That increase plus a slight PE expense raise results in a raise of about $7 for level-three visits.

Some consultants are suggesting that the increased RVUs mean your 99213 claims could undergo increased scrutiny. But Cobuzzi takes issue with this speculation. "I don't see how raising payments equates to targeting those claims for auditing."

In fact, most specialty societies applauded the increased E/M values when the relative update committee (RUC) first proposed them. The American College of Physicians sited benefits including "an incentive for appropriate E/M service utilization" and an assurance of "a sufficient supply of primary-care physicians."

Rationale: CMS agreed with primary-care physicians that there was a need for a change to the current work RVUs. "There has been a change in the complexity of the patient population resulting in more diagnoses per encounter and more ambitious management goals," according to CMS-1321-FC page 548.

Other E/M RVU changes: In addition to upping RVUs for 99213, the proposed schedule also calls for significantly increased transitional RVUs for these E/Ms:

Perhaps the most dramatic change you will notice is the increases in inpatient E/M services. For instance, level-one initial hospital care code 99221 (Initial hospital care, per day, for the evaluation and management of a patient ...) will gain 0.63 RVUs for a total of 2.43 up from 1.80 or more than $19 ($87.44 in 2007 compared to the 2006 national rate of $68.22).

Downside: The new rates put a significant financial emphasis on acute visits and not on preventive medicine, Hart says. "It will be more cost-effective to do more 99214s (... detailed history, detailed examination, and medical decision-making of moderate complexity) than to do 99381s or 99391s" (Preventive medicine service; infant [age younger than 1 year]).

The little piece: While providing increased E/M service payments, the fee schedule will result in several procedural pay cuts. Three that will affect you are decreases to immunization administration, circumcision and lumbar puncture rates.

3. +50 and -55 Cents on Vaccine Admin

The fee schedule gives you 50 cents more for initial injection immunization administration -- and decreases each additional administration code by 55 cents.
 
The fee schedule assigns more PE RVUs to the initial injection codes. "Immunization administration codes [payment rates] 90465 and 90471 are slightly increased for 2007" up to $19.07 from $18.57, Walker says. But "these increases are offset by the decreases in the 'each additional' vaccine codes when more than one vaccine is given," Walker says. Codes 90466 and 90472 are down to $10.44 from $10.99.

4. Expect Circ Work Pay Gain, PE Loss
 
CPT 2007 revises nonsurgical newborn circumcision to include the dorsal penile or ring block as an inherent part of the procedure. However, you will be paid at a lower rate for circumcision code 54150 (Circumcision, using clamp or other device with regional dorsal penile or ring block).

"The work RVUs for the code increased slightly," Tuck says. "Unfortunately, this increase does not offset the elimination of the previously separately billable nerve block or the decreased nonfacility (NF) practice expense."

Amounts: The 2006-to-2007 NF and facility (F) rates for 54150 are as follows:
 
Although CMS agreed with the RUC's recommendation to boost the work RVU by 0.09, you'll lose the associated 1.27 RVUs from the previously reportable nerve block (64450, Injection, anesthetic agent; other peripheral nerve or branch). Code 64450 added 2.64 NF total RVUs or 1.88 F total RVUs for an added payment of $100.40 or $71.25 in the office or hospital respectively.
 
5. Receive Compensation for Spinal Tap

Performing a lumbar puncture on a young child requires more work than performing the procedure on an infant. And for now, regardless of patient type, you'll be compensated more for this increased work.

Future: Eventually, the American Academy of Pediatrics (AAP) and the American Academy of Neurology (AAN) may consider splitting the code into the two typical patient types to capture any differences in physician work, suggested the RUC in CMS-1512-PN. "However, for the current CPT code 62270 (Spinal puncture, lumbar, diagnostic), the RUC recommended that [the physician work] should be valued higher and recommended a work RVU of 1.37," which CMS agreed to and implemented in the 2007 Physician Fee Schedule. In the outpatient setting, this gain is lost with the associated loss in NF PE values.

RVU:       Work     NFPE     FPE      NFTtl     F Ttl      NF Pay    F Pay 
2006        1.13       3.00       0.56      4.21       1.77      $159.55     $67.08 
2007        1.37       2.82       0.55      4.27       2.00      $153.66     $71.97 
Change  +0.24      -0.18      -0.01    +0.06     +0.23         -$5.89     +$4.89
 
6. Tell NPPs They'll Receive MNT Work

Look forward to new work RVUs for medical nutrition therapy (MNT). CMS assigned work RVUs to MNT codes 97802-97804, ranging from 0.25 RVUs for 97804 (Medical nutrition therapy; group [2 or more individual(s)], each 30 minutes) to 0.45 RVUs for 97802 (... initial assessment and intervention, individual, face-to-face with the patient, each 15 minutes).

Tool: Download a searchable Excel file containing the 2007 rates from www.cms.hhs.gov/PhysicianFeeSched/PFSRVF/list.asp.