The OIG in 2012 will continue to address previous years’ problem areas, but it currently appears to be taking a closer look into physician billing, specifically the use of modifiers that impact reimbursement.

In the 2011 Work Plan, the OIG identified that providers were billing evaluation and management services improperly during times of other global services. As defined in the CMS Claim Processing Manual, Chapter 12, Section 40.1, “global services” for most minor procedures have a term of 10 days, and for major procedures that term extends to 90 days. Services included within the global period are defined as:

  • Preoperative visits: such visits occur after the decision to operate is made, typically on the day before the day of surgery for major procedures and on the day of surgery for minor procedures;
  • Intra-operative services: services that are normally a usual and necessary part of a surgical procedure;
  • Complications following surgery: all additional medical or surgical services required during the postoperative period of surgery because of complications that do not require an additional trip to the operating room;
  • Postoperative visits: follow-up visits related to recovery from surgery;
  • Postsurgical pain management: services typically also performed by the surgeon;
  • Supplies: except for those identified as exclusions; and
  • Miscellaneous services: services such as dressing changes; local incisional care; removal of an operative pack; removal of cutaneous sutures and staples, lines, wires, tubes, drains, casts, and splints; insertion, irrigation and removal of urinary devices.

Carve-out Services

CMS also defines carve-out services that are excluded from global reimbursement; these include the initial consultation or evaluation of the problem by the surgeon to determine the need for surgery. Please note that this policy only applies to major surgical procedures, and the initial evaluation always is included in the allowance for a minor surgical procedure.

Such carve-out services also include the following:

  • Services of other physicians, except when the surgeon and the other physician(s) agree on the transfer of care. This agreement may be denoted in the form of a letter or an annotation in the discharge summary, hospital record or ASC record;
  • Visit(s) unrelated to the diagnosis for which the surgical procedure is performed (unless the visit(s) occur due to complications of surgery);
  • Treatment for an underlying condition or an added course of treatment that is not part of normal recovery from surgery;
  • Diagnostic tests and procedures, including diagnostic radiological procedures; and
  • Clearly distinct surgical procedures, performed during the postoperative period, that are not defined as re-operations or treatment for complications.

Evaluation & Management Services

“Evaluation & Management Services During Global Surgery Periods,” the focus was directed toward the use of modifier -24 (unrelated evaluation and management service by the same physician during the global period). Per this section, if the modifier was appended to an evaluation and management services during the global period of another procedure, the claim would be paid in addition to global allowance. The diagnosis code also would be the “key” to inform CMS that the problem met the definition of “unrelated.”

Another likely finding was E/M services coded without modifiers, billed and paid during the global period. This may have been a case when providers performing surgical services attempted to “break out” the pre- or postoperative care without understanding the basic CMS rules surrounding minor and major surgical services. The bottom line is this: if payment is made wrongfully by CMS, it becomes the responsibility of the provider to identify and remedy the incorrect payment before penalties are incurred.

As with many OIG audit targets, the scope of the review is broad and provides little direction with regard to interpretation. Several modifiers impact payment depending on the existence of complications, staged procedures and multiple providers.

As with automated reviews, RAC contractors can identify when separate providers bill for the same procedure without breaking down intraoperative and postoperative services. An example of this may be when a patient is seen in the emergency room for a displaced fracture and the physician performs a closed reduction, referring the patient to orthopedic for follow-up. If the orthopedic surgeon only manages post-operative care, the modifier -55 should be appended to the surgical CPT code, thus splitting the “global fee” and calculating only a percentage of the total RVU (relative value unit). Likewise, the ER provider only would bill for the surgical portion using the same CPT code with modifier -54 (surgical service only).

Modifiers 78 and 58

Another area of potential vulnerability exists when deciding whether a patient should return to the OR during the global period based on complications or undergo a more extensive procedural service. Modifiers -78 and -58 both provide a means of additional reimbursement depending on patient condition and, ultimately, documentation. The biggest difference between these modifiers is the RVU payment and the continuation of actual “global days.”  Modifier -78 (return to the OR for a related procedure) only pays for the intraoperative portion of the global fee, whereas modifier -58 (staged or related procedure) pays the entire fee and starts a new global period.

Although many conclusions can be drawn based on diagnosis, these claims most likely would fall to a complex review to determine proper use of a modifier and thus percentage of payment. As a precautionary activity, to learn more about other modifiers that impact payment see the CMS Claim Processing Manual, Chapter 12, Section 40.2, along with the 2012 OIG Part B issue summaries.

About the Author

Jana B. Gill, MA, CPC, is a product engineer and developer of Regulatory and Reimbursement software suites for Wolters Kluwer. Jana also is the principal of Gill Compliance Solutions, LLC which specializes in physician compliance, developing internal auditing programs, government appeals (RAC/CERT), coding risk assessments, due diligence for physician/hospital integrations and revenue analyses of hospitalist services.

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