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Administrators at facilities that perform general surgery have a few reasons to smile when they review Medicare's new ASC payment system. Laparoscopic cholecystectomy, the long-awaited and oft-lobbied-for procedure, finally joins the approved ASC list. The four-year transition to the fully implemented rates will also let centers turn a profit on some already approved procedures. If general surgery is a staple of your ASC, you'll want to review Medicare's payment system for new revenue opportunities. Here's a start.
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6 Procedures to Grow By | ||||
CPT |
Description |
2007 Rate |
2008 Rate |
Fully Implemented Rate |
55040 | Removal of hydrocele | $510 | $700.03 | $1,270.13 |
37722 | Ligate or strip long leg veins | $510 | $823.54 | $1,764.15 |
46706 | Repairing an anal fistula | $333 | $561.92 | $1,248.68 |
49320 | Diagnostic laparoscopy | $510 | $738.51 | $1,424.02 |
38745 | Removal of axillary lymph nodes | $630 | $931.27 | $1,835.06 |
49651 | Laparoscopic hernia repair | $995 | $1,217.52 | $1,885.06 |
ASCs can now bill for a basic lap chole (CPT code 47562), lap chole with cholangiogram (47563) and lap chole with exploration of the common bile duct (47564). Each of these is reimbursed at $1,885.06.
Lap chole is reimbursed at the fully implemented payment rate because it's an added procedure. Reimbursements for procedures already on the approved list, however, will increase as the new payment system is transitioned over a four-year period. Some procedures that are already approved for the ASC setting will be worth a little more in the coming years (see "6 Procedures to Grow By").
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General Coding Advice | ||
The 10 codes below are newly added procedures for ASCs that aren't considered office based and therefore are reimbursed at a more favorable rate. Although most of the following codes sit under the general surgery umbrella, some may fall into other specialties. However, they are important enough to bring to your attention. The rate allowed for procedures added in 2008 is the expected full reimbursement with no four-year transition. However, as with all estimated rates, the proposed amounts beyond this year are based on 2008 payment weights and 2008 HOPD rates with no allowance for annual increases or decreases. A quick review of the preceding table might make you think that general surgery has hit the CMS jackpot. However, adding codes or increasing reimbursement is certainly less difficult than adding a specialty or a new procedure to an ASC. For example, three CPT codes are in play for laparoscopic cholecystectomy, the long-awaited addition to the Medicare approved payment list. It's important to know the differences between the procedure codes and how those differences affect your per-procedure expense.
The length of each procedure is a contributing factor in its expense. Also consider the cost of X-ray or ultrasound equipment and the appropriate personnel to operate the equipment. Additional surgical instruments and supplies may be required for duct exploration. When case costing lap chole, first understand the potential difference in expenses for each procedure code. You may find yourself soliciting general surgeons to join your staff after careful case costing lets you know which new procedures are viable. — Judith L. English Ms. English is vice president of business operations for Surgery Consultants of America and Surgery Center Billing in Fort Myers, Fla. |
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10 Procedures Added in 2008 | ||
CPT | Description | 2008 |
19396 | Design custom breast implant | $1,312.97 |
21138 | Reduction of forehead | $1,650.97 |
37184 | Prim art mech thrombectomy | $1,605.00 |
37187 | Venous mech thrombectomy | $1,605.00 |
37765 | Phleb veins extrem 10-20 | $1,069.84 |
47382 | Percut ablate liver rf | $1,780.16 |
47562 | Laparoscopic cholecystectomy | $1,885.06 |
47563 | Laparo cholecystectomy/graph | $1,885.06 |
47564 | Laparo cholecystectomy/explr | $1,885.06 |
50590 | Fragmenting of kidney stone | $1,719.38 |
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Case Costs | ||||
Procedure | Supply Cost | Overhead | Total Cost | 2008 MCR Rate |
Laparoscopic cholecystectomy | $536.10 | $930 | $1,466.10 | $1,885.06 |
Laparoscopic hernia | $798 | $930 | $1,728 | $1,217.52 |
Removal of axillary lymph nodes | $105.23 | $698 | $803.23 | $931.27 |
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How We Save on Supplies |
As a multi-specialty facility, we've been preparing for the new general surgery reimbursements since the Ambulatory Surgery Center Association (FASA at the time) informed us of the coming changes early last year. We were already getting paid for laparoscopic cholecystectomies and hernia repairs performed on Medicare patients, thanks to an exemption from the Pennsylvania Department of Health. Even though reimbursements didn't cover the procedures' costs, we decided that the hit we took was worthwhile, figuring our general surgeons would perform other profitable procedures while at our facility. With the Medicare reimbursement changes in place, we are now in a position to increase our general surgery case volumes by more than 20 percent. Lap choles and hernia repairs typically take about 45 minutes to perform. You need quality endoscopic scopes and cameras (these days surgeons want high-definition images) and a supply of trocars. Specialized disposable equipment can increase case expenses. The disposable harmonic scalpels favored for cholecystectomies cost about $450 and the balloons for laparoscopic hernia can range from $180 to $300. It's hard to get a good price on these devices, even if you're working with a GPO. So to save money, you have to look at reducing the costs of other supplies — suture, tubing and drapes, for example — by constantly re-evaluating the prices your vendors charge for the supplies you use the most. We decided to buy bulk purchases through one supplier. That worked well. Our 2007 supply costs were 3 percent lower than they were in 2006, even though we performed 9 percent more cases. — Pam Ertel, RN, BSN, CNOR, RNFA, FABC, CASC Ms. Ertel is administrative director of the Reading Hospital Surgicenter at Spring Ridge in Wyomissing, Pa. |
When reviewing these procedures, remember that, even though they pay more, they still may not be profitable at your facility. Take a careful look at your costs per patient compared to the reimbursements to find out how much your ASC stands to gain — or lose — by adding these procedures.
For example, let's say you're thinking about adding lap chole, laparoscopic hernia repair and removal of axillary lymph nodes to the procedures you perform on Medicare patients. Determine the cost of these surgeries before you encourage your surgeons to schedule them, including the expense of all supplies used in pre-op, the OR and recovery areas as well as the fixed and variable operating expenses for your facility. How you allocate these operating expenses to each patient depends on your surgery center's software or corporate policy. In general, most facilities that case cost allocate the variable and fixed expenses on a per-minute basis or equally to each patient based on an estimate of annual volume.
See "Case Costs" on page 28 for sample supply expenses of three procedures you might consider hosting. The supply costs include mesh, packs, suture, staplers, IV solutions, IV catheters, medications and anesthesia supplies. The overhead was set at $15.50 per minute and based on total OR time.
The profit margins for lap chole and removal of axillary lymph nodes are good, but an ASC would stand to lose more than $500 for each laparoscopic hernia repair performed on Medicare patients. The supply costs are high because the typical cost of the mesh and the stapler is approximately $350 to $450. There's no practical way of reducing the cost of this case. But in 2011, when the fully implemented rate of $1835.06 is in place, the case will likely be profitable for your facility.
Analyze the approved procedures for all of the specialties performed in your facility and determine if the reimbursement is adequate for your facility to host the cases. Some procedures may not be profitable until 2009 or 2010. If that's the case, you may have to wait before initiating them.
Fully equipped
Adding new general surgery procedures won't demand a large capital equipment investment for facilities already offering general surgery, gynecology, orthopedics or otolaryngology endoscopy. Performing lap choles may require a few specialized scopes, forceps and graspers, but otherwise they can be done in any OR equipped for laparoscopy or endoscopy. Facilities that aren't so equipped will be facing a significant investment. Video towers can be expensive, usually costing between $75,000 and $100,000. The required instrumentation and scopes can add up to $80,000. Finally, the initial supply costs for staplers, disposables and meshes can add another $10,000 to the startup fee.
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