Pediatric Coding Alert

If you have already converted your practice fee schedule to one based on the resource-based relative value scale (RBRVS), good for you you have solid ground to stand on when battling for higher reimbursements from insurance companies. But if youre like most pediatricians, you havent made the leap yet. Part of this lag is because pediatricians rarely work in the Medicare system, where the Medicare RBRVS is the de-facto physician fee schedule. But pediatricians need to know about RBRVS because it can help them set fee schedules that work for them, not against them. If nothing else, using RBRVS guarantees that there is a level playing field among physicians.

RBRVS is a system that establishes a total work value for any procedure or service in CPT, explains Richard Tuck, MD, FAAP, a member of the American Academy of Pediatrics (AAP) coding and reimbursement committee and the founding chair of the AAPs RBRVS project advisory committee (PAC). RBRVS takes into account three components: physician work, practice expense, and malpractice expense. Those three components, totalled together, give the total relative work value for a code, says Tuck. To arrive at a fee, you multiply the RVU by the current conversion factor, which for the year 2000 is $36. This will give you the Medicare fee for the code. As will be seen, you need to use a higher conversion factor or percentage of Medicare RVU if you are a pediatrician setting a fee schedule. But the point is that once youve accepted the RBRVS, then you can use any conversion factor and arrive at relative fees that make sense.

More Than Medicare

Pediatricians who work mainly with commercial insurance companies should know that the Medicare fee schedule is less than theirs should be. When negotiating contracts with private payers, set reimbursement on Medicare, multiplied by a percentage. Lee F. Thompson, MD, FAAP, a member of the AAPs coding and reimbursement committee and a practicing physician in Denver, recommends 130 percent of 2000 RBRVS. You should try to get 125 to 130 percent of the RBRVS, he says.

And you need to pay careful attention to E/M services codes because they constitute the majority of the codes you will be billing. Pediatrics is different from surgery, notes Thompson. Seventy-five to 80 percent of our codes are E/M services codes.

A.D. Jacobson, MD, FAAP, a former member of the AAP coding and reimbursement committee, suggests another approach. You need to use what you do most as the basis for your fees. The most common code used in pediatrics is CPT 99213 (established patient office or other outpatient visit). So you must be very careful about what fee you set for that code, making everything else relative using RBRVS. Lets say you decide to charge sixty dollars for 99213, says Jacobson, who practices in Phoenix. You dont necessarily get paid that, but thats what youre using on your fee schedule. You take that value, and make all others relative to it.

What does this mean? In simple terms, it means that you multiply the RVUs by the conversion factor by 130 percent to arrive at a fee for a code. For example, the RVU for 99213 is 1.29. You multiply this by 36 to arrive at $46.44 (or rounding it off, $47), and then by 130 percent to arrive at $60.37. That will be your fee for 99213. (Tip: Bare in mind that this percentage will change on a yearly basis because the E/M codes are transitioning to be higher payments over the next two years.)

The RBRVS fee schedule was implemented in 1992 by the Health Care Financing Administration (HCFA), which administers Medicare. But many commercial payers and state Medicaid programs are now using RBRVS as well or variations of it to determine reimbursement.

When No RVUs Exist

There are some notable problems with RBRVS for pediatricians. For example, there are no published RVUs for some commonly performed pediatric procedures, such as the new code for vision screening or the new immunization administration codes. Therefore, to set your fees for these codes, you will need to work out what the actual cost is to you, and what your necessary profit margin is. Another way to solve the problem is to take a similar procedure for which there is an RVU and use that in setting the fee for the procedure that has no RVU assigned.

Take the example of the new vision screening code 99173 (screening test of visual acuity, quantitative, bilateral). There is no published RVU. But a comparable code is 92552 (pure tone audiometry [threshold]; air only). This has an RVU of 0.49, which results in a Medicare fee of $17.64. When 130 percent is calculated, this code would be worth $22.93. Consequently, $23.00 would be a consistent fee to charge for a vision screening, says Tuck.

But looking for a comparable code when trying to set a fee for a code with an unpublished RVU doesnt always work. Immunization administration is a case in point. There really is no comparable injection code because much of the work involved in administration involves education. One comparable code, for example, might be 90782 (therapeutic, prophylactic or diagnostic injection [specify material injected]; subcutaneous or intramuscular). But this only has an RVU of 0.12. Using a conversion factor of $36 and multiplying that by 130 percent, you would only get a total of $5.62 per administration. This is very low and reflects the hard truth that RBRVS is not designed for pediatrics.

A better way to set fees for immunization administration is recommended by Jacobson. I would use what the Vaccines for Children (VFC) program is paying, he says. These administration fees, which are paid by states, range from approximately $10 to $14. You can take the list from VFC and send it to your insurance company, telling them, This is what VFC pays, recommends Jacobson.

Make sure that you demand that reimbursement for any codes that do not have RVUs be specifically stated in the contract. Codes that dont have RVUs have to be negotiated separately, stresses Thompson. The administration fees are in limbo now.

Editors note: We are indebted to the late Charles M. Vanchiere, MD, FAAP, the former chairman of the AAP committee on coding and reimbursement, for much of the background in this article.