Health Information Management

Coding for breast reconstruction can be complicated

APCs Insider, February 27, 2003

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February 28, 2003
Vol. 4, No. 8

Operation Cataract

In 19th century medicine, how were cataracts treated?

The answer will appear in next week's APC Weekly Monitor, or be one of the first five to e-mail the correct answer and win a free cup of coffee!

A sneeze can exceed speeds of
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Keith Siddel,
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HRM, Hospital Resource Management

Cheryl D'Amato,
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Julia R. Palmer
Health Information Management Division of HRM

Valerie Rinkle, MPA,
revenue cycle director
Asante Health System





OIG recommends equalizing outpatient rates

After-cataract laser surgery in a hospital outpatient department (OPD) receives a reimbursement rate of $245.67.

The same after-cataract laser procedure performed in an ambulatory surgical center (ASC) has a payment rate of $433.

The significance of the nearly $200 difference swells when nearly twice as many after cataract surgeries occur in ASCs, where CMS pays the higher rate of reimbursement.

In an effort to determine the overall impact of such disparities, the Inspector General (OIG) compared the payment rates between ASCs and OPDs for 424 different procedure codes in 2001.

The report showed that reimbursement disparities resulted in an estimated $1.1 billion in additional Medicare payments.

Failure to remove certain procedure codes from the list of ASC-approved procedures resulted in an estimated Not only do payment rates between OPDs and ASCs vary, but the OIG expressed concern that the rates do not reflect accurate costs for performing procedures.

The OIG has recommended that CMS petition Congress for the authority to set rates that are consistent across sites and reflect only the costs necessary for the efficient delivery of health services. While the goal is closing the gap on the difference in rates, the OIG believes CMS could reduce payments without creating equal rates. For example, 144 procedure codes varied by more than $300. If CMS limited the amount of difference to $300, it could have reduced payments by $352 million. If CMS chose $400, it could have realized approximately $188 million in savings.

In a response dated December 4, 2002, CMS said it would consider the recommendations and determine how best to proceed to implement changes.

"While we believe that further comparability is desirable, how to achieve it without compromising the internal logic of each payment system is not obvious," wrote CMS Administrator Thomas A. Scully.

However, CMS is still operating the ASC payment system based on 15-year-old data, and a review of a CMS draft final regulation revealed that only six of the 72 procedure codes recommended for deletion have been removed. Consequently, procedure codes meeting CMS's criteria for removal from the ASC-covered procedure list will continue to be reimbursed as covered procedures.

  • Check out the March issue of Briefings on APCs for information on new modifiers, how to overcome OPPS hurdles, and new clinical trial codes.

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The "Monitor" is a complimentary companion publication, with a specific mission: to provide answers to your tough questions about the APC regulations.

If you have a question about APC coding that you would like addressed in the "Monitor," post it on our Web site at Each week, our team of experts answers questions that will appeal to the majority of readers. The elected questions and their corresponding answers are delivered to your inbox every Friday.

Coding breast reconstruction is complicated


We have patients who present to the ED per physicians' requests to insert a foley, replace a peg tube, change a dressing, etc. In such cases, is it appropriate to bill for an ED visit and the procedure that was performed? These patients are registered as outpatients rather than as ED patients.


Prepare for CMS to move quickly in outlier investigations


Our hospital was recently denied payment on the following charges for a breast reconstruction due to mastectomy:

The patient received a revision second stage transverse rectus abdominis muscle (TRAM) flap, including excision fat necrosis, upper pole excision superior TRAM flap paddle, and suction-assisted lipectomy as a lateral TRAM inframammary plication to raise the inframammary fold 2cm.

The hospital coded 19380 and 15877, and the physician's office coded 19367. The doctor's office was paid and the hospital was not. What should we have done?


According to Coding Clinic, Fourth Quarter, 2001, the first listed diagnosis code should be V45.71, acquired absence of breast, with code of V10.3, personal history of malignant neoplasm, breast. V45.71 is an acceptable first listed V code; effective October 1, 2001, the Medicare Code Editor edit was removed for this code as an unacceptable principal diagnosis.

We recommend the claim be resubmitted with these diagnosis codes. These codes correctly convey the patient previously had a mastectomy due to breast cancer, and that the patient is being seen now for a revision of the previously reconstructed breast and nipple areolar reconstruction. Blue Cross and Blue Shield of North Carolina covers reconstructive breast surgery due to breast cancer. Go here to read the official policy.

You may need to send copies of the patient' s medical record to establish medical necessity. If your claim is rejected a second time, try sending a copy of the Coding Clinic referenced above to show you are following correct coding policy.

We agree with CPT code 19380, revision of reconstructed breast, as assigned by your facility, but also assign 19350 for the nipple/areola reconstruction. We would not assign 15877 for the suction assisted lipectomy as we believe it is already included in 19380. Per the operative report, the suction assisted lipectomy was performed because the TRAM flap was "too bulky, " thereby contributing to the revision.

We do not agree with the physician's office CPT code 19367, breast reconstruction with TRAM flap. This code indicates a TRAM flap was performed currently and that is not the case. The TRAM flap was performed previously and is now being revised.

Also, it is interesting to note per Medicare APCs (although this is not a Medicare patient), CPT codes for TRAM flap breast reconstructions are designated as "inpatient only procedures." This procedure was performed as an outpatient.

Questions from readers are answered by a team of experts working in the APC area within the health care industry. Their answers are provided as advice. Readers should consult the federal regulations governing OPPS, related CMS sources, and with their local fiscal intermediary before making any decisions regarding the application of OPPS to their particular situations.



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