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Sample Impact Analysis for the 88342 / G0461 changes

January 2014

By: Mick Raich, President, Vachette Pathology

The new CMS fee schedule poses some unique challenges for practices. In anticipation of this new fee schedule, we have prepared a sample impact analysis that takes into account both the changes in the 88342 charge and the anticipated 88343 pricing.

The real issue here is how to bill multiple 88342s. It is fairly clear what Medicare will pay and how to bill these to Medicare. Remember this is a "per specimen" application. The complexity happens when you start looking at how you bill these cases to commercial carriers. There are several schools of thought; the first one is to bill the commercial carriers the old way, 88342 x 6 for example and just wait for denials and then appeal the case as directed by the payer. The second thought is to bill the cases using Medicare protocol via the G codes. The final thought is to bill using the 88343, which although it is not on the Medicare fee schedule has actually been approved as an add-on code.

The bottom line may be that many carriers will follow Medicare, some will continue to use the 88343 code and some will even develop their own policy. It is guaranteed this will lead to increased denials and confusion with the payers anticipating that groups will not follow up on denied claims. Remember this, 16% of all claims are denied, and 50% of all denied claims are not recouped.

We decided to build our impact analysis using the G codes for Medicare and then using an 88343 for commercial providers with the payment for the 88343 built to echo the G0462 code as they have similar RVU values. Here is an example from a small AP lab.

As you can see this is about a $159,000 projected loss. This is an estimate and granted it may be on the dour side but it easily explains how this change will affect this practice. This is about a $53,000 loss per physician owner. Next we looked at a how these changes affected a group that only bills professional only. In this case we can only project on the losses from Medicare. We could not estimate the loss from private payers.

As you can see, this hurt this practice also but the loss was significantly less per physician owner. In this case, the loss was about $4,379.00 per pathologist. Remember this is only the loss from Medicare.

Either way there are going to be some interesting errors that will happen in the first quarter of 2014. First, many Medicare intermediaries will not have these codes added to their system; this will mean rebilling and refiling these claims when the denials happen. Second, many commercial carriers will not have the 88343 and the G codes built in their system; what will happen when you bill these carriers?

Finally it should be noted that if your managed care plan does not recognize this code, then you may be paid a percentage of charge. Many contracts have clauses that note “when CPT codes are billed that are not on the CMS fee schedule, the practice will get paid 60% of their charge." Since 88343 is not on the Medicare fee schedule nor is 88342, how will these claims be paid under these contracts?

It is my thought that many groups will see a decrease in the payment as the payers and Medicare struggle to figure out how to pay these claims. Groups and labs will suffer from these changes in the fee schedule but they will also suffer from lack of payer coordination as this is implemented. The best option is to build an impact analysis and monitor your billing closely.

Mick Raich owns Vachette Pathology and works with pathologists, laboratories and hospitals nationwide in the area of strategic management, and revenue cycle management. Mick can be reached for comment at 866-407-0763 or 517-403-0763 or via e-mail at mraich@vachettepathology.com or visit www.vachettepathology.com.

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