Pulmonology Coding Alert

Don’t rely solely on who owns the equipment

When your pulmonologist orders certain tests or studies, such as pulmonary function tests, you’re challenged to figure out if using modifier 26 is necessary. Appending modifier 26 isn’t always straightforward, but using these three pointers will ensure your physician gets the payments he deserves, every time.
 
Generally, if a physician conducts diagnostic tests or other services using equipment he doesn’t own or lease, you should append modifier 26 (Professional component) to indicate that she provided only the physician component (the administration or interpretation) of the service.

Separate the Technical and Professional

If your physician provides both the technical and professional components of a service, he may report the appropriate CPT code with no modifiers.
 
But, “when the physician component is reported separately,” CPT specifies, “the service may be identified by adding modifier ‘26’ to the usual procedure number.” In the latter case, the facility providing the equipment may claim the “technical component” of the service (the cost of equipment, supplies, technician salaries, etc.) by reporting the appropriate CPT code appended with modifier TC (Technical component).
 
Explanation: CPT’s Appendix A (“Modifiers”) explains that some procedures are a combination of a technical component and a physician (or professional) component. If the far-left column of the Medicare Physician Fee Schedule database lists separate values for the code with modifiers 26 and TC, modifier 26 is appropriate if the physician provides only the service’s professional component.
 
Tip: Medicare’s Physician Fee Schedule, updated annually, is available as a free download at the CMS Web site www.cms.hhs.gov/physicians/pfs/.
 
Example: The fee schedule lists values for both professional and technical components (0.05 and 0.62 relative value units, or RVUs, respectively) for spirometry code 94010 (Spirometry, including graphic record, total and timed vital capacity, expiratory flow rate measurement[s], with or without maximal voluntary ventilation). In other words, the full value of the code (0.67 RVUs) includes performance of the study, interpretation and report, as well as a fee for equipment, staff, etc.
 
Therefore, if the pulmonologist performs the test using equipment owned by a hospital or other facility and provides interpretation only, he must append modifier 26 to 94010. The facility will bill separately, appending modifier TC to 94010 to receive compensation for use of its equipment.
 
If the pulmonologist 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, says Laureen Jandroep, OTR, CPC, CCS-P, CPC-H, CCS, director and senior instructor for CRN Institute, an online coding certification training center based in Absecon, N.J.

Ask About More Than Ownership

Determining if modifier 26 is appropriate is not always as simple as asking, “Does the physician own the equipment?” When billing Medicare, for instance, physicians providing services in a hospital or facility setting cannot claim the technical portion of a procedure regardless of whether they own the equipment, says Neil Busis, MD, clinical associate professor at the University of Pittsburgh School of Medicine.
 
For instance, if the pulmonologist orders simple spirometry (94010) in his outpatient hospital office using his own equipment, you must append modifier 26.
 
Here’s why: Place-of-service 22 (Outpatient hospital) assumes that the hospital provides some portion of the physician practice management. Therefore, the hospital has the responsibility to report all facility-based fees, including technical charges associated with professional services provided by pulmonologists.

Negotiate With the Facility for Fee

A physician can still receive reimbursement for inpatient testing. Although the physician cannot bill the carrier for the technical component in the outpatient hospital setting, he may either bill the facility or establish a separate contract with it to receive the appropriate reimbursement, Busis says. This would apply in cases when the physician:

1. owns the equipment

2. employs the technician who performs the test

3. personally performs the test.

Even if the hospital owns the equipment, if either 2 or 3 of the above is true, the physician can recoup some payment, but this will require negotiation with the facility that he is providing the tests for.