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Know the risks before meeting with compliance vendors

Radiology Administrator's Compliance and Reimbursement Insider, April 1, 2008

Vendors who want to sell you equipment or drugs that will allow your radiologists to perform a new procedure, or perform an old procedure differently or more accurately, often come armed with coding and reimbursement advice.

As part of their pitch, these vendors will often claim that the new procedures their product will allow you to perform will help your practice quickly recoup the cost of the product—and they’ll even give you the CPT codes to use to maximize your reimbursement.

The problem is that this coding and reimbursement advice could be incorrect. And if your practice relies on incorrect information when making purchasing decisions, the consequences could be dire, both on the business front and the compliance front.

Vendors of drugs, devices, and equipment have one purpose, and that is to sell your practice their product. So anything the vendor says about the product should be considered in a critical light. Objective information is crucial to making a good decision.

Physicians intuitively know to ask for any relevant studies or articles in the medical literature describing the product and its usefulness. And often, physicians will poll colleagues about their experience with the product and do their own research about the product’s clinical value before making a purchasing decision.

Yet these same physicians will often rely on the vendor’s assertions about reimbursement and eventual cost-effectiveness and never think to check the accuracy of the information.

Two main problems can arise if you don’t independently verify information regarding the reimbursement available for using a product and the proper way to code for its use:

➤ The product won’t be cost-effective. Sometimes, a product is medically useful, but it costs the practice money to use it. For example, a vacuum-assisted percutaneous breast biopsy system can make breast biopsies quicker, increase the chances of getting a good -sample, and therefore make life easier for the radiologist and the patient. Vendors tout this aspect, but they often fail to mention—or they misstate—the high cost of supplies. And they don’t say that Medicare reimbursement for the supplies used with every biopsy is so low that most practices lose substantial money—$50–$100—with every biopsy they do on a Medicare patient. Also, the vendor probably won’t mention that the practice can’t bill a Medicare patient for the shortfall. So a practice that sees a lot of Medicare patients should consider these factors when it considers buying this biopsy system.

The practice may still decide that the benefits to its radiologists and patients outweigh the financial loss, or it may decide to wait until reimbursement improves or supply costs decrease before buying the system. Regardless of its decision, a practice that doesn’t consider these factors before buying the equipment is in for a shock.

➤ Bad information creates compliance issues. Vendors will often advise using certain CPT codes for the procedures you can perform using their product. But what if this coding advice is incorrect? You could end up being audited or asked to return large sums to a payer—you might even get into trouble with the Medicare program. Asserting that you relied on the vendor’s advice won’t cut you any slack from the authorities. Yet physicians especially are often insistent that coders use the codes the vendor suggested.

As a result, some practices have been forced to repay large sums because they relied on improper coding advice from vendors. For example, in 2003, Medicare received so many incorrect codes for placement of a vascular closure device, including codes for surgical repair of blood vessels, that CMS issued its own code to try to clear up the confusion.

Setting a policy

Practices that want to stay competitive are constantly on the lookout for new procedures to add to their offerings. And that means they’ll always be in the market for products that will help them do this.

To avoid situations like the ones described above, you should adopt a policy regarding the purchase of new products. The key to making an appropriate decision is to get full information. In delegating those information-gathering tasks, you, as administrator, should establish a policy that plays to everyone’s strengths.

The following steps should be taken:

1. Assign a radiologist to investigate the clinical efficacy of any product that your practice is considering using to perform a new procedure or do a procedure differently.

2. Determine whether any special supplies, drugs, or storage procedures will be necessary if you buy the product and, if so, get an idea of the costs involved.

3. Research the appropriate coding and expected reimbursement for the procedure. Two valuable resources are the AMA and specialty societies such as the American College of Radiology and the Society of Nuclear Medicine. AMA members (or others who pay a fee) can submit coding questions to the organization, and many specialty societies have a coding resource person or committee to assist members. Monitoring online discussion groups will often provide advance warning about reimbursement issues related to new technology.

4. Contact your major payers, as well as Medicare, to determine how they expect you to code the new procedure—and to get a sense of the reimbursement amounts these payers offer.

Your practice should not make any purchasing decisions until all this information has been gathered.

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