CPT Coding and Reimbursement Update 2006 NATIONAL VACCINE ADVISORY COMMITTEE

1. CPT Coding and Reimbursement Update 2006NATIONAL VACCINE ADVISORY COMMITTEE Joel F. Bradley M.D. FAAP June 6, 2006

2. OUR GOALS • To Learn About the Reimbursement Systems that Support Vaccine Delivery in the Physician’s Office • Explore Strategies and Progress To Improve the System by Removing/Improving Existing Barriers

3. THE PLAN • The Reimbursement System-Simplified • Vaccine Coding and Reimbursemen • Future Needs/Programs-P4P,CDHP

4. THE POST PRANDIAL STUPOR + A TALK ON CODING = ? NAP

5. Stay Awake- Otherwise You Might Slide Right Out of Your Seat!

7. No Margin-No Mission • Physicians Choose the Best Practices for Quality Care for Children • Then Must Use the Coding and Contracting Systems to Fund the Services • Those Services that are Undervalued May End

8. The Problems and Opportunities • Vaccine Administration Fees • Private Payers • VFC • Vaccine Costs • Vaccine Payment Systems

9. The PROBLEMSVaccine Administration • Vaccine Administration is Undervalued in Many Physician Payment Schedules • Most Vaccines Are Given to Children in the Private Setting • Payment for Vaccine Administration is the Sole Payment for Vaccine Delivery in the VFC Program

10. The PROBLEMSPayment for Vaccine Products • Reimbursement Methodology Has Changed –Average Sales Price • Delays Exist in New Vaccine Coverage by Private Payers • The Number of New Vaccines Has Increased These Problems

11. Vaccine Financing in the Office The Infrastructure

12. HOW PHYSICIANS ARE PAID(KEY TO SOLVING REIMBURSEMENT PROBLEMS)

13. SERVICE  CODE VALUE  RBRVS FEE SCHEDULE EMPLOYER  CONTRACT  PAYMENT

14. 1. THE CODE First…DEFINE THE SERVICE Then…FIND A CODE! (AMA CPT)

15. CODES • CPT CODES • Describes the Service Performed • “What We Have Done” • DIAGNOSIS CODES • Describes the Patient, Condition, or Circumstances • “Who, Why, and the Reason (Medical Necessity) for doing it

16. CPT CODES-”What We Do”Current Procedural Terminology • OWNED/MAINTAINED BY AMERICAN MEDICAL ASSOCIATION (AMA) • BEGAN IN 1966 • OFFICIAL CODE SET FOR HIPAA • REVISED YEARLY –FALL

17. AMA CPT • E/M SERVICES >100 Codes • Evaluation and Management Services • Generally more “cognitive” • PROCEDURES >8000 Codes • Procedures, Surgery,Labs, X-rays etc

18. AMA CPT • LEVEL One-3 Categories • Category I- Billing Codes • Category II- Performance Improvement • Category III- New Technology • LEVEL Two- HCPCS • Non Physician Services • CMS “G” Codes • Drugs/Medications “J” Codes

19. The CPT Process The genesis of a code

20. CPT – THE EDITORIAL PANEL • 17 VOTING MEMBERS • NOMINATED BY SPECIALITY SOCIETY • APPOINTED BY AMA BOARD • 4 AND 8 YEAR TERMS

21. CPT – THE EDITORIAL PANEL • CPT ADVISORY COMMITTEE • 100 SPECIALTY SOCIETIES • EACH HAS ONE ADVISOR • ADVISOR PRESENTS CODE PROPOSAL • PANEL VOTES “yes” or “no”

22. DIAGNOSIS CODESInternational Classification Of Disease • Published by the World Health Organization for epidemiological tracking of illness and injury • The clinical modification (CM) for Billing in the US is maintained by • CMS • National Center for Health Statistics/CDC • American Hospital Association • American Health Information Management Association • Has Its Own Editorial Board

23. What are the ICD-9-CM Codes? • Numeric codes: 3-5 numeric characters representing illnesses and conditions (314.01 - ADHD) • E codes: alpha-numeric describing (external causes of injuries, poisonings, and adverse effects (E 906.0 –dog bite) • V codes: alpha-numeric describing factors influencing health status and encounters with health services (V20.2- well exam in a child)

24. ICD-9 PEDIATRICS 2006 ICD vaccine codes- -Describe the reason for the vaccine (medical necessity), or -Describe the circumstances surrounding the vaccine visit ** Link to the CPT vaccine product and IA code

25. Correct Vaccine Coding 1. Select the Correct CPT Code for the Product –be specific! 2. Correctly link an ICD 9 Code (diagnosis) to the CPT code for the Vaccine 3. Always add the appropriate vaccine administration CPT code considering age, MD counseling, and route/order of administration (and link the same Diagnosis code to this CPT code)

26. 2 month old patient goes to physician office for a well visit, patient receives 1 dose of HIB ( ActHIB) vaccine, DTaP-Hep B-IPV, PCV 7 – with physician counseling. You Report: Coding Examples

27. CPT                                                ICD-9-CM 99391 Preventive visit, established patient V20.2 90648 ActHIB vaccine V03.81 90465 Administration of ActHIB vaccine V03.81 90723 DTaP -Hep B- IPV vaccine V06.3, V05.3 90466* Administration of DTaP-Hep B-IPV vaccine V06.3, V05.3 90669 Pneumo conjugate vaccine V03.82 90466* Administration of pneumo conjugate vaccine V03.82 *Claim would show 90466 as 2 units of service Coding Examples

28. RBRVS Update 2006 Medicare Celebrated 40th Birthday on July 30 2005

29. 2. THE VALUE SECOND…CPT CODES FIND VALUE AMA- RBRVS UPDATE COMMITTEE or “RUC”

30. The RUC Process Genesis of Relative Value for Physicians

31. RUC – THE RBRVS UPDATE COMMITTEE • 29 MEMBERS • 23 SEATS ASSIGNED TO SPECIALTIES • ALSO AMA, AOA, HCPAC, PEAC, CPT PANEL • NOMINATED BY SPECIALITY SOCIETY • APPOINTED BY AMA BOARD • NO TERMS

32. RUC – THE RBRVS UPDATE COMMITTEE • CMS ATTENDS/COMMENTS • RUC ADVISORY COMMITTEE • ADVISORS PRESENT SOCIETY RVU RECOMMENDATIONS ON WORK AND PE • PRESENTATION DATA BASED ON MEMBER SURVEYS or EXPERT PANELS

33. RUC – THE RBRVS UPDATE COMMITTEE • RUC VOTES ON RELATIVE VALUE • RECOMMENDATIONS TO CMS • Physician work rvu • Direct Practice Expense inputs (CMS calculates final PE rvu)

34. 3. THE FEE SCHEDULE (RBRVS) • NEXT….CMS AGREES (90%!), OR… • CAN  OR  • PUBLISHES THE VALUE (FEDERAL REGISTER)-MEDICARE FEE SCHEDULE OR RBRVS

35. RBRVS AND VACCINES Resource Based Relative Value Scale

36. RBRVS-Resource Based Relative Value Scale • Fee Schedule of CMS-Medicare • Used by most ALL Payers • Most CPT codes have a “Relative Value”

37. RBRVS AND PEDIATRICIANS • RELEVANCE TO PRACTICE • IT IS THE BASIS OF HOW Most Pysicians GET PAID!

38. RBRVS by PAYER% WHO USE

39. RBRVS AND PEDIATRICIANS • RBRVS • Began January 1, 1992 ( CPT EM codes) • Authorized by Congress 1989- OBRA ’89 • Revised the Medicare Fee Schedule (1965) • A CPR system(customary, prevalent, reasonable) • Maintains budget neutrality

40. RBRVS AND PEDIATRICIANS • CONCEPT- Services are ranked relative to the costs of the resources used to perform them. • If service A is harder and takes longer, uses more overhead expense of service B, then A will have a proportionately higher value than B.

41. RBRVS-3 MAJOR COMPONENTS • PHYSICIAN WORK • PRACTICE EXPENSE • MALPRACTICE EXPENSE

42. RBRVS AND PEDIATRICIANSMAJOR COMPONENTS

43. PHYSICIAN WORK • PHYSICAN TIME • TECHNICAL SKILL/PHYSICAL EFFORT • MENTAL EFFORT/JUDGEMENT • STRESS-IATROGENIC RISK

44. PRACTICE EXPENSE 1. DIRECT COSTS CLINICAL LABOR,MEDICAL SUPPLIES, AND MEDICAL EQUIPMENT 2. INDIRECT COSTS ADMIN. LABOR,OFFICE EXPENSE, AND OTHER COSTS

45. PLI- PROFESSIONAL LIABILITY INSURANCE • 1-3% of the total rvu • ORIGINALLY CHARGE BASED • RESOURCE BASED SINCE 2000 • BASED ON SPECIALTY SPECIFIC PREMIUM DATA, RISK, AND UTILIZATION

46. OTHER MEDICARE “ADJUSTMENTS” • GPCI • GEOGRAPHIC PRACTICE COST INDEX • ACCOUNTS FOR GEOGRAPHIC DIFFERENCE IN COST OF RESOURCES • 1.0 = AVERAGE. • DIFFER BY AREA (STATE), AND TYPE OF RESOURCE (WORK,PE,PLI)

47. So…. can you take an RVU to the Bank? Total RVU (in units) x Conversion Factor (CF) in $ per rvu = The payment in “$”

48. RBRVS-CONVERSION FACTOR • CMS for 2006- $37.8975 • Formula is Legislated

49. CONVERSION FACTOR$ BY PAYER

50. RBRVS-Relative Value-RVU TOTAL RVU= Work rvu + Practice Expense (pe) rvu + Professional Liability Insurance (pli) rvu • 99213 reference = 0.67 rvu (work) + 0.69 (pe) + 0.03 rvu (pli) = 1.39 total rvu (FOR 2006 non-facility) • Payment- 1.39 x $37.89 = $ 52.68