Tech Talk

New Diagnostic Procedure Codes and Reimbursement

Author and Disclosure Information

With the implementation of the new Medicare Physician Fee Schedule on January 1, 2019, it can be beneficial for all practitioners to grasp an understanding of how reimbursement is determined. With the new Physician Fee Schedule also came new relative value units (RVUs) and new billing codes. Biopsy codes, in particular, were changed to reflect the complexity of the sampling technique (ie, tangential, punch, incisional). In this article, we explain RVUs and how they determine reimbursement. This article also highlights changes and additions to billing codes, specifically for biopsies and telemedicine services.

PRACTICE POINTS

  • Reimbursement typically is proportional to the relative value unit (RVU), a number representing the value of the work involved and cost of providing a service relative to other services.
  • The total RVU consists of the work RVU, practice expense RVU, and malpractice expense RVU.
  • The new 2019 biopsy codes reflect the complexity of the sampling technique (ie, whether the biopsy is tangential, punch, or incisional).
  • Accurate completion of Relative Value Scale Update Committee surveys sent to practitioners will allow RVUs to be valued appropriately.


 

References

As the US population continues to grow and patients become more aware of their health needs, payers are beginning to recognize the benefits of more efficient and cost-effective health care. With the implementation of the new Medicare Physician Fee Schedule on January 1, 2019, some old billing codes were revalued while others were replaced entirely with new codes.1 The restructuring of the standard biopsy codes now takes the complexity of different sampling techniques into consideration. Furthermore, Current Procedural Terminology (CPT) Category III tracking codes for some imaging devices (eg, optical coherence tomography) added in 2017 require more data before obtaining a Category I reimbursable code, while codes for other imaging devices such as reflectance confocal microscopy (RCM) remain relatively the same.2-4 Notably, the majority of the new 2019 telemedicine codes are applicable to dermatology.2,3 In this article, we discuss the new CPT codes for reporting diagnostic procedures, including biopsy, noninvasive imaging, and telemedicine services. We also provide a summary of the national average reimbursement rates for these procedures.

Background on Reimbursement

To better understand how reimbursement works, it is important to know that all billing codes are provided a relative value unit (RVU), a number representing the value of the work involved and cost of providing a service relative to other services.5 The total RVU consists of the work RVU (wRVU), practice expense RVU (peRVU), and malpractice expense RVU (mRVU). The wRVU represents the time, effort, and complexity involved in performing the service. The peRVU reflects the direct cost of supplies, personnel, and durable equipment involved in providing the service, excluding typical office overhead costs such as rent, utilities, and administrative staff. The mRVU is to cover the cost of malpractice insurance.5 The peRVU can be further specified as facility versus nonfacility services depending on where the service is performed.6 A facility peRVU is for services completed in a facility such as a hospital, outpatient hospital setting, or nursing home. The facility provides some of the involved supplies, personnel, and equipment for which they can recapture costs by separate reporting, resulting in a lower total RVU for the provider charges compared with nonfacility locations where the physician must provide these items.6 Many physicians may not be aware of how critical their role is in determining their own reimbursement rates by understanding RVUs and properly filling out Relative Value Scale Update Committee (RUC) surveys. If surveys sent to practitioners are accurately completed, RVUs have the potential to be fairly valued; however, if respondents are unaware of all of the components that are inherent to a procedure, they may end up minimizing the effort or time involved, which would skew the results and hurt those who perform the procedure. Rather than inputting appropriate preoperative and postoperative service times, many respondents often put 0s and 1s throughout the survey, which misrepresents the amount of time involved for a procedure. For example, inputting a preoperative time as 0 or 1 minute may severely underestimate the work involved for a procedure if the true preoperative time is 5 minutes. Such survey responses affect whether or not RVUs are valued appropriately.

The billing codes and their RVUs as well as Medicare payment values in your area can be found on the Centers for Medicare & Medicaid Services website.2,3 Table 1 provides a comparison of the old and new biopsy codes, and Table 2 shows the new RCM codes.

Biopsy Codes

Prior to 2019, biopsies were reimbursed using CPT code 11100 for the initial biopsy and 11101 for each additional biopsy.2 Called up for refinement in the RUC process, initial data from the Physician Practice Expense Information Survey pointed to the likelihood of different sampling techniques having different amounts of work being supplied by different techniques.1 Imaging modalities such as dermoscopy or RCM could help minimize the need for surgical biopsies. Dermoscopy, which has been proven to allow for more efficient and accurate diagnoses in dermatology, is reimbursed in Europe but not in the United States.7-9 In 2016, CPT codes 96931 through 96936 were created for RCM and are covered by most insurances.10 Optical coherence tomography, another noninvasive imaging technology, currently is not reimbursed but did receive Category III codes (0470T-0471T), also known as a tracking codes, in 2017.4 Category III codes are used for emerging technologies that have future potential but do not have enough US-based evidence to support receiving Category I CPT codes. The use of Category III codes allows for data collection on emerging technologies and services, with the potential to convert the Category III codes to Category I codes once certain criteria are met.11

Beginning in 2019, the standard biopsy codes 11100 and 11101 were replaced with 6 new codes to represent primary (11102, 11104, 11106) and add-on biopsies (11103, 11105, 11107) based on the sampling technique utilized and the thickness of the sample (Table 1). Previously, the biopsy codes did not reflect the complexity of the different biopsy techniques, whereas the new codes provide differentiation of the method of removal (ie, tangential, punch, incisional).2,3 The base code is dependent on whichever biopsy performed has the highest complexity, with incisional biopsy--a partial excision--being considered the most complex.3 Punch biopsy is considered the next level of complexity, followed by tangential biopsy. Each of the 6 new biopsy codes also received a new wRVU, which determines reimbursement under Medicare and most other insurers when combined with direct peRVU and mRVU. Additional biopsies, reported using the add-on codes, are reimbursed at a lower level than the base codes because of removal of duplicate inputs for preservice and postservice care.3

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