Health Information Management

CMS adds new modifier -PD, two edits, and additional APCs

JustCoding News: Outpatient, March 7, 2012

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Modifier -PD (diagnostic or related nondiagnostic item or service provided in a wholly owned or wholly operated entity to a patient who is admitted as an inpatient within three days or one day) is now included in the Integrated Outpatient Code Editor (I/OCE), according to January updates detailed in Transmittal 2370.

"This is one of the real sleepers in this release," says Dave Fee, MBA, product marketing manager of outpatient products at 3M Health Information Systems in Murray, UT. "When you think of a new modifier, you don't think of it as a big deal."

That's not the case with modifier -PD, he says. Here's why: A hospital wholly owns or wholly operates a clinic or an ambulatory surgery center (ASC). A patient receives services at the clinic or ASC.

So far, so good.

However, if the patient is admitted to the hospital within three days, the services provided by the other entity must be included as part of the inpatient stay.

A problem arises when the clinic or ASC is wholly owned by the hospital but not provider-based. Provider-based clinics bill through the hospital, and both information management systems are tied together. A non-provider-based clinic or ASC is freestanding and has its own information management system and billing practices. The freestanding clinic or ASC also submits bills on its own. "They're really almost independent, but they happen to be wholly owned," Fee says.

Because the freestanding facility doesn't share information systems with the hospital, the hospital may not know when the three-day rule applies unless the patient mentions that he or she had previously received services at the freestanding facility.

"How do you know if they had a minor service provided somewhere else unless they mention it?" Fee says. "It really speaks to the need to have an enterprise-wide [electronic health record]."

Providers should expect additional guidance about modifier -PD to clarify some of this confusion, Fee says. "I think all of the rules are still settling out, so we need to keep a close eye on this," he says.

New edits
CMS added two new edits to the I/OCE: edit 84 (claim lacks required primary code [return to provider]) and 85 (claim lacks required device code or required procedure code [RTP]).

Edit 84 creates an interesting interplay between CPT® codes 33225 (insertion of pacing electrode, cardiac venous system, for left ventricular pacing, at time of insertion of pacing cardioverter-defibrillator or pacemaker pulse generator [including upgrade to dual chamber system]) and 33249 (insertion or repositioning of electrode lead[s], for single or dual chamber pacing cardioverter-¬defibrillator and insertion of pulse generator), Fee says.

The codes have Q3 status (codes subject to payment as part of a composite); however, they are not truly composites. Code 33225 is an add-on code, so facilities must bill it with the appropriate primary code. If a facility bills codes 33225 and 33249 together, CMS will only pay for 33249 and package 33225 into the payment. However, if a facility bills code 33225 with a different primary code, CMS will pay for both.

"They are like composites, but they are not actually composites" Fee says. "They are conditionally paid, but the composite flag is not set."

Edit 85 applies mainly to HCPCS codes C9732 (insertion of ocular telescope prosthesis including

removal of crystalline lens) and C1840 (telescopic intraocular lens). Facilities should report these two codes together. If a facility bills one without the other, it will trigger the edit and prevent payment.
The only exceptions occur when certain modifiers are appended. These include modifiers -52 (reduced services), -73 (procedures discontinued prior to anesthesia), and -74 (procedures discontinued after anesthesia administration or after the procedure has begun), Fee says.

APC changes
CMS added only 28 new APCs to the list, which is not an extensive number, Fee says. It does, however, bring the total number of APCs to 850. Many of the new APCs are related to pharmaceuticals, which seems to be a trend, he says.

CMS reassigned 15 APCs from status indicator G (pass-through drugs and biologicals) to status indicator K (non-pass-through drugs and biologicals). In addition, APC 00668 moved from status indicator S (significant procedure, not discounted when multiple) to status indicator T (significant procedure, multiple reduction applies).

Codes that require two devices
Codes 0238T (transluminal peripheral atherectomy, including radiological supervision and interpretation; iliac artery, each vessel) and 33249 now require two device pairs to satisfy edit 71 (claim lacks required device code). This is important to note because codes rarely require two devices to bypass the edit, Fee says.

Code 0238T requires both a permanent device and the leads, while code 33249 requires both the implantable cardioverter-defibrillator and the leads. "We just need to make sure both devices are coded," Fee says.

Reimbursement changes
Although CMS intended to lower the fixed dollar threshold for outlier payments from $2,025 to $1,900, it did not because of an error it made in calculating the update to the 2012 outpatient prospective payment system (OPPS). The threshold is currently $2,025. "That's one of the changes that came out well after the fact," Fee says. (For more information, see 77 Federal Register 218.)

However, CMS did change the reimbursement rate for drug codes having status indicator K to average sales price plus 4%.

Code changes
CMS added four codes to the list of male procedures:

  • G8822, male patients with aneurysm minor diameter greater than 6 cm
  • G8828, aneurysm minor diameter less than or equal to 5.5 cm for men
  • G8829, aneurysm minor diameter of 5.6–6.0 cm for men
  • G8830, aneurysm minor diameter greater than 6 cm for men

CMS added 15 codes to the list of female procedures:

  • 81266, Comparative analysis using Short Tandem Repeat (STR) markers; patient and comparative specimen (e.g., pretransplant recipient and donor germline testing, post-transplant nonhematopoietic recipient germline; each additional specimen)
  • G8802–G8805, pregnancy test, urine or serum
  • G8806–G8809, transabdominal or transvaginal ultrasound
  • G8810, Rh-immunoglobulin (Rhogam) not ordered for reasons documented by clinician
  • G8811, documentation Rh-immunoglobulin (Rhogam) was not ordered, reason not specified
  • G8823, female patients with aneurysm minor diameter greater than 6 cm
  • G8824, female patients with aneurysm minor diameter of 5.6–6.0 cm
  • G8827, aneurysm minor diameter less than or equal to 5.5 cm for women
  • G8831, aneurysm minor diameter greater than 6 cm for women
  • G8832, aneurysm minor diameter of 5.6–6.0 cm for women

CMS added 11 codes to the conditionally bilateral list, meaning coders can now append modifier -50, when applicable:

  • 0282T–0238T, percutaneous or open implantation of neurostimulator electrode array(s)
  • 20527, injection of an enzyme
  • 26341, manipulation of the palmer fascial cord
  • 29582–29584, application of multi-layer compression system
  • 64633–64636, destruction by neurolytic agent, paravertebral facet joint nerve(s) with imaging guidance

CMS also added two codes for central motor evoked potential studies (95928 and 95929) to the inherently bilateral list. Coders should not report modifier -50 with these codes.

Reordering blood products
Certain blood products cost more than others, and each Medicare patient has a blood deductible amount in his or her benefit, says Fee. When all of the new APC weights and rates are released, CMS reorders the blood products to ensure the most expensive ones are processed first, he says. This priority processing satisfies patients' deductibles. This isn't a big issue, but it is something facilities should be aware of, Fee says.

Editor’s note: This article was originally published in the March issue of Briefings on APCs. E-mail your questions to Senior Managing Editor Michelle A. Leppert, CPC-A, at

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