Medical Cost Reimbursement of Medical Devices

October 2007 Dickson Consulting

Medical Cost Reimbursementof Medical Devices

Dickson Consulting351 Old Babcock TrailGibsonia, PA 15044

724-272-1527bob@dicksonconsulting.biz

www.dicksonconsulting.biz

Overview of Reimbursements

• Administered by Centers for Medicaid & Medicare (CMS) Inpatient Prospective Payment System (IPPS)Codes for hospital reimbursement, not doctors

• American Medical Association (AMA) administers codes for reimbursement of physicians

• Other systems for reimbursement-private insurance companies

Types of Codes

• ICD-international classification of diseases

• DRG’s-diagnosis related groups

• CPT-current procedural terminology

ICD Codes

• Administered by CMS

• ICD-9-CM diagnostic codesA system for the international classification of

diseases Identify why a patient was provided health care

services

• ICD-9-CM procedure codes Actual procedures performed by health care providers

Examples of ICD-9-CM Codes

• ICD-9-CM Diagnostic Codes410 Acute myocardial infarction

410.0 Acute myocardial infarction of anterolateral wall411 Other acute and subacute forms of ischemic

heart disease411.0 Postmyocardial infarction syndrome

• ICD-9-CM Procedure Codes37.68 Insertion of percutaneous external heart assist

device37.22 Left heart cardiac catheterization37.65 Implant of external heart assist system37.64 Removal of heart assist system

DRG Codes

• Diagnosis Related Groups=DRG• New codes effective October 1, 2007• New codes based on indication of severity

MCC=major co-morbidity and complicationCC=Co-morbidity and complication

• Payments vary based on geographic region, training hospital, etc.

• When more than one procedure is performed reimbursement is based on highest value DRG

Examples of DRG Codes

• 216= Cardiac valve and other major cardiothoracic procedure with cardiac catheterization with MCC

• 217= Cardiac valve and other major cardiothoracic procedure with cardiac catheterization with CC

• 218= Cardiac valve and other major cardiothoracic procedure with cardiac catheterization without MCC/CC

• 1= Heart transplant or implant of heart assist system with MCC

• 2= Heart transplant or implant of heart assist system with CC

• 215= Other heart assist system implant

CPT Codes

• Used for payment of physician services

• Determined by the AMA Based on Resource Based Relative Value Scale (RBRVS)

• Cost is divided into three components– Physician work– Practice expense– Professional liability insurance– Translated into relative value units

Examples of CPT Codes

• 33975= Implantation of single extracorporeal ventricular assist device (VAD)

• 33977= Removal of single extracorporeal VAD

• 33960= Prolonged extracorporeal circulation for cardiopulmonary insufficiency

• 33961= Prolonged extracorporeal circulation for cardiopulmonary insufficiency for each additional 24 hours

Example of Code Application

Circulatory assist system is utilized to stabilize a patient in a PCI procedure in a cardiac catheterization laboratory. The reimbursement would be determined as follows:

• Insertion of percutaneous heart assist device: ICD-9-CM code = 37.68 CPT code = 0048T

• Potential DRG codes: DRG 216 (with MCC and CC) DRG 217 (with CC) DRG 218 (without MCC or CC)

Example of Code Application

Multiple facilities are involved or procedures are performed in connection with open heart surgery.

• Patient is transferred from an open heart center to a destination therapy or a transplant center, the transferring facility should receive a per diem derived from the expected DRG payment.

• If a longer term ventricular assist device is implanted or a heart transplant occurs the receiving facility should receive DRG 1 or 2.

• If at the receiving facility, a circulatory assist device is used for the patient in a heart surgery procedure, the circulatory assist device is removed, the patient recovers native heart function and is discharged home, then the receiving facility should receive DRG 1 or 2.

Additional Information From CMS

• Home page: www.cms.hhs.gov • Regulations for new codes issued August 1,

2007: www.cms.hhs.gov/AcuteInpatientPPS/downloads/CMS-1533-FC.pdf

• Intermediary-Carrier Directory effective January 1, 2007:www.cms.hhs.gov/contractinggeneralinformation/downloads/02_ICdirectory.pdf

• ICD-9 Provider and Diagnostic Codes: www.cms.hhs.gov/ICD9providerdiagnosticcodes/06_codes.asp#topofpage

Additional Information From AMA

• Home page: www.ama-assn.org

• CPT code information:

www.ama-assn.org/ama/pub/category/3113.html

• CPT Codebook, Professional Edition

• Physician ICD-9-CM Codebook

Disclaimers

• This document is for informational purposes only, and is not intended to provide specific instructions on billing for medical procedures.

• Specific insurers should be consulted for their requirements for coding, billing and payments.

• Reliance on this document, does not guarantee that reimbursements will be made in accordance with this document.

• This document is not intended to encourage any healthcare provider to provide services to patients, or utilize any medical device.

• This presentation is not intended to address reimbursement for off-label procedures.

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