The Key To Maximum Reimbursement Is Not Paying For Facility Expenses
By Suzanne Fletcher-Petrich, CPC, CPC-P
A key factor in maximizing practice revenue can be associated with keeping track of how many procedures are scheduled in the office versus how many are scheduled in a hospital or ambulatory surgical center (ASC). Physicians who are in the habit of seeing patients and performing diagnostic tests and/or therapeutic procedures somewhere other than in their own offices should be aware of site-of-service limitations. Providers who perform these procedures in the office and send out claims to payers are reimbursed at the global rate. However, if they perform one of these diagnostic or therapeutic services in an emergency room, an ASC, or in a facility, the payer will reduce the amount paid to the provider.
When procedures are performed in a location other than the physician’s office, the reimbursement is reduced because the “practice expense” or “facility expense” is shifted to the hospital or ASC.
Payment is determined by three components:
- The practice expense
- The work expense
- The malpractice expense
Procedures that are usually performed 50 percent of the time in the office are maintained on a national list. When these procedures are billed with a place of service (POS) code to identify them as being performed in a facility or approved ASC, the payer will discount the amount paid to the provider to make up the amount that needs to be paid to the facility.
According to CMS, the list of places of service subject to facility fees include:
- hospitals (POS code 21-23)
- skilled nursing facilities (SNF) for a Part A resident (POS code 31)
- comprehensive inpatient rehabilitation facilities (POS 61)
- inpatient psychiatric facilities (POS 51)
- community mental health centers (CMHC) (POS code 53)
- ASC for a HCPCS code included on the ASC approved list of procedures (POS code 24)
Non-facility fees are applicable to procedures furnished in:
- skilled nursing facilities (SNFs) to Part B residents – (POS code 32)
- ASCs not approved for Medicare regardless of the procedure
- Medicare-approved ASCs for a procedure not on the ASC-approved list
- procedures in all other facilities
Get Your Fair Share
Generally, the discount amount is determined by the payer reducing the practice expense relative value unit (PE RVU) by 50 percent so the facility’s PE RVU can be properly reimbursed.
For example: A cardiologist who is in private practice routinely performs echocardiograms in the office. The tests are billed and reimbursed at the global fee. If one of the cardiologist’s patients has a day surgery scheduled at the ASC, but upon arrival the surgeon wants a more current echocardiogram, the cardiologist goes to the ASC and performs the test in the facility. The cardiologist bills the CPT® codes for the echocardiogram with a modifier 26 and a POS of 24. The payer reduces the fee normally paid to the physician so the practice expense, or overhead, is only paid to the facility. If this same cardiologist or cardiology group routinely performs echocardiograms in the ASC before procedures, rather than scheduling the tests in the office, revenue is adversely affected.
Claim What is Only Rightfully Yours
Maintaining an office policy of scheduling tests in the office communicated to patients and other physicians helps to keep those reimbursement dollars in the physician practice and ultimately creates a positive impact on office revenue. Of course, there will be times when it is necessary to perform these tests outside of the office, so be sure to indicate the appropriate place of service on the claim to avoid sending an incorrect claim resulting in higher reimbursement.