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Q/A: Reporting allografts with 153xx code series

APCs Weekly Monitor, October 21, 2011

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Q: Physicians at our facility use allografts (e.g., GRAFTJACKET™) in surgical procedures such as breast reconstruction and arthroplasty (“anchovy”) procedures. How should we report the use of the allograft with the 153xx code series?

A: If a physician uses these allografts inside the body, Medicare considers them a supply/implant rather than an allograft.

In your example, the surgeon implanted the allograft into the joint space as part of an arthroplasty procedure. In this situation, do not report codes from series 153xx. CPT® guidelines indicate that 153xx procedures involve “application of a non-autologous human skin graft … to resurface an area” and are intended to report application of skin substitutes that rest on top of the skin (i.e., replacing the patient’s skin).

When items such as allografts are used during a surgery such as an arthroplasty, they are considered supplies and are integral to the surgery. Therefore, do not report a separate procedure. Consult your FI/MAC whether it has published a Local Coverage Determination (LCD) for use of these substances.

Do not assign a HCPCS code for an allograft used in this manner; these codes are assigned status indicator K for CY 2011. CMS said in the following October 2008 update to OPPS (Transmittal 1599):

When medical and surgical supplies described by HCPCS codes with status indicators other than “H” or “N” are provided incident to a physician's service by a hospital outpatient department, the HCPCS codes for these items should not be reported because these items represent supplies. Claims containing charges for medical and surgical supplies used in providing hospital outpatient services are submitted to the Medicare contractor providing OPPS payment for the services in which they are used. The hospital should include charges associated with these medical and surgical supplies on claims so their costs are incorporated in ratesetting, and payment for the supplies is packaged into payment for the associated procedures under the OPPS in accordance with 42 CFR 419.2(b)(4).

Also consider evaluating and trending the use of these types of graft materials. If surgeons at your facility use these allografts/supplies frequently, consider reviewing these cases and the charge structure to ensure that you capture and report their total cost.

Editor’s note: Denise Williams, RN, CPC-H, director of revenue integrity services at Health Revenue Assurance Associates, Inc., in Plantation, FL, answered this question.

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