Radiology Coding Alert

Although the new Medicare ambulatory patient classification (APC) regulations dont directly affect professional service fees or introduce dramatic new coding scenarios, radiology coders most likely will find that the new system impacts them daily.

What Are APCs?

According to Sandra Soerries, CPC, CPC-H, with the firm Baird, Kurtz and Dobson in Kansas City, Kan., which provides APC consulting services nationwide, APCs are a close cousin to the diagnosis related groups (DRGs), which were implemented in 1983 to help control inpatient care costs. During the past 15 years, as more and more healthcare was delivered in an outpatient setting, Congress became increasingly concerned about the rise in outpatient expenditures. In 1986, it mandated that the Health Care Financing Administration (HCFA) devise a system similar to DRGs to help contain such outpatient costs.

The new Medicare payment system is based on groups of services (called APCs), which divide all outpatient services into 451 groups, according to HCFA administrator Nancy-Ann DeParle. The system is designed to give hospitals changed incentives to become more efficient and will result in more consistent payments across hospitals, she says.

HCFA anticipates that the APC system will decrease Medicare payments by at least 5.7 percent, although industry and professional organizations believe HCFAs estimate is too low.

Originally, the APCs were to go into effect Jan. 1, 2000, but that was postponed until July 1, and just recently further delayed until Aug. 1, Soerries says. Nonetheless, many facilities are not prepared. It is anticipated that there will be a lot of confusion over the next few months.

What Will APCs Mean for Radiology Practices?

As an example of what might happen after Aug. 1, Soerries presents a scenario in which a radiologist sends a patient to a hospital outpatient facility for chest x-rays. The radiologist orders and subsequently reads a two-view chest x-ray (71020). But the hospital may mistakenly report two single-view x-rays (71010, assigned twice), an error that has, in fact, occurred.

The new APC system is designed to detect these inconsistencies and reject both the physician and the facility claims. The charges will be denied, and an audit may be conducted. No matter who had coded the services incorrectly, both parties will be scrutinized, Soerries explains.

The same guidelines hold true for the use of modifiers, she adds. If medical necessity supports two x-rays in a given day and the Radiology Practice codes the second x-ray 71020-76 (repeat procedure by same physician), but the facility codes it 71020-77 (repeat procedure by another physician), you will run into trouble.

Inconsistent diagnosis codes also may cause problems, Soerries says. The ICD-9 codes dont have to be identical at this time, but they must be related. For instance, if the radiology coder assigns 786.05 (shortness of breath) and the facility assigns 480.9 (viral pneumonia, unspecified), there may not be a problem. However, most experts expect that this will change in the future and that this type of discrepancy will also cause a claim to be rejected from the Medicare outpatient payment system.

How Can Radiology Coders Protect Themselves?

APCs dont add or change any of the existing radiology procedure or S&I (supervision and interpretation) codes, explains Soerries. In fact, they will primarily impact hospital outpatient departments. But they will affect radiology professional services because radiology codes assigned must match the technical component codes that the outpatient facility assigns. If the two are not identical, the new system will kick out any inconsistent charges. That will impact payment for both the radiologist and the facility.

The key is communication, Soerries says. Radiology coders must work closely with the hospital outpatient coders to make sure they are reporting the same services and codes. Documentation must be as thorough as possible, and physician and facility coders must coordinate their efforts.

Experts point out that many hospital outpatient departments may be eager to work more closely with physician coders because, for the first time, facility payments will depend on physician chart documentation. Robert Kottman, MD, FACEP, president of Alamo Physician Services Inc., a physician billing company serving practices in San Antonio, notes that wise hospital coders will recognize the importance of understanding physician coding.

If the hospital doesnt coordinate its APC Medicare billing with the appropriate procedure code being charged by the physician for his or her services, theres a possibility of a mismatch. That leaves the door open for reviews and possible audits by Medicare which can lead to recouping monies previously paid and even fines, he points out.