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New Medicare billing rules for LOCM

Radiology Administrator's Compliance and Reimbursement Insider, June 1, 2005

By Jackie Miller, RHIA, CPC

In a move welcomed by providers, CMS expanded its coverage of low osmolar contrast material (LOCM) in the nonhospital setting, effective April 1. However, the agency has also given nonhospital providers a new set of HCPCS codes that must be used to bill for the contrast.

In the 2005 final rule for the Medicare Physician Fee Schedule (published in the November 15, 2004, Federal Register), CMS announced it would eliminate its longstanding coverage restrictions for LOCM. In the past, Medicare covered LOCM only for intrathecal use, or when the patient had one of several risk factors, including previous allergic reaction to contrast. Those rules were instituted in the early 1990s, at which time CMS believed that high osmolar contrast-which is less expensive than LOCM-could be safely used for most Medicare patients. Since then, however, LOCM has become the standard of care and is used by many providers for all contrast exams, even when the patient does not have risk factors. For this reason, CMS decided to begin allowing unrestricted coverage of LOCM. In the final rule, the agency noted that this "would make Medicare payment for LOCM consistent across settings since, under [the hospital Outpatient Prospective Payment System], there is no longer a payment difference between LOCM and other contrast materials."

As of April 1, payment for LOCM is made under the mechanism prescribed by the Medicare Prescription Drug, Improvement and Modernization Act of 2003 for drugs and biologicals. Providers will be paid 106% of the average sale price (ASP) for the contrast. CMS will calculate the ASP quarterly using data submitted by drug manufacturers. The current ASP file can be found at www.cms.hhs.gov/providers/drugs/asp.asp .

CMS originally proposed to deduct 8% from providers' payments for LOCM because the technical component payment for the exam already includes payment for high-osmolar contrast. The agency initially believed that this reduction was necessary to avoid duplication of payment for LOCM. However, CMS announced in its final rule that it would pay providers the full amount for LOCM (i.e., 106% of the ASP). CMS noted that it was unable to accurately determine the amount of duplicate payment that might occur under the new policy.

The final rule also indicated that CMS was exploring the possibility of establishing new HCPCS codes for LOCM in order to "accurately capture the cost differences among all contrast agents, as well as the differing clinical uses, concentration, and dose administrations." As a result, CMS on March 11 issued Transmittal 502/Change Request 3748 (www.cms.hhs.gov/manuals/pm_trans/R502CP.pdf ), which establishes 13 new codes for contrast agents, including LOCM.

Note: These new codes are not for use by hospitals. Hospitals will continue to report LOCM on outpatient Medicare claims with the "A" codes that are currently used by all providers.

Just as with the A codes, providers will select the new code for LOCM based on the concentration of iodine in the contrast agent, not on the dosage of contrast that was administered. For example, contrast with 350 mg of iodine per ml (e.g., Omnipaque 350) will be reported with code Q9950, "Low osmolar contrast material, 350 mg/ml-399 mg/ml iodine concentration, per ml."

The units will be reported based on the volume of contrast that was used. For example, if the patient receives 200 ml of an agent with 350 mg of iodine per ml, the provider will report 200 units of Q9950.

The transmittal also includes new codes for contrast agents for magnetic resonance imaging:

Please see the transmittal for full descriptions. As of press time, CMS had not announced any changes in its current payment policies for these agents.

Finally, the transmittal includes new codes for contrast agents used in echocardiography:

Code A9700 will continue to be used for echocardiography contrast agents that do not meet the description for the new Q-codes.

Nonhospital providers who bill for LOCM should watch for instructions from commercial payers and managed care plans as to whether LOCM should be billed to these payers using the new codes or the old "A" codes. n

Jackie Miller, RHIA, CPC, senior consultant, Coding Strategies Inc., 5041 Dallas Hwy., Ste. 606, Powder Springs, GA 30127; 770/445-5566; jackie.miller@codingstrategies.com.

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