10 GI and Endoscopy Managed Care Best Practices

Over the past several years, GI and endoscopy services have been targeted for decreased reimbursements. Already a high volume specialty, it is anticipated that utilization will continue to increase as baby boomers become Medicare beneficiaries. In spite of lowering reimbursements, incorporating a best-practice approach to managed care can lead to ongoing success when providing GI and endoscopy services.

From a business perspective, the foundation of the optimal managed care strategy is remaining cognizant of the fact that endoscopy remains a high volume, lower reimbursement service. Therefore, any managed care strategy must include an emphasis on preserving rates for existing services and pricing new services at appropriate levels, as opposed to allowing reimbursements to decline. Furthermore, a continued awareness of operating efficiency and coding accuracy is necessary to maximize on the revenue opportunities associated with these services.

Here are 10 best practices followed by successful endoscopy centers.

1. Remain attentive to annual changes in CMS reimbursement for high volume procedures. Medicare rates for commonly performed services are being modified, with some procedures increasing while others are decreasing (see Table 1). Due to the fact that most existing or planned endoscopy centers (or those multi-specialty facilities delivering endoscopy services) experience a significant Medicare patient mix, these rate changes are meaningful.

Table 1

Further modifications to rates are expected again in 2010 and 2011 and should also be monitored for their expected impact to operating revenues.

2. Check in on the terms of your existing managed care contracts, especially around the start of a new year. If your commercial payors are linked to CMS, the start of the new year may result in changes to your contract allowables. For instance, at the beginning of 2009 you may have seen changes similar to those illustrated above. 2009 is the second year of CMS's planned four year transition. However, if your commercial contracts are linked to Medicare's previous, grouper-based reimbursement system, you may find it more advantageous to continue contracting under this methodology if possible. Analysis of the two different systems is advisable, and the decision to modify a contract may ultimately depend on your procedure mix.

3. Ensure managed care contract terms include a provision for adding new codes or adjusting with coding changes as they are released by CMS and/or the AMA. Payors deal with newly added CPT codes in different ways, and understanding the methodology for how each contract addresses new codes is important. Understand whether new codes default to a non-grouped rate, a percent of billed charge or are not covered. As it relates to endoscopy centers, 2009 saw limited changes in CPT codes. New 2009 CPTs which were also added to CMS's procedure list include:

43273 – Endoscopic cannulation of papilla
46930 – Destruction of internal hemorrhoids by thermal energy

Incidentally, the following codes were removed and replaced with new codes: 46934, 46935 and 46936. The question for commercial payors is how will they be paying for these newly created codes? Centers must remain committed to monitoring annual changes and communicating to billing staff at the start of the year to prevent errors and/or rejections by commercial payors and CMS.

4. Monitor trends in physician reimbursements whenever possible. Professional reimbursements are often impacted by changes to facility compensation, and increases to facility payments can result in offsets to professional compensation. Commercial payors' continued use of site-of-service adjustments (already common in endoscopy) further illustrates this concern. Facilities should remain aware of payor adjustments to professional rates, which may impact near and long-term referral patterns.

5. Understand the use of payor-defined "incidental-to" procedures. Commercial payors are free to create their own reimbursement systems and methodologies. While many utilize what we all know as "groupers," it is very common for payors to use modifications to standard grouping methodologies to their benefit. Some commercial payors designate codes as incidental and assign a classification to these incidental procedures which provides no incremental reimbursement when these codes are billed in conjunction with other codes considered primary. Some examples of common endoscopy procedures labeled as incidental-to by a regional Blues plan include 43200 (esophagoscopy, rigid or flexible; diagnostic, with or without collection of specimen) and 43234 (upper GI endoscopy, exam). Of course, each plan is different and centers need to request copies of grouper assignments from payors with whom they have contracted to determine specific exposure to incidental-to procedures. Understand each payor's grouper assignments, whether any codes listed are considered incidental to another code, and if so what impact will it have on payments

6. Remain attentive to how payors reimburse multiple procedures. Many commercial payors do not follow CMS guidelines. What may appear as CMS rates in terms of allowables could actually result in reimbursement that is less than equal to CMS if multiple procedure reimbursement terms result in further devaluation of secondary procedures. Many commercial payors will modify multiple procedure reimbursement terms, lowering the allowable percentage or discontinuing payment after a certain number of procedures. As is the case with incidental-to procedures, payor-specific modifications to multiple procedure reimbursements can have the undesired effect of reimbursements that are below even area adjusted CMS allowables.

7. Recognize the value of correct billing and coding. A common mistake in facilities involves undercoding and/or missed opportunities to code for services performed. Attention to coding and frequent coding audits to ensure accurate billing for occurs and captures all eligible services. When in doubt it's generally advisable to code and bill commercial payors and let them apply their internal multiple procedure of incident-to rules. It is generally unadvisable to assume commercial carriers use identical claims editing rules. Endoscopy services include a broad range of codes that progressively detail the description and documentation of services provided. Success begins with understanding the differences and documenting the services accurately.

8. Proceed cautiously when considering relationships with payors calling themselves networks. Large national networks, often referred to as "rental networks" or "PPO networks," exist to lease access to contractual discounts and many offer these networks to any payor willing to pay a fee to access the discounts. Furthermore, it is common to find clauses contained within contracts that suggest a discount from state fee schedule for Medicaid, CMS, and other payors. These discounts will generally result in further reductions in allowables. These contracts often take the approach of suggesting a fee schedule for services provided to commercial members and discounts from state rates on all other products, for these are generally payors who are seeking those state and CMS contracts for re-pricing.

9. Understand the impact of Medicare Advantage Products. Endoscopy centers deliver a large volume of services to a senior population, so Medicare Advantage agreements can have a significant impact on reimbursements. Commercial payors frequently include Medicare Advantage products with their commercial contract negotiations. Confirm that the Medicare Advantage contract is clear that it will pay at least 100 percent of Medicare. There are always opportunities to request more, especially from upstart plans that are attempting to enter into a new market. Endoscopy providers should anticipate increased exposure to Medicare product contracting requests as CMS continues to outsource claims management via Medicare Advantage plans.

10. Consider that it may not be the optimal business practice to enter into a contract with every willing payor. A managed care contract is, by its very nature, an agreement to discount the cost of the services you provide. Logically this makes sense for payors who represent volume. For payors without substantial patient volume, the time and effort it takes to review, negotiate and administer a contract may quickly offset the benefit of having the contract in place. Administering dozens and dozens of contracts is a challenge to say the least, and generally results in confusion and an inability to audit and monitor payments. Also, out-of-network reimbursement rates may actually be higher than potential contracted rates. And, as mentioned above, it isn't always beneficial to enter into agreements with rental network payors. Accepting contracts with a limited number of your payors is remarkably easier and more efficient to manage. Then, some centers utilize an "all other" contracting philosophy. For smaller payors, you could request a percent of billed charge contracting format. Every payor can administer percent of billed charges; the only limitation is whether or not they will agree to it.

Strategic plan can yield strong benefits
With a finely-tuned managed care strategy in place, the anticipated changes to endoscopy utilization and reimbursement can be optimized. As the general population continues to age, the resulting need for endoscopic services is expected to affect the business of running an endoscopy center. Increasing demand and fixed budgets could result in reductions in CMS allowables per service beyond 2011, and it stands to reason that if the demand side increases and CMS budgets are required to remain neutral, the payments per service could decline. Monitor CMS and your commercial payor agreements closely to stay ahead of changes and anticipate an ongoing need causing downward pressure on reimbursements. By incorporating a best-practices approach to managed care, endoscopy practices can continue to achieve ongoing success.

Note: CPT codes are copyrighted by the AMA.

Mr. Kilton (mattk@eveia.com) is a member and the COO of Eveia Health Consulting & Management, a company comprised of a team of seasoned professionals who are experts in reimbursement management, managed care contracting, and business management with a specialization in ASCs and surgical practices. Learn more about Eveia at www.eveia.com.