Multi-Stent Multi-Vessel Procedure Coding Alert

While the new ICD-9-CM codes are obviously positive news, the downside is the estimated amount of time required to implement a change (Target date CMS FY 2008 that begins October 1, 2007: see Table 1). The upside is that the new coding convention provides an opportunity to potentially secure incremental reimbursement from your private payors in the near term or to amend your existing agreements to make negotiated pass-through or carve-out reimbursements less administratively intensive. Negotiate and Monitor: 2 strategies As operating margins began to shrink at hospitals, cost reduction initiatives were introduced into organizations, allowing well-informed members of upper management to collaborate with departmental clinical leaders to maintain profitability. The elimination of unnecessary costs and the utilization of process improvements helped to improve profitability, but the realization soon set in that the majority of excess costs have been eliminated and margins are continuing to deteriorate. Management's focus soon turned towards finding a strategy to enhance the net revenue stream. Upon reviewing the near-term opportunities, it was keenly understood that there is little prospect to obtain incremental reimbursement from governmental payors such as Medicare and Medicaid. To enhance and protect an organization's net revenue stream, facilities should make use of a formal process to ensure that the facility is being adequately reimbursed under their various private payor agreements. Management should adopt a negotiation strategy that affords the organization incremental reimbursement when new medical devices, procedures, or pharmaceutical are introduced. Management should also provide an automated contract management system that facilitates the analysis of a payor's compliance to the agreement, as the claims are adjudicated. Unexpected Costs: Administration Yet as the search for incremental net patient service revenue (NPSR) intensified, so did the complexity of the business terms negotiated into the private payor agreements. Pass-throughs or carve-outs (amounts paid in addition to the agreed upon per diem or case rate for new technologies or high-cost pharmaceuticals) became a widely used contracting strategy in the agreements. The common pitfall for hospitals was that the administrative costs of integrating these billing changes were overlooked. The most frequent problems were that the existing billing and contract management software required programming changes to process and analyze the claims correctly or significant manual intervention was required to get the claim accepted by the payor. Unfortunately, this was usually not discovered until after the agreement was executed. Problems with administering these terms were not unique to the provider. Payors arrived at their own set of issues in dealing with exception processing of claims for pass-throughs. The usual result was that either the per-unit NPSR modeled during the contract negotiations was never fully realized by the hospital, or additional costs were incurred by the provider to secure the incremental reimbursement, thus reducing the positive impact of the negotiated pass-throughs or carve-outs. A Sound Idea Stumbles Under Historical Costs Problem Apart from the administrative burden of operationalizing pass-through payments, the business concept is fundamentally sound. The provider is reimbursed an additional amount when using an innovative technology or pharmaceutical that is anticipated to have a positive effect on patient outcomes. Yet most private payor contracts are negotiated based on historical costs and do not contemplate the addition of breakthrough devices such as the drug-eluting stent. One of the biggest challenges with fixed rate contracts such as DRG (like Medicare) or per diem-based agreements, is that the charge data used to set current rates are from patients treated two, three or even four years ago. Revenue problems are exacerbated when multi-year fixed rate contracts do not contain an automatic inflator clause or when a change in clinical practice requires the consumption of significantly more resources than previously experienced when the claims sample was initially reviewed as part of the contract negotiation process. Maximum protection is afforded the organization if the facility negotiates a contract that utilizes a percent of billed charges in the business terms section of the agreement. Unfortunately, this idea will probably not be well-received by the private payor since the majority of risk has been transferred to the payor. An alternate approach is to review existing and proposed coding conventions to determine if there is a way to track essential coding information that is already submitted to the payor and would provide enough documentation with which to process an incremental reimbursement. Is there a way to combine the relative administrative operational ease of a DRG or per diem-based contract with the incremental reimbursement afforded the facility by establishing pass-throughs or carve-outs? This opportunity is on the horizon with stenting procedures! Gathering Data to Support Changing DRGs At the ICD-9-CM Coordination and Maintenance Committee Meeting, held on October 7, 2004, a recommendation was put forth to establish Procedure Codes allowing for the tracking of the number of vessels treated, as well as the number of stents inserted. CMS formally proposed these codes in the Federal Register, dated May 4, 2005 (see Table 2). Barring an unforeseen event, these codes will be confirmed when the Inpatient Final Rule is released in early August 2005. At this time, it is anticipated that the codes will be effective for discharges occurring on or after October 1, 2005. Although new DRGs for bare metal and drug-eluting stent procedures with AMI (Acute Myocardial Infarction), with and without comorbidities and complications have been recommended in the proposed rule (see Table 3), the multi-vessel/multi-stent procedure codes will not be considered in the DRG assignment. The intended use of the codes in CMS FY 2006 will be to gather charge data required to support a change in the structure of the DRGs. Near-Term Relief Options While this is positive news on a longer-term basis, what can be done in the near term to enhance your organization's profitability? We suggest that your facility's contracting team analyze its existing private payor contracts to determine if the new coding convention provides an opportunity to gain a competitive reimbursement advantage. Private payors have the latitude to incorporate changes into their claims processing system in the near-term. The question becomes, does your organization have enough negotiation leverage to request an immediate change or is it a better option to summarize the data and present it to the payor during your next scheduled negotiation process? The summary outlines sample recommendations and provides a negotiation strategy for each opportunity. In summary, it is very clear that all of these options require an in-depth review of the specific circumstances at your facility, including an analysis of the billing software by your Information Management team. This article is being written now in order to provide you with as much time as possible to consider the incorporation of these recommendations into your private payor agreements. The advanced notice of these coding convention changes will hopefully get your organization more accurate reimbursement from private payors, in addition to ensuring that accurate claims data is submitted to CMS in validating the health policy request to establish new multi-vessel/multi-stent DRGs. Email: dbanko@crdus.jnj.com

1. Federal Register, Part II Department of Health and Human Services Centers for Medicare & Medicaid Services, May 4, 2005:23305-23774.