Differentiating across categories instrumental to establishing accurate value
The Current Procedural Terminology (CPT) system is evolving with the ultimate goal of fair payment that considers procedural/device intensity, time, and postoperative care.
Reviewed by Cynthia Mattox, MD
As surgeons are aware, the Current Procedural Terminology (CPT) system-maintained/copyrighted by the American Medical Association-comprises five-digit codes that define all physician services ranging from testing codes to examination visit codes to surgical codes. Of these, the Category I codes are the main codes for which payments are easily made, according to Cynthia Mattox, MD.
She explained that there are criteria to determine if physicians can have a Category I code, which mandates use of an FDA-approved drug if a Category I code is involved and the surgery must be performed extensively countrywide by multiple providers, and have well-documented reported efficacy in the peer-reviewed literature. CPT codes are used in conjunction with ICD-9-CM or ICD-10-CM numerical diagnostic coding during the electronic medical billing process.
“These criteria have recently been stepped up and the bar is higher,” said Dr. Mattox, who spoke on behalf of David Glasser, MD, at the recent American Glaucoma Society annual meeting and is immediate past president of the organization.
A code value is established after a CPT code has been established and described by the CPT Committee. The code valuation system, which was first introduced in 1992, is the resource-based relative value system. Then a different committee, which is comprised of volunteer physicians from all medical specialties, attempts to devise a relative value unit that encompasses a number of factors, i.e., the physician work involved in the procedure, the practice expense, and an amount to cover professional liability insurance.
The value of these factors is then combined with the entire spectrum of medical treatment to obtain a value that is relative to all other specialties, for example, appendectomy and breast cancer surgery. The committee bases its decisions on information provided by the various societies for each medical specialty after a random survey of physicians who perform the procedure or test.
The committee then makes a payment recommendation to Centers for Medicare and Medicaid Service (CMS), which ultimately makes the final decision on the code valuation. The value determined by the CMS now is added to the proposed rules in July of each year, then a period is allowed for comments about the valuation, and the ultimate determination of the service’s value is published in the November Final Rule, Dr. Mattox explained.
“Physician work is complicated, but in this system the time required to perform the service, the intensity and technical difficulty of the service, the mental judgement involved in the service, and the stress related to potential harm to the patients are all involved in the formula,” she said.
This combination of factors is reported by physicians in a survey, the results of which are synthesized by a team at the American Academy of Ophthalmology. Once the components are determined, a conversion factor that comes out annually is implemented that applies to all medical specialties. Among the factors mentioned previously, Dr. Mattox demonstrated how important the practice expense is in the equation.
“It is substantial, almost half of the full value of the code,” she said. “The practice expense includes the postoperative visits and the technician time and cost.”
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Category III codes
“Inclusion in Category III is intended to allow time for more data collection, more efficacy, and perhaps an FDA pivotal trial,” Dr. Mattox said. “When the codes are developed, they are automatically assigned to a non-covered list of codes in the Medicare system. Our goal, if we want access to these technologies, is to have the non-covered status removed to allow them to be covered.”
Coverage of new technologies is accomplished region by region with the involvement of each the numerous Medicare carriers. Coverage still involves the scientific data presented to the medical directors at the Medicare carriers; coverage can involve a consensus of a society or organization or conversations between a medical director and colleagues. The bottom line is that a great deal of effort is involved in procuring Category III coverages implemented.
Dr. Mattox pointed out that no set rules are involved in how the medical directors in the various regions decide on coverage or pricing of the procedures. The Category III codes are not specific for a device, and difficulties may arise when trying to determine where a device fits within an existing code. Dr. Mattox explained that the valuation that is in place and historical shows a great deal of intraoperative time and a lot of differentiation in the payment.
In December, via a CPT assistants’ guidance document, the canaloplasty code (66174) was issued and is the proper code for a novel glaucoma treatment system (OMNI, Sight Sciences). “Our family of surgical codes is evolving,” Dr. Mattox concluded.
“Each move to a new Category I code requires a re-evaluation of entire categories of code. There will be some inequities until the area evolves further. “The ultimate goal is to align procedure payment in a fair fashion and make payments relative again to the intensity, time, and postoperative care,” she said.
Cynthia Mattox, MD
Dr. Mattox has no financial interest in any material presented in this report.