False Claim Allegations Aimed at Kyphoplasty

When it comes to the long-running, whistleblower lawsuit that has kyphoplasty hospital surgeons wanting clearer Medicare guidance on kyphoplasty, the monetary settlement numbers are astounding:

  • Fifty five hospitals across 21 states agreed pay a combined $34 million in false claim settlements.
  • Individual settlements ranged from $552,000 to more than $4 million.
  • The largest single-hospital settlement was for $4.2 million, from Atrium Medical Center in Middletown, Ohio.
  • In 2008, Medtronic Spine, which acquired Kyphon® (maker of kyphoplasty spinal-surgery equipment), paid $75 million the year after the acquisition to settle allegations.
  • More than 100 hospitals have now settled false claim allegations for kyphoplasty.

A list of hospitals involved in the kyphoplasty overpayment false claims settlements can be found on the U.S. Justice Department’s website.

What Went Wrong?

It all started in 2008, when two whistleblowers at Kyphon filed a complaint that alleged the maker of spinal-surgery equipment coached healthcare providers on ways to maximize revenue.

Kyphon was said to be “encouraging” hospital healthcare surgeons to admit patients receiving kyphoplasty services for overnight inpatient stays.

According to an article in Becker’s Spine Review, kyphoplasty can be performed effectively as an outpatient procedure at a lower cost:

“Kyphoplasty is a minimally invasive procedure used to treat certain spinal fractures, which are often due to osteoporosis. In many cases, the procedure can be performed effectively and safely in the outpatient setting, which is less costly than an inpatient procedure.”

Who Dictates Medical Necessity?

Kyphon says it’s up to the physician to determine whether it’s medically necessary to keep the patient overnight, not the insurance carrier. According to Kyphon’s website, “On average, the procedure [kyphoplasty] takes up to one hour per fracture level treated and can be done on an inpatient or outpatient basis, depending upon a patient’s overall state of health as determined by the physician based on medical necessity.”

“Hospital executives say the allegations are prompted by unclear Medicare rules on when spinal-surgery patients should be held overnight. And they note that even though the whistleblowers and the government are targeting hospitals, the decision to admit patients is usually dictated by the treating physician,” according to ModernHealthcare.com.

But Tim McCormack, the Phillips & Cohen lawyer representing the Kyphon whistleblowers said, “This isn’t a case of … innocent misunderstanding of Medicare rules … Hospitals across the country misrepresented the type of treatment they provided to patients so they could bill Medicare for expensive inpatient stays.”

Neither Kyphon nor the hospitals involved have admitted to any wrong doing.

Coding Kyphoplasty as an Outpatient Procedure

The Centers for Medicare & Medicaid Services’ (CMS) MLN Matters MM3632, “MMA – January 2005 Update of the Hospital Outpatient Prospective Payment System (OPPS): Summary of Payment Policy Changes,” has guidance on billing kyphoplasty as an outpatient procedure:

“Hospitals should bill for kyphoplasty as complete procedures, coding only one unit of the appropriate C-code for each vertebral body treated. In addition to the kyphoplasty C-codes, hospitals may bill for the radiological supervision and interpretation service provided during the kyphoplasty.”

Two HCPCS Level II kyphoplasty codes to be reported under the OPPS are:

HCPCS Code SI APC Long Descriptor Payment Rate Minimum Unadjusted Copayment
C9718 T 0051 Kyphoplasty, one vertebral body, unilateral or bilateral   injection $2043.45 $408.69
C9719 T 0051 Kyphoplasty, one vertebral body, unilateral or bilateral   injection, each additional vertebral body $2043.45 $408.69

Use these CPT® codes for reporting the procedure:

  • 22523 Percutaneous vertebral augmentation, including cavity creation (fracture reduction and bone biopsy included when performed) using mechanical device, 1 vertebral body, unilateral or bilateral cannulation (eg, kyphoplasty); thoracic
  • 22524           lumbar
  • +22525        each additional thoracic or lumbar vertebral body (List separately in addition to code for primary procedure)

Source: ModernHealthcare.com


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3 Responses to “False Claim Allegations Aimed at Kyphoplasty”

  1. Magdeny Martinez says:

    Sacroplasty and Pubicplastic are also to be coded with 0200T for unilateral and 0201T for bilateral
    and Medical records will have to specify the medical necessity and correct and payable dx

  2. Erik says:

    This article lists incorrect HCPCS codes for outpatient kyphoplasty by referencing an outdated MLN Matters from CMS. C9718 and C9719 were terminated from the HCPCS code set as of January 1, 2006. The payment rates listed in the chart are also from that 8 year old publication and no longer valid. CPT code 22523-22525 as listed are the correct procedure codes and are now the sole reportable codes for kyphoplasty, receiving bundled payment under Medicare akin to most other outpatient procedures.

  3. Newton Shroder says:

    Timely piece . Apropos , if your company is requiring a a form , my kids found a fillable version here http://goo.gl/yy6593

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