Does this help?
What is the appropriate way to bill for a physician's services with a routine
physical/visit in conjunction with a medically necessary visit (i.e. follow-up visit to monitor use of medications for chronic illnesses)? What is the appropriate way to determine the amount to charge the beneficiary for the non-covered portion of a preventive visit with a covered medical visit: (1) should our established charge for the covered medical visit be subtracted from our established charge for the preventive visit; or (2) the Medicare allowed amount for the covered medical visit?
If the physician performs the preventive/annual exam etc., and also performs a medically necessary E/M service at the same encounter, the physician would report the medically necessary E/M (e.g., 99213) and Medicare will pay for that service. The physician, in turn, is supposed to subtract the 99213 visit payment (Medicare Allowed Amount) from their preventive medicine charge. We call this a "carve out." Medicare allows carve outs to give providers an incentive to address both the preventive and covered issues in one visit. Medicare understands that there is a need to address a patient's other concerns related to chronic illnesses during a preventive visit. Allowing carve outs reimburses the physician for those components performed in a preventive visit that would normally be covered by Medicare if done independent of that visit, while still allowing the physician to be compensated for the remaining preventive services at their normal standard fee.
In addition, this benefits the beneficiary as some of their expenses for that visit were covered and they need only come in once.
**Due to the number of questions we receive regarding the amount to charge for carve out
services, WPS staff sought and received clarification from CMS:
• First, select the most appropriate code for the preventative (routine/physical visit) visit
(codes 99381-99387 or 99391-99397).
• Next, select the most appropriate Evaluation and Management (E/M) code for the
medically necessary portion of the visit.
• Subtract the appropriate Medicare Allowed Amount for the medically necessary E/M visit
from your charge for the preventive exam.
• The remaining balance is what you will charge for this portion of the exam. This portion
will be a "non-covered" service.