Thursday, April 14, 2011

Medicare Fee schedule: Bilateral surgery indicator for 77071 changes from 3 to 2

A small status-indicator change could cost you $46 per claim.

It's difficult to fathom what each quarter will unravel in the form of Medicare updates. As such, this month (April) you need to stay in tune with the latest on physician fee schedule news.

New: The bilateral surgery indicator for 77071 has changed from 3 to 2.

While the effective date is January 1, the implementation date is April 4 this year. This means that the changes are retroactive to January 1 but the deadline for your carrier to implement the changes is April 4.

Previous way: 3' Offered Payment for 2 Sides

Earlier, 77071 used to have a bilateral indicator of 3. Under the Medicare fee schedule, a bilateral surgery indicator of 3 in essence means that when you code the procedure as bilateral, the carrier will reimburse you separately for each side.

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

What's more, 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 prior to applying any multiple procedure rules."

New way: '2' says 1 code covers bilateral service

Since code 77071 now has a 2 bilateral indicator, you will need to be sure your payment expectations are in line with the official fee schedule.

Indicator 2 rule: When CMS labels a code with a 2 bilateral indicator, relative value units are already based on the procedure being carried out as a bilateral procedure.

Therefore, if you report the procedure two times 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

    Change's impact: This could be a big drop for practices that were collecting twice the reimbursement and now will get no payment adjustment. But again as the descriptor refers to inclusion of the contralateral joint, it would be difficult to argue the fact that the code is inherently bilateral.

    Good tidings: The change is retroactive to January 1; however Medicare is not requiring contractors to search their files to adjust claims they have already paid. However contractors will adjust claims if you bring them to their attention.