I have always believed that everyone deserves access to a dermatologist, and because of this belief I have signed with all the insurance plans in New York City where I practice.
As they say, sometimes it’s just not worth it. This sentiment was certainly true during a recent encounter I had with an insurer that notoriously poorly reimburses. I offer my interlude as a learning experience for better understanding bundling and coding for cosmetic services as well as the importance of knowing what it takes to exit a contract with a managed care plan.
Treating My Patient
I recently saw a patient in my practice at Beth Israel Hospital Phillips Ambulatory Care Center. This patient’s healthcare coverage was “provided” through a Medicaid HMO (intentionally unnamed).
The patient seemed content with this price and seemed happy to be treated by me because it had been challenging to find a dermatologist who accepted her insurance. I say “provided” because I have been told that few dermatologists accepted this patient’s Medicaid HMO because of its low fee schedule. This patient had melasma, an intradermal nevus on her nose and a number of skin tags on her body.
I told her I could give her a hydroquinone cream for her melasma but that she would have to pay for me to remove the nevus and tags. She stated that the nevus and tags were growing and bleeding, but I did not note any evidence of bleeding. Deeming these removals cosmetic, I told her I would remove the nevus and tags for $200. From experience, I knew the insurance would not pay for tag removal in any case.
The patient seemed content with this price and seemed happy to be treated by me because it had been challenging to find a dermatologist who accepted her insurance. I removed the nevus and tags, and the patient paid $200 in cash in addition to her $20 co-payment.
Owing My Patient $200
The following day I worked at Roosevelt Hospital’s dermatology clinic. I received an e-mail from the office manager stating that the patient (no name was used) had contacted her Medicaid HMO regarding the $200 charge and had been informed I was not entitled to collect it because under my contract with her Medicaid HMO, the maximum amount that I could charge patients at a visit was their co-payment. Therefore, the insurance company told me I needed to return the $200 to the patient!
Needless to say, I was not happy with this and asked to speak with the contract manager. He explained that I could only collect the co-payment at a visit and that I could not charge for a biopsy and an office visit during the same encounter. This was because the HMO’s contract mandated strict bundling of services so that only one CPT code could be paid for a given encounter. Therefore, all that I was entitled to be paid was approximately $65 for a level 3 new patient visit.
After consulting with my department chairman, he maintained that the $200 had to be returned to the patient, who then came to the office to retrieve it.
So, How Should I Proceed?
Next, I asked her Medicaid HMO how I could charge for cosmetic services.The representative explained that I would have to submit a letter requesting that cosmetic CPT services be paid for by her Medicaid HMO.
Then, if the HMO replied that it did not pay for these CPT, it was then possible that I could charge the patient for the cosmetic services.
I never ascertained what “possible” meant.The Medicaid HMO representative invited me to write a letter requesting payment for the nevus and tag removal but made no promises.
I sent such a letter, and several months later received an additional payment of about $55.00.
Subsequent visits by other patients, however, still resulted in payment only for a visit even if several problems were addressed such as xerosis, nummular dermatitis and destruction of genital molluscum (the insurance wanted pictures of the molluscum before I had treated them — apparently, a detailed chart was totally insufficient to make the procedure medically necessary and, hence perhaps, separately payable.
I have since written a letter resigning from this Medicaid HMO; however, I will only be off the panel 90 days after they have acknowledged the receipt of such a letter because the contract requires a 90-day termination notice.
Bundling and Charging for Cosmetic Services
The case brings up many interesting legal issues — the first one that I will discuss is bundling and charging for cosmetic services.
In 1992, when Medicare implemented the Resource-Based Relative Value Scale (RBRVS) system for physician payment, new modifiers were established within the CPT codes to describe special circumstances related to the performance of multiple services or procedures on the same date.1
The CPT Editorial Panel, which includes representatives of the Blue Cross and Blue Shield Association and the Health Insurance Association of America, agreed with the Health Care Financing Administration, which is the predecessor agency of the Centers for Medicare and Medicaid Services, that these modifiers were crucial in establishing a formalized structure and linkage between CPT coding and this payment methodology.1
CPT coding incorporates modifiers as an integral part of its structure. The use of modifiers allows CPT codes to be adapted for different situations without unduly expanding the code set or making it overly complex.1
Modifiers provide a means to demonstrate that a service or procedure was altered by specific circumstances, but not changed in its definition or code.1 The service or procedure remains the same, but the circumstances of its delivery were altered. Modifiers are explained in detail in the CPT Book and other CPT related coding products published by the AMA such
as CPTAssistant and Principles of CPT Coding.1
The ability of all users to recognize and accept CPT modifiers is important for the implementation of the CPT coding system.1 While acceptance of CPT modifiers is important, the subsequent step involving interpretation of modifiers in a manner that is consistent with established CPT is also critical.1
Despite the creation and existence of modifiers, they are not always recognized.
This can be because an insurance provider has done the following:
1. It has stated in its contract it does not recognize them.
2. It has contracted to recognize them with a physician but does not adhere to its contractual obligations.
Most insurers who fail to recognize modifiers fall into the second category. Apropos of this failure to recognize modifiers, a large class action law suit as been pending in federal court in Miami regarding claims of more than 700,000 physicians that insurance companies downcoded and bundled physician bills.2,3
An Update on Relevant Lawsuits
Aetna and Cigna settled less recently, and it is too late to file a claim against them. Healthnet, Anthem/Wellpoint and Prudential have settled more recently, and you might have received notice to file a claim to get some of this settlement money. If you have received these claims forms, you must file them out and supply any requested documentation to be eligible for a piece of the settlement.
No papers have been mailed out for the Wellpoint settlement because it has not been finalized, and U.S. District Court Judge Moreno has set the final approval hearing for Dec. 2, 2005, for the Wellpoint settlement. You should look into these settlement as you may be able to recover money.
United, Pacificare, Coventry and Humana have not yet settled. Outstanding defendants include United, Pacificare and Coventry.
Feb. 17, 2006, was the claims submission deadline for Humana recovery. The trial date for the remaining defendants has been changed to Sept. 18, 2006.
All class members who practice or live in a county declared a disaster area because of Hurricane Katrina have an additional 60 days to file a proof of claim for the Healthnet settlement.
The issue as best I can determine is that the contracts of these companies stated that they would adhere to AMA/CMS guidelines regarding modifiers and coding and enumerated a certain fee schedule, and that the companies did not adhere to the language and provisions of their contacts with physicians.4
My situation with the Medicaid HMO I discussed in this column is different. The HMO never agreed to recognize modifiers, so it is not legally bound to do so. It is up to the provider to either agree to contract with an HMO or not.
Another insurance that does not recognize modifiers in New York State is the 1199 (hospital workers) benefit plan. Just as the HMO stipulated, the 1199 plan only pays for one CPT code per visit.
Getting out of the Contract
Another important issue to explore regarding my situation with this Medicaid HMO is the issue of how to get out of a contract.
No doctor is compelled to contract with an insurance plan that does not pay well (being on staff at an academic institution where the institution has decided to take certain plans for non remunerative reasons notwithstanding). Yet, on the other hand, once you have contracted with such a plan the contact governs the relationship until it is terminated. Therefore it is important to read an insurance contract before you sign and agree to be on a panel.
Note that I can not just resign from the panel of the Medicaid HMO.The contract requires that either party give the other 90 days notice. Again, this is a term that both parties agreed to, and it is legally binding. I will continue to see Medicaid HMO patients until I am no longer on the company’s panel.
A Complex Issue
The issue of charging for cosmetic procedures is a complex one. My situation illustrates how important it is to carefully read an insurance contract to see how it treats billing patients more than its co-payments. Just by having a patient sign a form that a procedure is cosmetic and not covered by insurance will not insulate a physician from violating the contract with a managed care company.
Sometimes it will be necessary to request an insurance company to pay for service and receive a statement that that service is not in the ambit of the contract before performing the service and billing the patient.
So, carefully read the insurance contracts before you sign, unless you are ready to have terms enforced against you that you do not anticipate or like. The law allows parties to contract freely, exercise your rights wisely.
I have always believed that everyone deserves access to a dermatologist, and because of this belief I have signed with all the insurance plans in New York City where I practice.
As they say, sometimes it’s just not worth it. This sentiment was certainly true during a recent encounter I had with an insurer that notoriously poorly reimburses. I offer my interlude as a learning experience for better understanding bundling and coding for cosmetic services as well as the importance of knowing what it takes to exit a contract with a managed care plan.
Treating My Patient
I recently saw a patient in my practice at Beth Israel Hospital Phillips Ambulatory Care Center. This patient’s healthcare coverage was “provided” through a Medicaid HMO (intentionally unnamed).
The patient seemed content with this price and seemed happy to be treated by me because it had been challenging to find a dermatologist who accepted her insurance. I say “provided” because I have been told that few dermatologists accepted this patient’s Medicaid HMO because of its low fee schedule. This patient had melasma, an intradermal nevus on her nose and a number of skin tags on her body.
I told her I could give her a hydroquinone cream for her melasma but that she would have to pay for me to remove the nevus and tags. She stated that the nevus and tags were growing and bleeding, but I did not note any evidence of bleeding. Deeming these removals cosmetic, I told her I would remove the nevus and tags for $200. From experience, I knew the insurance would not pay for tag removal in any case.
The patient seemed content with this price and seemed happy to be treated by me because it had been challenging to find a dermatologist who accepted her insurance. I removed the nevus and tags, and the patient paid $200 in cash in addition to her $20 co-payment.
Owing My Patient $200
The following day I worked at Roosevelt Hospital’s dermatology clinic. I received an e-mail from the office manager stating that the patient (no name was used) had contacted her Medicaid HMO regarding the $200 charge and had been informed I was not entitled to collect it because under my contract with her Medicaid HMO, the maximum amount that I could charge patients at a visit was their co-payment. Therefore, the insurance company told me I needed to return the $200 to the patient!
Needless to say, I was not happy with this and asked to speak with the contract manager. He explained that I could only collect the co-payment at a visit and that I could not charge for a biopsy and an office visit during the same encounter. This was because the HMO’s contract mandated strict bundling of services so that only one CPT code could be paid for a given encounter. Therefore, all that I was entitled to be paid was approximately $65 for a level 3 new patient visit.
After consulting with my department chairman, he maintained that the $200 had to be returned to the patient, who then came to the office to retrieve it.
So, How Should I Proceed?
Next, I asked her Medicaid HMO how I could charge for cosmetic services.The representative explained that I would have to submit a letter requesting that cosmetic CPT services be paid for by her Medicaid HMO.
Then, if the HMO replied that it did not pay for these CPT, it was then possible that I could charge the patient for the cosmetic services.
I never ascertained what “possible” meant.The Medicaid HMO representative invited me to write a letter requesting payment for the nevus and tag removal but made no promises.
I sent such a letter, and several months later received an additional payment of about $55.00.
Subsequent visits by other patients, however, still resulted in payment only for a visit even if several problems were addressed such as xerosis, nummular dermatitis and destruction of genital molluscum (the insurance wanted pictures of the molluscum before I had treated them — apparently, a detailed chart was totally insufficient to make the procedure medically necessary and, hence perhaps, separately payable.
I have since written a letter resigning from this Medicaid HMO; however, I will only be off the panel 90 days after they have acknowledged the receipt of such a letter because the contract requires a 90-day termination notice.
Bundling and Charging for Cosmetic Services
The case brings up many interesting legal issues — the first one that I will discuss is bundling and charging for cosmetic services.
In 1992, when Medicare implemented the Resource-Based Relative Value Scale (RBRVS) system for physician payment, new modifiers were established within the CPT codes to describe special circumstances related to the performance of multiple services or procedures on the same date.1
The CPT Editorial Panel, which includes representatives of the Blue Cross and Blue Shield Association and the Health Insurance Association of America, agreed with the Health Care Financing Administration, which is the predecessor agency of the Centers for Medicare and Medicaid Services, that these modifiers were crucial in establishing a formalized structure and linkage between CPT coding and this payment methodology.1
CPT coding incorporates modifiers as an integral part of its structure. The use of modifiers allows CPT codes to be adapted for different situations without unduly expanding the code set or making it overly complex.1
Modifiers provide a means to demonstrate that a service or procedure was altered by specific circumstances, but not changed in its definition or code.1 The service or procedure remains the same, but the circumstances of its delivery were altered. Modifiers are explained in detail in the CPT Book and other CPT related coding products published by the AMA such
as CPTAssistant and Principles of CPT Coding.1
The ability of all users to recognize and accept CPT modifiers is important for the implementation of the CPT coding system.1 While acceptance of CPT modifiers is important, the subsequent step involving interpretation of modifiers in a manner that is consistent with established CPT is also critical.1
Despite the creation and existence of modifiers, they are not always recognized.
This can be because an insurance provider has done the following:
1. It has stated in its contract it does not recognize them.
2. It has contracted to recognize them with a physician but does not adhere to its contractual obligations.
Most insurers who fail to recognize modifiers fall into the second category. Apropos of this failure to recognize modifiers, a large class action law suit as been pending in federal court in Miami regarding claims of more than 700,000 physicians that insurance companies downcoded and bundled physician bills.2,3
An Update on Relevant Lawsuits
Aetna and Cigna settled less recently, and it is too late to file a claim against them. Healthnet, Anthem/Wellpoint and Prudential have settled more recently, and you might have received notice to file a claim to get some of this settlement money. If you have received these claims forms, you must file them out and supply any requested documentation to be eligible for a piece of the settlement.
No papers have been mailed out for the Wellpoint settlement because it has not been finalized, and U.S. District Court Judge Moreno has set the final approval hearing for Dec. 2, 2005, for the Wellpoint settlement. You should look into these settlement as you may be able to recover money.
United, Pacificare, Coventry and Humana have not yet settled. Outstanding defendants include United, Pacificare and Coventry.
Feb. 17, 2006, was the claims submission deadline for Humana recovery. The trial date for the remaining defendants has been changed to Sept. 18, 2006.
All class members who practice or live in a county declared a disaster area because of Hurricane Katrina have an additional 60 days to file a proof of claim for the Healthnet settlement.
The issue as best I can determine is that the contracts of these companies stated that they would adhere to AMA/CMS guidelines regarding modifiers and coding and enumerated a certain fee schedule, and that the companies did not adhere to the language and provisions of their contacts with physicians.4
My situation with the Medicaid HMO I discussed in this column is different. The HMO never agreed to recognize modifiers, so it is not legally bound to do so. It is up to the provider to either agree to contract with an HMO or not.
Another insurance that does not recognize modifiers in New York State is the 1199 (hospital workers) benefit plan. Just as the HMO stipulated, the 1199 plan only pays for one CPT code per visit.
Getting out of the Contract
Another important issue to explore regarding my situation with this Medicaid HMO is the issue of how to get out of a contract.
No doctor is compelled to contract with an insurance plan that does not pay well (being on staff at an academic institution where the institution has decided to take certain plans for non remunerative reasons notwithstanding). Yet, on the other hand, once you have contracted with such a plan the contact governs the relationship until it is terminated. Therefore it is important to read an insurance contract before you sign and agree to be on a panel.
Note that I can not just resign from the panel of the Medicaid HMO.The contract requires that either party give the other 90 days notice. Again, this is a term that both parties agreed to, and it is legally binding. I will continue to see Medicaid HMO patients until I am no longer on the company’s panel.
A Complex Issue
The issue of charging for cosmetic procedures is a complex one. My situation illustrates how important it is to carefully read an insurance contract to see how it treats billing patients more than its co-payments. Just by having a patient sign a form that a procedure is cosmetic and not covered by insurance will not insulate a physician from violating the contract with a managed care company.
Sometimes it will be necessary to request an insurance company to pay for service and receive a statement that that service is not in the ambit of the contract before performing the service and billing the patient.
So, carefully read the insurance contracts before you sign, unless you are ready to have terms enforced against you that you do not anticipate or like. The law allows parties to contract freely, exercise your rights wisely.
I have always believed that everyone deserves access to a dermatologist, and because of this belief I have signed with all the insurance plans in New York City where I practice.
As they say, sometimes it’s just not worth it. This sentiment was certainly true during a recent encounter I had with an insurer that notoriously poorly reimburses. I offer my interlude as a learning experience for better understanding bundling and coding for cosmetic services as well as the importance of knowing what it takes to exit a contract with a managed care plan.
Treating My Patient
I recently saw a patient in my practice at Beth Israel Hospital Phillips Ambulatory Care Center. This patient’s healthcare coverage was “provided” through a Medicaid HMO (intentionally unnamed).
The patient seemed content with this price and seemed happy to be treated by me because it had been challenging to find a dermatologist who accepted her insurance. I say “provided” because I have been told that few dermatologists accepted this patient’s Medicaid HMO because of its low fee schedule. This patient had melasma, an intradermal nevus on her nose and a number of skin tags on her body.
I told her I could give her a hydroquinone cream for her melasma but that she would have to pay for me to remove the nevus and tags. She stated that the nevus and tags were growing and bleeding, but I did not note any evidence of bleeding. Deeming these removals cosmetic, I told her I would remove the nevus and tags for $200. From experience, I knew the insurance would not pay for tag removal in any case.
The patient seemed content with this price and seemed happy to be treated by me because it had been challenging to find a dermatologist who accepted her insurance. I removed the nevus and tags, and the patient paid $200 in cash in addition to her $20 co-payment.
Owing My Patient $200
The following day I worked at Roosevelt Hospital’s dermatology clinic. I received an e-mail from the office manager stating that the patient (no name was used) had contacted her Medicaid HMO regarding the $200 charge and had been informed I was not entitled to collect it because under my contract with her Medicaid HMO, the maximum amount that I could charge patients at a visit was their co-payment. Therefore, the insurance company told me I needed to return the $200 to the patient!
Needless to say, I was not happy with this and asked to speak with the contract manager. He explained that I could only collect the co-payment at a visit and that I could not charge for a biopsy and an office visit during the same encounter. This was because the HMO’s contract mandated strict bundling of services so that only one CPT code could be paid for a given encounter. Therefore, all that I was entitled to be paid was approximately $65 for a level 3 new patient visit.
After consulting with my department chairman, he maintained that the $200 had to be returned to the patient, who then came to the office to retrieve it.
So, How Should I Proceed?
Next, I asked her Medicaid HMO how I could charge for cosmetic services.The representative explained that I would have to submit a letter requesting that cosmetic CPT services be paid for by her Medicaid HMO.
Then, if the HMO replied that it did not pay for these CPT, it was then possible that I could charge the patient for the cosmetic services.
I never ascertained what “possible” meant.The Medicaid HMO representative invited me to write a letter requesting payment for the nevus and tag removal but made no promises.
I sent such a letter, and several months later received an additional payment of about $55.00.
Subsequent visits by other patients, however, still resulted in payment only for a visit even if several problems were addressed such as xerosis, nummular dermatitis and destruction of genital molluscum (the insurance wanted pictures of the molluscum before I had treated them — apparently, a detailed chart was totally insufficient to make the procedure medically necessary and, hence perhaps, separately payable.
I have since written a letter resigning from this Medicaid HMO; however, I will only be off the panel 90 days after they have acknowledged the receipt of such a letter because the contract requires a 90-day termination notice.
Bundling and Charging for Cosmetic Services
The case brings up many interesting legal issues — the first one that I will discuss is bundling and charging for cosmetic services.
In 1992, when Medicare implemented the Resource-Based Relative Value Scale (RBRVS) system for physician payment, new modifiers were established within the CPT codes to describe special circumstances related to the performance of multiple services or procedures on the same date.1
The CPT Editorial Panel, which includes representatives of the Blue Cross and Blue Shield Association and the Health Insurance Association of America, agreed with the Health Care Financing Administration, which is the predecessor agency of the Centers for Medicare and Medicaid Services, that these modifiers were crucial in establishing a formalized structure and linkage between CPT coding and this payment methodology.1
CPT coding incorporates modifiers as an integral part of its structure. The use of modifiers allows CPT codes to be adapted for different situations without unduly expanding the code set or making it overly complex.1
Modifiers provide a means to demonstrate that a service or procedure was altered by specific circumstances, but not changed in its definition or code.1 The service or procedure remains the same, but the circumstances of its delivery were altered. Modifiers are explained in detail in the CPT Book and other CPT related coding products published by the AMA such
as CPTAssistant and Principles of CPT Coding.1
The ability of all users to recognize and accept CPT modifiers is important for the implementation of the CPT coding system.1 While acceptance of CPT modifiers is important, the subsequent step involving interpretation of modifiers in a manner that is consistent with established CPT is also critical.1
Despite the creation and existence of modifiers, they are not always recognized.
This can be because an insurance provider has done the following:
1. It has stated in its contract it does not recognize them.
2. It has contracted to recognize them with a physician but does not adhere to its contractual obligations.
Most insurers who fail to recognize modifiers fall into the second category. Apropos of this failure to recognize modifiers, a large class action law suit as been pending in federal court in Miami regarding claims of more than 700,000 physicians that insurance companies downcoded and bundled physician bills.2,3
An Update on Relevant Lawsuits
Aetna and Cigna settled less recently, and it is too late to file a claim against them. Healthnet, Anthem/Wellpoint and Prudential have settled more recently, and you might have received notice to file a claim to get some of this settlement money. If you have received these claims forms, you must file them out and supply any requested documentation to be eligible for a piece of the settlement.
No papers have been mailed out for the Wellpoint settlement because it has not been finalized, and U.S. District Court Judge Moreno has set the final approval hearing for Dec. 2, 2005, for the Wellpoint settlement. You should look into these settlement as you may be able to recover money.
United, Pacificare, Coventry and Humana have not yet settled. Outstanding defendants include United, Pacificare and Coventry.
Feb. 17, 2006, was the claims submission deadline for Humana recovery. The trial date for the remaining defendants has been changed to Sept. 18, 2006.
All class members who practice or live in a county declared a disaster area because of Hurricane Katrina have an additional 60 days to file a proof of claim for the Healthnet settlement.
The issue as best I can determine is that the contracts of these companies stated that they would adhere to AMA/CMS guidelines regarding modifiers and coding and enumerated a certain fee schedule, and that the companies did not adhere to the language and provisions of their contacts with physicians.4
My situation with the Medicaid HMO I discussed in this column is different. The HMO never agreed to recognize modifiers, so it is not legally bound to do so. It is up to the provider to either agree to contract with an HMO or not.
Another insurance that does not recognize modifiers in New York State is the 1199 (hospital workers) benefit plan. Just as the HMO stipulated, the 1199 plan only pays for one CPT code per visit.
Getting out of the Contract
Another important issue to explore regarding my situation with this Medicaid HMO is the issue of how to get out of a contract.
No doctor is compelled to contract with an insurance plan that does not pay well (being on staff at an academic institution where the institution has decided to take certain plans for non remunerative reasons notwithstanding). Yet, on the other hand, once you have contracted with such a plan the contact governs the relationship until it is terminated. Therefore it is important to read an insurance contract before you sign and agree to be on a panel.
Note that I can not just resign from the panel of the Medicaid HMO.The contract requires that either party give the other 90 days notice. Again, this is a term that both parties agreed to, and it is legally binding. I will continue to see Medicaid HMO patients until I am no longer on the company’s panel.
A Complex Issue
The issue of charging for cosmetic procedures is a complex one. My situation illustrates how important it is to carefully read an insurance contract to see how it treats billing patients more than its co-payments. Just by having a patient sign a form that a procedure is cosmetic and not covered by insurance will not insulate a physician from violating the contract with a managed care company.
Sometimes it will be necessary to request an insurance company to pay for service and receive a statement that that service is not in the ambit of the contract before performing the service and billing the patient.
So, carefully read the insurance contracts before you sign, unless you are ready to have terms enforced against you that you do not anticipate or like. The law allows parties to contract freely, exercise your rights wisely.
