Orthopedic Billing and MPPR for Selected Therapy Services

medical billing ortho HISI am sure you are already very familiar with the fact that the Centers for Medicare and Medicaid Services (CMS) applies a Multiple Procedure Payment Reduction, when more than one coded procedure is performed at the same time on a given patient.  Of course, the other commercial insurance carriers do the same.  

The idea being that as long as the patient is present at the clinic or facility to have one procedure performed, whether simple or complex, it doesn’t require as much to perform another unrelated procedure.  So the payers don’t think they should have to pay full price for both procedures.  This being the case I am sure you have all learned to put the most expensive procedure first so it gets paid at the full “allowable” price, and then add any lower priced procedures in second and third place.

What you may not be aware of is that Medicare has been applying the same logic to Selected Therapy Services.  The CMS has been applying a 20% reduction to the Practice Expense (PE) portion of the multiple procedures provided in an office or other non-institutional setting, since January, 2011.  For those procedures provided in an institution, the reduction rate was 25%.  

You probably already know that each CPT code has a specific Relative Value Unit (RVU) attached to it.  Each RVU is composed of three elements; the Physician Work component, the Practice Expense (PE) component and the Malpractice component.  The RVUs are then multiplied by a Conversion Factor (CF) and Geographical Practice Cost Indices (GPCI) to come up with the payment for a particular procedure.  So, if a selected therapy service, such as Physical Therapy (PT) is provided to a patient consisting of two 15 minute units of service for one procedure and a 15 minute unit of service for a second procedure, here is how it would be paid.  


As of April 1st of this year, 2013, the MPPR for the selected therapy services has been raised to a 50% reduction of the PE, and applies equally to both the institution and non-institution places of service.

So if you have a Physical Therapy or Occupational Therapy clinic as part of your practice, providing PT or OT services “incident to” your physician services, these reductions apply to all services provided on the same day.  This holds true even if different types (OT vs PT or Speech Therapy) of services are performed even in different locations.

If your in-office physical therapy service has been billing on fifteen minute increments, but providing 30 minutes of service,  you might want to take another look.  Under the old system, if the second 15 minute unit was paid at 80% for the PE portion, the entire treatment was being reimbursed at over 95%.  So there was really very little advantage for instituting a new 30 minute unit of service.

chart2Under the new MPPR system you may want to see if it is appropriate and possible to implement a longer unit of service to offset the 50% PE reduction.  In the scenario below the fifty per cent reduction for PE creates a 15% reduction over all.  

chart3Of course these figures are for demonstration purposes only.  You would need to check your own reimbursement figures to see how they would apply.  If you have additional questions, we at Healthcare Information Services, LLC would be happy to help.


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