The federal government seems to love applying acronyms to its various departments and policies, and the Centers for Medicare & Medicaid Services is no exception. CMS’s alphabet soup-like policies and programs are used to ensure that Medicare dollars are protected for appropriate use. Several have been used or will be used to address some of the areas urologists have seen as profitable, as this article will discuss.
As is common in any market, urologists, seeing a potential for profit, tend to expand into profitable areas. Medicare sees the billing pattern change and begins to investigate. Once an area is identified as being unreasonably profitable, Medicare begins to adjust regulations, coding combinations, and the allowed amount paid. These adjustments take many forms.
LCA, ASP, and CAP:
Physicians who profited from purchasing and providing drugs for their patients were on the Medicare radar screen for years. CMS intervened through the implementation of the least costly alternative program (LCA), the average sales price (ASP) used to determine reimbursement, and implementation of the competitive acquisition program (CAP). For urologists, this is probably the most painful example of Medicare cost containment at work.
MUE:
Medically Unbelievable Edits (MUEs) are proposed at this point. These edits are targeted to control unreasonable billing of services in terms of number, frequency, or amount for several pathology, radiology, and supply codes. They are recommended to reduce the profit from pathology services by limiting the number of payable specimens for prostate biopsy. AUA and other organizations were successful in getting the edits re-evaluated. Currently, they are on hold.
LCD and NCD:
Published by each carrier after review, Local Coverage Decision (LCD) is the policy introduced to regulate payment parameters for services at the state/local Medicare carrier level. National Coverage Decisions (NCDs) are similar policies released by CMS to be applied across the United States.
Limiting payment for PSA testing to certain specific diagnoses is an example of an NCD. Both NCDs and LCDs can address payment through price regulation, such as the policies for LCA for LHRH agonists (currently an LCD only). Policies also can limit the frequency of certain tests, such as number of times per year a bone or bladder scan can be done. LCDs and NCDs also can provide coding restrictions dictating which codes should be used for a particular procedure or limiting the diagnoses for which payment is allowed. Policies concerning intensity-modulated radiation therapy, which are being developed, are an example of this type of policy.
CCI:
The Correct Coding Initiative (CCI) is developed nationally by CMS. The CCI bundling package is adjusted quarterly, adding coding combinations for services provided at the same time for which one CPT code payment is considered adequate.
PE:
The practice expense (PE) value is the value assigned to each CPT code to pay for supplies and office expenses. It regulates part of the total allowed amount reimbursed by Medicare. It has been used to provide and to remove incentive for services delivered in the office setting.
Urologists must pay close attention to all of the above rules in order to bill appropriately for their services and to perform strategic planning for the future.
OIG:
When all else fails, Medicare resorts to punitive measures through channels such as the Office of Inspector General. The actions taken by the OIG are well publicized to serve as a deterrent.
P4P:
Data collection guidelines for determining quality and appropriateness of care are under way. Pay for performance is being implemented in some areas by some payers in the private sector. Medicare is currently conducting a number of pilot programs and is expected to roll out a national program in the next year. Quality of care is the stated goal of pay for performance. However, the driving force is the potential for cost containment. It is anticipated that a significant percentage of the health care dollars being spent can be saved by determining and enforcing appropriateness of care and by preventing wasteful imaging, high-priced drugs, costly devices, and the like. Anything considered to be health care profiteering is being targeted.
Major U.S. employers are demanding that insurance companies identify physicians who are cost efficient and will be referring their employees to those physicians. Computer algorithms derived by the third-party payers are identifying high-quality, cost-efficient practices and are paying these physicians at a higher rate as an incentive. Patients are being given incentives to go to these physicians.
Health care reform has begun. It’s starting with an attempt to control physicians’ practices. The data collection that is occurring today prevents us from continuing to practice as an island. It allows payers to look at precisely what we do and when we do it and provides them with data to identify outliers in cost. The payers plan to create change among those providers through incentives or through selective referral, isolating costly physicians.
In the HMO area, health care reform initially changed physician behavior by deselection. Now we’re moving into the era of plan discrimination.
You will have to pick and choose your opportunities. The overarching considerations to build into the equation are the growing number of patients who are reaching the age when urologic diseases develop and the shortage of urologists that looms in the foreseeable future.
These factors, coupled with the need to be cost efficient in treating any disease process, should be considered in planning new services.
Physicians’ cost efficiency is being judged by all costs, not their individual service fees alone. The cost of performing a procedure in your office may cost the payer significantly less than doing the same procedure in the hospital. For example, the insurer will look at your practice and the overall cost of patients diagnosed with BPH or the overall cost for patients with prostate disease to determine what tests and treatments cost the least.
As you look toward the future of your practice, you need to take all these issues into consideration. The legality of any expansion should be thoroughly researched, and the project should also feel ethical. Once the legal questions have been answered, the practice must consider the investment required and the time to return on investment. Largely profitable services today may not be as profitable in 6, 8, or 12 months, when new rules or regulations are introduced. As new technology is introduced, opportunities to expand will continue to arise, but most practices are not capable of pursuing all these opportunities.
All these changes make for interesting planning. It’s time to start thinking globally about your practice.
Urologist Ray Painter, MD, is president of Physician Reimbursement Systems, Inc., in Denver and is also publisher of Urology Coding and Reimbursement Sourcebook
Mark Painter is CEO of PRS Urology SC in Denver.
Disclaimer:
The information in this column is designed to be authoritative, and every effort has been made to ensure its accuracy at the time it was written. However, readers are encouraged to check with their individual carrier or private payers for updates and to confirm that this information conforms to their specific rules.
