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Summer 2007

Divining the Financial Potential Of Ultrasound

Jody Locke
Vice President, Anesthesia Business Consultants, LLC

Technological developments in medicine tend to fall into two categories: dramatically new breakthroughs and the clever application of existing technology to new applications. Despite the enthusiasm of practitioners involved with the introduction of a new technique or approach to an age-old problem, reimbursement tends to favor incremental advances over quantum leaps. The insurance industry has a frustrating tendency to view any new clinical solution with skepticism until the evidence has been carefully considered and validated, a process that may involve numerous changes of position over time.

The development of the fluoroscope, while based on radiological concepts, represented a quantum leap in the ability to visualize the anatomy on a realtime basis. Its value to the pain management physician has now been clearly demonstrated through empirical assessment. Based on this evidence insurance plans, for the most part, have acknowledged the additional costs of the fluoroscope in allowing separate reimbursement when fluoroscopy is used for needle guidance for most nerve block procedures. But such was not always the case. For years pain management physicians complained persistently as the pendulum of reimbursement swung from one extreme to the other before finally resulting in its current position. Before this would happen, though, new CPT codes specifically defining the nature of the service to be reimbursed would have to be created and accepted by payors as an integral part of their fee schedules. Some may argue that codes 77002 (formerly 76003) and 77003 (formerly 76005) still do not adequately compensate the practitioner but at least the uncertainty has been resolved.

Now ultrasound is being used with increasing frequency for the same or a very similar application: the visualization of needle placement for nerve blocks in the pain clinic. For all the enthusiasm of its promoters, age old questions are being asked in an effort to determine whether the time and effort necessary to master the application will bear similar results. On the one hand, the convenience of the technology holds great promise, while at the same time suspicion clouds the value of the investment and its potential for financial return. It is a familiar story; we just don’t know how it will end.

The arcane process that leads from the introduction of a new medical technique or procedure to consistent and appropriate reimbursement is neither linear nor predictable. It is, instead, a curious interplay of a variety of clinical, political and economic factors, the slightest change in the relative proportion of which can dramatically affect the outcome. Who proposes a solution and who disposes of its value can be key factors in the outcome. As in so many things, timing is everything.

The clinical value of new technologies must be proven on its own merits long before the editors of the CPT (Current Procedural Terminology) will consider its inclusion. As in so many things, a credible champion can move this process along fairly expeditiously. The problem is that many techniques have attained the status of numerical codification in CPT without ever becoming incorporated into payor fee schedules. It is an important first step.

Consider the fate of two distinct approaches to endotracheal intubation. The use of a fiberoptics for resolution of difficult intubations was never recognized as a separately reimbursable service, its use in the performance of a bronchoscopy notwithstanding, while the insertion and placement of double lumen tubes did form the basis for new codes specifically reimbursing anesthesiologists for one lung techniques. Today ASA codes 00529 (11 units), 00541 (15 units) and 00626 (15 units) ensure a positive reimbursement differential when the use of one lung anesthesia is clearly documented.

Anesthesiologists should make a special note that while the ASA Relative Value Guide was accepted by Medicare in the 1980s, subsequent updates must all be evaluated on their own merits. To wit, the ASA attempted to address payor policy issues concerning reimbursement for TEE (Transesophageal Echocardiography) with the introduction of a TEE monitoring code (93318), but the inclusion of the code accomplished little and has yet to be recognized by a major insurance plan. The message here is that while it is essential to have an appropriate code, a code does not ensure reimbursement.

The good news for the pain practitioner eager to apply ultrasound guidance to needle guidance for nerve blocks is that ultrasound is already recognized by CPT. The anesthesiologist hoping to use fluoroscopic guidance in the routine performance of a block for a regional anesthetic or for purposes of postoperative pain management cannot hope to see any additional reimbursement for the use of ultrasound. What remains to be proven is whether the historical CPT description fits the new application. Code 76942 can be found in the radiology section. As such a few caveats must be noted. Radiology services have two components, a technical and a professional component. As a general rule of thumb, the technical component is worth significantly more than the professional component. A place of service differential can also result in some very curious disparities between the facility fee, so named because the facility gets a separate payment, and the non-facility fee. Claims for reimbursement must be clearly identified by use of an appropriate modifier and place of service indicator. The impact of all these factors on reimbursement for the Detroit metropolitan area for 2007 is indicated in the table shown.

Lest the reader be left with the wrong impression here, the typical provider is only entitled to the lowest rate indicated. Very specific criteria must be met for the individual practitioner or practice to be entitled to either the technical component or the facility fee itself. These are intended to reimburse the facility for both the technician and the overhead.

Code on Claim Component Facility Allowable Non-Facility Allowable
76942-TC Technical &nbsp $138.70
76942-26 Professional $35.45 $35.45
76942 Global &nbsp $174.15

As if all these distinctions are not confusing enough, anesthesiologists often get distracted by the inclusion of these same services in their own ASA Relative Value Guide. ASA Relative Value units have nothing to do with reimbursement potential of services paid based on a fee schedule basis. A recent MGMA list serve discussion of the value of ultrasound focused on strategies to obtain a two unit reimbursement. Unfortunately, such a focus misses the point. A reimbursement consultant with a national billing company wrote that “many of my providers are using ultrasound guidance for regional blocks and I am seeing exactly that (extra 2 units) being reimbursed for this technique.” None of us dispute his claim that ultrasound may well replace fluoroscopy as a more practical and convenient way to accurately target pain-inducing anatomy; the question is whether the reimbursement community will assess the convenience of the tool and its potential to be a standard of care and determine that it is a bundled service and not worth separate reimbursement.

What we must also not forget is that reimbursement is the product of some very simple but fundamental economic principles. Average fee schedule allowances for epidural steroid injections have gone down over time in inverse proportion to their frequency of administration. The law of supply and demand suggests that the more a particular service is performed the less payors need to pay for it. In other words, the payor view is that they obviously do not need to provide a financial inducement to physicians to perform it. It is the dramatic growth in claims for CPT Code 62311 (the best code for spinal injections) that has also prompted most Medicare intermediaries to implement LCDs (Local Coverage Determinations) to warn practitioners of the potential for abuse.

There is a tendency to look at current reimbursement data for a particular service and draw conclusions about the future of reimbursement. Pain management reimbursement consultants are all too familiar with the three phases of reimbursement for a new service. Many claims for valid codes get paid without question until the payors start to understand what the claims are for. Anyone who was involved with getting paid for IV PCA a decade ago understands how misleading reimbursement data can be. Once claims adjudicators begin to identify a pattern they start questioning the medical necessity of the service. For many services, like IV PCA, this is the kiss of death. Others, such as TEE survive after considerable debate, policy clarification and the implementation of specific reimbursement guidelines. (TEE is now reimbursable by most Medicare intermediaries if the anesthesiologist completes a report documenting his or her assessment of valvular function and hemodynamic efficiency.) To achieve permanent status on payor fee schedules (the third phase of the process) a number of specific criteria have to be met.

First, the service or technique must have a clear and obvious clinical value. There must be evidence that additional reimbursement is necessary to induce providers to perform the service. This may pertain to the cost of the technology or the skill and training of the practitioner to perform the service reliably. There must also be a compelling argument to unbundled the reimbursement. Payors are especially suspect of every attempt to unbundle a particular service and would rather increase reimbursement for an existing service if the standard of care has changed than allow extra reimbursement under a second code. There is no better example of this phenomenon than Aetna’s approach to reimbursement for fluoroscopy a couple of years ago. Seemingly out of the blue and without warning Aetna started denying claims for fluoroscopy claiming that since it had become a standard of care for the administration of nerve blocks the reimbursement should be tied to the block code and not the separate fluoroscopy code. Because CMS had already addressed the issue and come to a different conclusion Aetna policy eventually changed to conform to an industry norm. The problem for proponents of ultrasound guidance for nerve blocks is that there is no such Medicare precedent.

Even when reimbursement guidelines appear to have been resolved they are often subject to capricious revision. Any number of factors can trigger a post-payment review of a particular service. A routine audit of claims for single shot and continuous femoral and axilary blocks by Blue Shield of Louisiana led its executives to conclude that nerve block techniques performed as an adjunct to an anesthetic, even a general anesthetic, should not merit separate reimbursement and that, moreover, all monies paid out over the course of the past year for such services were paid in error and must be refunded. Unfortunately, this is a not uncommon occurrence in the world of reimbursement. Despite our desire to assume that being paid for a service constitutes legitimate reimbursement, this is not always the case and nothing is more frustrating than to have to pay back monies to which we thought we were entitled.

Clearly, the value of a medical service should not be assessed only in terms of reimbursement potential. Such thinking demeans the specialist and only feeds payor cynicism with regard to physician motives. If a service is valuable and truly justifies separate reimbursement, its costs, risks and benefits should be argued with reliable and empirical data. Just as we should not be too quick to accept current reimbursement patterns as a prediction of future revenue potential, neither should we be deterred by the political and strategic challenges to a reasonable fee schedule payment. Wanting to get paid for a particular service and believing it has value is not enough. Demonstrating the value, however, and getting those who hold the purse strings to accept it is an entirely different matter and a goal worthy of persistent commitment. If there is one thing the experience of the past few decades has taught us, it is never easy to predict how reimbursement decisions will ultimately get resolved.

Jody Locke, CPC, serves as Vice President of Pain and Anesthesia Management for ABC. Mr. Locke is responsible for the scope and focus of services provided to ABC’s largest clients. He is also responsible for oversight and management of the company’s pain management billing team. He will be a key executive contact for the group should it enter into a contract for services with ABC. He can be reached at