Answer: Medicare has a Physician Fee Schedule Data Base that delineates which surgical services can be billed with an assistant at surgery under specific circumstances but other payers don't, making it a challenge to get them to fork over appropriate reimbursement.
To answer your question, this policy is correct. In general, Medicare will not pay an assistant surgical fee to a physician if he in fact has performed a major surgical procedure at the same sitting, even if the surgical procedure warrants an assistant but this rule does not apply to co-surgeons.
In this case, each physician should bill as co-surgeons, individually submitting claims for 51597 (Pelvic exenteration, complete, for vesical, prostatic or urethral malignancy, with removal of bladder and ureteral transplantations, with or without hysterectomy and/or abdominoperineal resection of rectum and colon and colostomy, or any combination thereof) with modifier -62 (Two surgeons), because one surgeon performed the exenteration and the other performed the ileal conduit. The ileal conduit is bundled into code 51597 and can't be unbundled and separately billed.
The bilateral lymphadenectomy (38770-50) is not included in the definition of 51597 nor is 38770 bundled into the CPT code, which means it should be reported and paid separately. For Medicare and other carriers, the following coding scenarios correctly represent the procedures you described above:
The surgeon bills 51597-62 and 38770-50, and the co-surgeon bills 51597-62 and 38770-50-80 to indicate that the co-surgeon acted as an assistant for the lymphadenectomy.
The surgeon bills 51597 and 38770-50, and the co-surgeon bills 51597-80 and 38770-50-80.