Revenue Cycle

MPPR to apply for certain diagnostic imaging procedures for Method II CAHs

Medicare Update for CAHs, February 8, 2012

On January 26, CMS issued a transmittal that implements the multiple procedure payment reduction (MPPR) for physician services for certain diagnostic imaging procedures in critical access hospitals (CAHs). Many facilities may not yet be aware of this implementation so CAHs billing under Method II need to take immediate notice, according to Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc.

Section 1848(c)(2)(K) of the Social Security Act was added into the Affordable Care Act, thus specifying that the Secretary will identify potentially misvalued codes by examining codes that are frequently billed in conjunction with furnishing a single service. As a result of this examination, Medicare is making a change to the MPPR for physician services of certain diagnostic imaging procedures, according to MLN Matters article MM7684.

The release of transmittal R2395 applies the MPPR to physician services of certain diagnostic imaging procedures billed by CAHs that had elected the optional method (Method II) for outpatient billing. Payment made to the CAH for physician services billed on its outpatient claim form using revenue codes  96X, 97X, or 98X  is based off of the Medicare Physician Fee Schedule (MPFS) supplemental file, according to the transmittal.

“Although this is good news for patients, since they will pay less out of pocket for the professional fees related to the imaging studies, this change could have a significant impact on CAHs that do a high volume of these services,” says Mackaman. “When looking at the list in attachment 1 (of the transmittal) it is quite lengthy and includes the highest-paying imaging services such as MRIs and CTs with and without contrast, as well as angiography.”

She continues, “A 25% reduction on the lower paying multiple service(s) does not seem like much until you consider how often a hospital provides multiple imaging services during the same session, both for high quality care and for the convenience of the patients. Hospitals should analyze their volume reports, imaging services combinations and payments for those services to anticipate the financial setback to their facilities.”

When the reduction is applied, the remittance advice will show a claim adjustment reason code of 59 (Processed based on the multiple or concurrent procedure rules) and a Group Code of CO (contractual obligation). In addition, deductible and coinsurance are based on the reduced amount, but the 115% add-on after deductible and coinsurance still applies, according to CMS.

The application of the MPPR for diagnostic imaging will apply to the professional fee when multiple services are furnished by the same physician to the same patient in the same session on the same day. Full payment is made for the service that yields the highest payment under the MPFS, and for subsequent services, payment is made at 75%.

Even though the implementation date for the FIs/MACs  to begin paying the reduced amount is not until July 2, 2012, the effective date for providers is January 1, 2012. Once the Medicare contractors update their systems to align with this change, hospitals will begin to see the reductions in payments, says Mackaman.

In addition, she added: “It is unclear from the transmittal if contractors will mass adjust claims with dates of service from January 1 forward, so until the claims processing systems are updated hospitals should monitor related transmittals for more information.

“It is not uncommon for CMS to direct contractors to ‘reprocess claims brought to their attention’ and thereby leaving the CAH responsible for resubmitting claims for the proper reimbursement, which would include copayment refunds to their patients as well.”

The current list of codes subject to the MPPR on diagnostic imaging can be found in attachment one of transmittal R2395CP.

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