Radiology Coding Alert

See how a small status-indicator switch could cost you $46 per claim.

You never know what each new quarter will bring in the form of Medicare updates. This April, you need to be sure your practice is up to speed on physician fee schedule news.

What's new: The bilateral surgery indicator for 77071 (Manual application of stress performed by physician for joint radiography, including contralateral joint if indicated) has changed from 3 (The usual payment adjustment for bilateral procedures does not apply) to 2 (150% payment adjustment does not apply).

The effective date is Jan. 1, 2011, and the implementation date is April 4, 2011. That means that the changes are retroactive to Jan. 1, but your carrier's deadline for implementing the changes is April 4.

Old Way: '3' Offered Payment for 2 Sides

Code 77071 used to have a bilateral indicator of 3. Under the Medicare physician fee schedule, a bilateral surgery indicator of 3 essentially means that when you report the procedure as bilateral, the carrier will pay you separately for each side.

Indicator 3 rule: When you report both sides on the same date, Medicare will base the payment for each side on whichever is lower -- the actual charge for each side or 100 percent of the fee schedule amount for each side. The rule holds true regardless of how you report the bilateral service, such as using modifier 50 (Bilateral procedure), modifiers RT (Right side) and LT (Left side), or two units.

Additionally, Medicare's policy for the 3 indicator is: "If the procedure is reported as a bilateral procedure and with other procedure codes on the same day, determine the fee schedule amount for a bilateral procedure before applying any multiple procedure rules."

New Way: '2' Tells You 1 Code Covers Bilateral Service

Now that code 77071 has a 2 bilateral indicator, you'll need to be sure your reimbursement expectations are in line with the official fee schedule.

Indicator 2 rule: When CMS labels a code with a 2 bilateral indicator, "RVUs are already based on the procedure being performed as a bilateral procedure," fee schedule documentation explains.

As a result, if you report the procedure twice on the same date (using modifier 50 or any other means), Medicare will base payment on the lower of:

• The actual charge for both sides, or
• 100 percent of the fee schedule amount for a single code.

For example: Suppose you report 77071-LT with an actual charge of $50 and 77071- RT with an actual charge of $50. The actual charge for both sides is therefore $100. (Keep in mind, these dollar amounts are for illustrative purposes only.)

Medicare lists $46.89 as the national rate for 77071 in both a facility and a nonfacility setting.

In the example case, Medicare will base payment on the fee schedule amount for a single code ($46.89) because it is lower than the actual charges ($100) for both the left and right sides.

Change's impact: "This could be a big drop for practices that were collecting twice the reimbursement and now will get no payment adjustment," says Randall Karpf, a coding and billing consultant in East Hartford, Conn. "However, since the descriptor refers to inclusion of the contralateral joint, it would be hard to argue the fact that the code is inherently bilateral."

Good news: The change is retroactive to January 1, but Medicare isn't requiring contractors to search their files to adjust claims they have already paid. Contractors will adjust claims if you bring them to their attention, however.

Visit CMS Sites for Further Research

CMS announced the changes in transmittal 2150, CR 7319 (www.cms.gov/transmittals/downloads/R2150CP.pdf).  To read the MLN Matters article profiling the fee schedule changes, visit www.cms.gov/MLNMattersArticles/Downloads/MM7319.pdf.

If you want to review the definitions of the various status indicators, one resource is available by following these directions:

• Go to www.cms.gov/PhysicianFeeSched/PFSRVF/list.asp
• Click on the year for the files you want to review (such as the "2011" link on the same line as "RVU11B")
• Click on the zip file under "Downloads," and open or save the folder when prompted
• In the folder, open the "RVUPUF11" Word document, which includes status indicator definitions.