DPH 2004DPH 2004

Maintaining and Maintaining and Expanding Expanding

Reimbursement Reimbursement Opportunities in Mental Opportunities in Mental

Health: Health: Medicare as a Benchmark Medicare as a Benchmark

DPH 2004DPH 2004

Women & Children’s Health Women & Children’s Health NetworkNetwork

Division of Public HealthDivision of Public HealthChapel Hill, North CarolinaChapel Hill, North Carolina

May 12, 2004May 12, 2004

Antonio E. Puente, Ph.D.Antonio E. Puente, Ph.D.

Department of PsychologyDepartment of Psychology

University of North Carolina at WilmingtonUniversity of North Carolina at Wilmington

Wilmington, NC 28403Wilmington, NC 28403

DPH 2004DPH 2004

Contact InformationContact Information

• WebsitesWebsites– Univ = Univ = www.uncw.edu/people/puentewww.uncw.edu/people/puente– Practice = www.clinicalneuropsychology.usPractice = www.clinicalneuropsychology.us

• E-mailE-mail– University = University = Puente@uncw.eduPuente@uncw.edu– Practice = Puente@clinicalneuropsychology.usPractice = Puente@clinicalneuropsychology.us

• TelephoneTelephone– University = 910.962.3812University = 910.962.3812– Practice = 910.509.9371Practice = 910.509.9371

DPH 2004DPH 2004

AcknowledgmentsAcknowledgmentsDepartment of Psychology, UNC-WilmingtonDepartment of Psychology, UNC-WilmingtonNCPA Board of Directors, Practice Division, & NCPA Board of Directors, Practice Division, &

StaffStaffNAN Board of Directors, Executive Directors’ NAN Board of Directors, Executive Directors’

Office, Policy and Planning Committee, & Office, Policy and Planning Committee, & Professional Affairs and Information OfficeProfessional Affairs and Information Office

Division 40 Board of Directors & Practice Division 40 Board of Directors & Practice CommitteeCommittee

Practice Directorate of the American Practice Directorate of the American Psychological AssociationPsychological Association

American Medical Association’s CPT StaffAmerican Medical Association’s CPT StaffCMS Medical Policy StaffCMS Medical Policy StaffSelected Individuals (e.g., Jim Georgoulakis)Selected Individuals (e.g., Jim Georgoulakis)

DPH 2004DPH 2004

BackgroundBackground(1988 – present)(1988 – present)

North Carolina Psychological Association (e)North Carolina Psychological Association (e)APA’s Policy & Planning Board; Div. 40 (e)APA’s Policy & Planning Board; Div. 40 (e)American Medical Association’s Current American Medical Association’s Current

Procedural Terminology Committee (IV/V) (a)Procedural Terminology Committee (IV/V) (a)Health Care Finance Administration’s Working Health Care Finance Administration’s Working

Group for Mental Health Policy (a)Group for Mental Health Policy (a)Center for Medicare/Medicaid Services’ Center for Medicare/Medicaid Services’

Medicare Coverage Advisory Committee (fa)Medicare Coverage Advisory Committee (fa)Consultant with the North Carolina Medicaid Consultant with the North Carolina Medicaid

Office;North Carolina Blue Cross/Blue Shield Office;North Carolina Blue Cross/Blue Shield (a)(a)

NAN’s Professional Affairs & Information Office NAN’s Professional Affairs & Information Office (a)(a)

(legend; a = appointment, fa = federal (legend; a = appointment, fa = federal appointment, e = elected)appointment, e = elected)

DPH 2004DPH 2004

Purpose of PresentationPurpose of Presentation

• Increase ReimbursementIncrease Reimbursement

• Increase Range, Type & Quality of ServicesIncrease Range, Type & Quality of Services

• Decrease Fraud & AbuseDecrease Fraud & Abuse

• Provide Guidelines for Professional ServicesProvide Guidelines for Professional Services

• Maintain Professional Stature Within Maintain Professional Stature Within PsychologyPsychology

• Increase Professional Stature in Health Increase Professional Stature in Health Care, in general Care, in general

DPH 2004DPH 2004

Outline of PresentationOutline of Presentation

• MedicareMedicare

• Current Procedural Terminology: Basic Current Procedural Terminology: Basic

• Current Procedural Terminology: Current Procedural Terminology: RelatedRelated

• Relative Value UnitsRelative Value Units

• Current Problems & Possible SolutionsCurrent Problems & Possible Solutions

• Future Directions & ProblemsFuture Directions & Problems

• ResourcesResources

DPH 2004DPH 2004

Outline: HighlightsOutline: Highlights

• New CodesNew Codes

• Expanding ParadigmsExpanding Paradigms

• Fraud, Abuse; Coding & Fraud, Abuse; Coding & DocumentationDocumentation

• The Problem with TestingThe Problem with Testing

DPH 2004DPH 2004

Medicare: OverviewMedicare: Overview

• Why Focus on MedicareWhy Focus on Medicare

• The Medicare ProgramThe Medicare Program

• Local Medical Review (policy & Local Medical Review (policy & panels)panels)

DPH 2004DPH 2004

Medicare: WhyMedicare: Why

• TheThe Standard Standard – CodingCoding– ValueValue– DocumentationDocumentation

• Approximately 50% for InstitutionsApproximately 50% for Institutions• Approximately 33% for Outpatient OfficesApproximately 33% for Outpatient Offices• Becoming the Standard for Workers Comp.Becoming the Standard for Workers Comp.• Increasing Percentage for Forensic WorkIncreasing Percentage for Forensic Work

DPH 2004DPH 2004

Medicare: OverviewMedicare: Overview

• New Name: HCFA now CMSNew Name: HCFA now CMS– Centers for Medicare and Medicaid ServicesCenters for Medicare and Medicaid Services

• New Charge: SimplifyNew Charge: Simplify

• New Organization: Beneficiary, Medicare, New Organization: Beneficiary, Medicare, MedicaidMedicaid

• BenefitsBenefits– Part A (Hospital)Part A (Hospital)– Part B (Supplementary)Part B (Supplementary)– Part C (Medicare+ Choice)Part C (Medicare+ Choice)

DPH 2004DPH 2004

Medicare: Local ReviewMedicare: Local Review

• Local Medical Review PolicyLocal Medical Review Policy– LMRP vs National PolicyLMRP vs National Policy– Location of LMRPsLocation of LMRPs

• Carrier Medical DirectorCarrier Medical Director– A Physician-based ModelA Physician-based Model

• Policy PanelsPolicy Panels– Lack of Understanding of Their RolesLack of Understanding of Their Roles– Lack of Representation on Such PanelsLack of Representation on Such Panels

DPH 2004DPH 2004

Medicare PaymentMedicare Payment(since 1993)(since 1993)

• Surgical Surgical – Higher Reimbursement than CognitiveHigher Reimbursement than Cognitive

• CognitiveCognitive– Physician Cognitive WorkPhysician Cognitive Work– Supporting Equipment & StaffSupporting Equipment & Staff

DPH 2004DPH 2004

Current Procedural Current Procedural Terminology: OverviewTerminology: Overview

• BackgroundBackground

• Codes & CodingCodes & Coding

• Existing CodesExisting Codes

• Model System X Type of ProblemModel System X Type of Problem

• Medical NecessityMedical Necessity

• DocumentingDocumenting

• TimeTime

DPH 2004DPH 2004

CPT: BackgroundCPT: Background

• American Medical AssociationAmerican Medical Association– Developed by Surgeons (& Physicians) Developed by Surgeons (& Physicians)

in 1966 for Billing Purposesin 1966 for Billing Purposes– 7,500+ Discrete Codes7,500+ Discrete Codes

• CMSCMS– AMA Under License with CMSAMA Under License with CMS– CMS Now Provides Active Input into CPTCMS Now Provides Active Input into CPT

DPH 2004DPH 2004

CPT: Background/DirectionCPT: Background/Direction

• Current System = CPT 5Current System = CPT 5

• CategoriesCategories– I= Standard Coding for Professional I= Standard Coding for Professional

ServicesServices– II = Performance MeasurementII = Performance Measurement– III = Emerging TechnologyIII = Emerging Technology

DPH 2004DPH 2004

CPT: Applicable CodesCPT: Applicable Codes

• Total Possible Codes = Approximately 7,500Total Possible Codes = Approximately 7,500• Possible Codes for Psychology = Possible Codes for Psychology =

Approximately 40 to 60Approximately 40 to 60• Sections = Five Separate SectionsSections = Five Separate Sections

– PsychiatryPsychiatry– BiofeedbackBiofeedback– Central Nervous AssessmentCentral Nervous Assessment– Physical Medicine & RehabilitationPhysical Medicine & Rehabilitation– Health & Behavior Assessment & ManagementHealth & Behavior Assessment & Management– Possibly, Evaluation & Management Possibly, Evaluation & Management

DPH 2004DPH 2004

CPT: Development of a CPT: Development of a CodeCode

• InitialInitial– Health Care Advisory Committee (non-Health Care Advisory Committee (non-

MDs)MDs)

• PrimaryPrimary– CPT Work GroupCPT Work Group– CPT PanelCPT Panel

• Time FrameTime Frame– 3-5 years3-5 years

DPH 2004DPH 2004

CPT: PsychiatryCPT: Psychiatry

• SectionsSections– Interview vs. InterventionInterview vs. Intervention– Office vs. InpatientOffice vs. Inpatient– Regular vs. Evaluation & ManagementRegular vs. Evaluation & Management– OtherOther

• Types of InterventionsTypes of Interventions– Insight, Behavior Modifying, and/or Insight, Behavior Modifying, and/or

Supportive vs. InteractiveSupportive vs. Interactive

DPH 2004DPH 2004

CPT: Psychiatry (cont.)CPT: Psychiatry (cont.)

• Time ValueTime Value– 30, 60, or 9030, 60, or 90

• InterviewInterview– 9080190801

• InterventionIntervention– 90804 - 9085790804 - 90857

DPH 2004DPH 2004

CPT: BiofeedbackCPT: Biofeedback

• Psychophysiological TrainingPsychophysiological Training– 9090190901

• BiofeedbackBiofeedback– 9087590875

DPH 2004DPH 2004

CPT: CNS AssessmentCPT: CNS Assessment

• InterviewInterview– 9611596115

• TestingTesting– Psychological = 96100; 96110/11Psychological = 96100; 96110/11– Neuropsychological = 96117Neuropsychological = 96117– Other = 96105, 96110/111Other = 96105, 96110/111

DPH 2004DPH 2004

CPT: Physical Medicine & CPT: Physical Medicine & RehabilitationRehabilitation

• 97770 now 9753297770 now 97532

• Note: 15 minute incrementsNote: 15 minute increments

DPH 2004DPH 2004

CPT: Health & Behavior CPT: Health & Behavior Assessment & Assessment & ManagementManagement

• Purpose: Medical DiagnosisPurpose: Medical Diagnosis

• Time: 15 Minute IncrementsTime: 15 Minute Increments

• AssessmentAssessment

• InterventionIntervention

DPH 2004DPH 2004

CPT: ModifiersCPT: Modifiers

• AcceptabilityAcceptability– Medicare = about 100%Medicare = about 100%– Others = approximating 90%Others = approximating 90%

• ModifiersModifiers– 22 = unusual or more extensive service22 = unusual or more extensive service– 51 = multiple procedures51 = multiple procedures– 52 = reduced service52 = reduced service– 53 = discontinued service53 = discontinued service

DPH 2004DPH 2004

CPT: Model SystemCPT: Model System

• PsychiatricPsychiatric

• NeurologicalNeurological

• Non-Neurological MedicalNon-Neurological Medical

• Possibly, Evaluation & ManagementPossibly, Evaluation & Management

DPH 2004DPH 2004

CPT: Psychiatric ModelCPT: Psychiatric Model(Children & Adult)(Children & Adult)• InterviewInterview

– 9080190801

• TestingTesting– 96100, or96100, or– 96110/1196110/11

• InterventionIntervention– e.g., 90806e.g., 90806– The challenge of New MexicoThe challenge of New Mexico

DPH 2004DPH 2004

CPT: Neurological ModelCPT: Neurological Model(Children & Adult)(Children & Adult)

• InterviewInterview– 9611596115

• TestingTesting– 9611796117

• InterventionIntervention– 9753297532

DPH 2004DPH 2004

CPT: Non-Neurological CPT: Non-Neurological Medical ModelMedical Model(Children & Adult)(Children & Adult)

• Interview & AssessmentInterview & Assessment– 96150 (initial)96150 (initial)– 96151 (re-evaluation)96151 (re-evaluation)

• InterventionIntervention– 96152 (individual)96152 (individual)– 96153 (group)96153 (group)– 96154 (family with patient)96154 (family with patient)– 96155 (family without patient)96155 (family without patient)

DPH 2004DPH 2004

CPT: New ParadigmsCPT: New Paradigms

• Initial PsychiatricInitial Psychiatric

• Next NeurologicalNext Neurological

• Now MedicalNow Medical

• Medical as Evaluation & ManagementMedical as Evaluation & Management

DPH 2004DPH 2004

CPT: Evaluation & CPT: Evaluation & ManagementManagement• Role of Evaluation & Management CodesRole of Evaluation & Management Codes

– ProceduresProcedures– Case ManagementCase Management

• Limitations Imposed by AMA’s House of Limitations Imposed by AMA’s House of Delegates for CMS but not for Private PayersDelegates for CMS but not for Private Payers

• Health & Behavior Codes as an Alternative to Health & Behavior Codes as an Alternative to E & M CodesE & M Codes

• The Use of E & M Codes is Accepted by Some The Use of E & M Codes is Accepted by Some Third Party Reimburses (e.g., MedCost)Third Party Reimburses (e.g., MedCost)– Example; 99201 New PatientExample; 99201 New Patient

DPH 2004DPH 2004

CPT: DiagnosingCPT: Diagnosing

• PsychiatricPsychiatric– DSMDSM

•The problem with DSM and neuropsych testing The problem with DSM and neuropsych testing of developmentally-related neurological of developmentally-related neurological problemsproblems

• Neurological & Non-Neurological MedicalNeurological & Non-Neurological Medical– ICD (or see NAN Paio web page; ICD (or see NAN Paio web page;

membership directory)membership directory)– Neurological Code Updates Available by Neurological Code Updates Available by

01.01.0301.01.03

DPH 2004DPH 2004

CPT: Medical NecessityCPT: Medical Necessity

• Scientific & Clinical NecessityScientific & Clinical Necessity• Local Medical Review or Carrier Local Medical Review or Carrier

Definitions of NecessityDefinitions of Necessity• Necessity = CPT x DXNecessity = CPT x DX• Necessity Dictates Type and Level of Necessity Dictates Type and Level of

ServiceService• Necessity Can Only be Proven with Necessity Can Only be Proven with

DocumentationDocumentation

DPH 2004DPH 2004

CPT: Coding MatricesCPT: Coding Matrices

• EMSCO & FraudEMSCO & Fraud

• Underlying Problem = Medical Underlying Problem = Medical Decision MakingDecision Making

• Do not use:Do not use:– Coding MatricesCoding Matrices– GridsGrids– Related ShortcutsRelated Shortcuts

DPH 2004DPH 2004

CPT: DocumentingCPT: Documenting

• PurposePurpose

• Payer RequirementsPayer Requirements

• General PrinciplesGeneral Principles

• HistoryHistory

• ExaminationExamination

• Decision MakingDecision Making

DPH 2004DPH 2004

Documentation: PurposeDocumentation: Purpose

• Medical NecessityMedical Necessity

• Evaluate and Plan for TreatmentEvaluate and Plan for Treatment

• Communication and Continuity of Communication and Continuity of CareCare

• Claims Review and PaymentClaims Review and Payment

• Research and EducationResearch and Education

DPH 2004DPH 2004

Documentation: Payer Documentation: Payer RequirementsRequirements

• Site of ServiceSite of Service

• Medical Necessity for Service Medical Necessity for Service ProvidedProvided

• Appropriate Reporting of ActivityAppropriate Reporting of Activity

DPH 2004DPH 2004

Documentation: General Documentation: General PrinciplesPrinciples• Rationale for ServiceRationale for Service

• Complete and LegibleComplete and Legible

• Reason/Rationale for ServiceReason/Rationale for Service

• Assessment, Progress, Impression, or Assessment, Progress, Impression, or DiagnosisDiagnosis

• Plan for CarePlan for Care

• Date and Identity of ObserveDate and Identity of Observe

• TimelyTimely

• ConfidentialConfidential

DPH 2004DPH 2004

Documentation: Basic Documentation: Basic Information Across All CodesInformation Across All Codes• DateDate• Time, if applicableTime, if applicable• Identify of Observer (technician ?)Identify of Observer (technician ?)• Reason for ServiceReason for Service• StatusStatus• ProcedureProcedure• Results/FindingResults/Finding• Impression/DiagnosesImpression/Diagnoses• DispositionDisposition• Stand AloneStand Alone

DPH 2004DPH 2004

Documentation: Chief Documentation: Chief ComplaintComplaint

• Concise Statement Describing the Concise Statement Describing the Symptom, Problem, Condition, & Symptom, Problem, Condition, & DiagnosisDiagnosis

• Foundation for Medical NecessityFoundation for Medical Necessity

• Must be Complete & ExhaustiveMust be Complete & Exhaustive

DPH 2004DPH 2004

Documentation: Present Documentation: Present IllnessIllness

• SymptomsSymptoms– Location, Quality, Severity, Duration, Location, Quality, Severity, Duration,

timing, Context, Modifying Factors timing, Context, Modifying Factors Associated SignsAssociated Signs

• Follow-upFollow-up– Changes in ConditionChanges in Condition– ComplianceCompliance

DPH 2004DPH 2004

Documentation: HistoryDocumentation: History

• PastPast

• Family Family

• SocialSocial

• Medical/PsychologicalMedical/Psychological

DPH 2004DPH 2004

Documentation:Documentation:Mental StatusMental Status• LanguageLanguage

• Thought ProcessesThought Processes

• InsightInsight

• JudgmentJudgment

• ReliabilityReliability

• ReasoningReasoning

• PerceptionsPerceptions

• SuicidalitySuicidality

• ViolenceViolence

• Mood & AffectMood & Affect

• OrientationOrientation

• MemoryMemory

• AttentionAttention

• IntelligenceIntelligence

DPH 2004DPH 2004

Documentation:Documentation:Neurobehavioral Status Neurobehavioral Status ExamExam• AttentionAttention

• MemoryMemory

• Visuo-spatialVisuo-spatial

• Language Language

• PlanningPlanning

DPH 2004DPH 2004

Documentation: TestingDocumentation: Testing

• Names of Tests (including Names of Tests (including edition/version)edition/version)

• Interpretation of Tests (narrative; Interpretation of Tests (narrative; possibly quantitative)possibly quantitative)

• DispositionDisposition• Time/DatesTime/Dates

– In Hours (rounded to nearest hour)In Hours (rounded to nearest hour)– Document on Day Service is ProvidedDocument on Day Service is Provided– Might be Best to Separate from InterviewMight be Best to Separate from Interview

DPH 2004DPH 2004

Documentation: Documentation: InterventionIntervention

• Reason for ServiceReason for Service

• StatusStatus

• InterventionIntervention

• ResultsResults

• ImpressionImpression

• DispositionDisposition

• TimeTime

DPH 2004DPH 2004

Documentation:Documentation:SuggestionsSuggestions• Avoid Handwritten NotesAvoid Handwritten Notes

• Do Not Use Red InkDo Not Use Red Ink

• Avoid Color PaperAvoid Color Paper

• Document On and After Every Document On and After Every Encounter, Every Procedure, Every Encounter, Every Procedure, Every PatientPatient

• Review Changes Whenever ApplicableReview Changes Whenever Applicable

• Avoid Standard Phrases Avoid Standard Phrases

DPH 2004DPH 2004

Documentation: Ethical Documentation: Ethical IssuesIssues

• How Much and To Whom Should How Much and To Whom Should Information be DivulgedInformation be Divulged

• Medical Necessity vs. ConfidentialityMedical Necessity vs. Confidentiality

• HIPAA vs. DocumentationHIPAA vs. Documentation

DPH 2004DPH 2004

TimeTime

• DefiningDefining– Professional (not patient) Time Including:Professional (not patient) Time Including:

•pre, intra & post-clinical service activitiespre, intra & post-clinical service activities

• Interview & Assessment CodesInterview & Assessment Codes– Generally use hourly incrementsGenerally use hourly increments– For new codes, use 15 minute For new codes, use 15 minute

incrementsincrements

• Intervention CodesIntervention Codes– Use 15, 30, or 60 minute incrementsUse 15, 30, or 60 minute increments

DPH 2004DPH 2004

Time: DefinitionTime: Definition

• AMA Definition of TimeAMA Definition of Time

• Physicians also spend time during work, Physicians also spend time during work, before, or after the face-to-face time with before, or after the face-to-face time with the patient, performing such tasks as the patient, performing such tasks as reviewing records & tests, arranging for reviewing records & tests, arranging for services & communicating further with services & communicating further with other professionals & the patient through other professionals & the patient through written reports & telephone contact.written reports & telephone contact.

DPH 2004DPH 2004

Time (continued)Time (continued)

• Communicating further with othersCommunicating further with others

• Follow-up with patient, family, and/or Follow-up with patient, family, and/or othersothers

• Arranging for ancillary and/or other Arranging for ancillary and/or other servicesservices

DPH 2004DPH 2004

Time: Defined FurtherTime: Defined Further

• Evaluation Versus Therapy TimeEvaluation Versus Therapy Time– Therapy is Essentially Face to FaceTherapy is Essentially Face to Face– Testing is Essentially Professional TimeTesting is Essentially Professional Time

• Inpatient Versus OutpatientInpatient Versus Outpatient

- If Outpatient: face to face only for E - If Outpatient: face to face only for E & M& M

- If Inpatient: time on floor for E & M- If Inpatient: time on floor for E & M

DPH 2004DPH 2004

Time: TestingTime: Testing

• Quantifying TimeQuantifying Time– Round up or down to nearest incrementRound up or down to nearest increment– Testing = 15 or 60 (probably soon 30)Testing = 15 or 60 (probably soon 30)

• Time Does Not IncludeTime Does Not Include– Patient completing tests, forms, etc.Patient completing tests, forms, etc.– Waiting time by patientWaiting time by patient– Typing of reportsTyping of reports– Non-Professional (e.g., clerical) timeNon-Professional (e.g., clerical) time– Literature searches, learning new techniques, etc.Literature searches, learning new techniques, etc.

DPH 2004DPH 2004

Time (continued)Time (continued)

• Preparing to See PatientPreparing to See Patient• Reviewing of RecordsReviewing of Records• Interviewing Patient, Family, and OthersInterviewing Patient, Family, and Others• When Doing AssessmentsWhen Doing Assessments::

– Selection of testsSelection of tests– Scoring of testsScoring of tests– Reviewing resultsReviewing results– Interpretation of resultsInterpretation of results– Preparation and report writingPreparation and report writing

DPH 2004DPH 2004

Reimbursement HistoryReimbursement History

• Cost Plus Cost Plus

• Prospective Payment System (PPS)Prospective Payment System (PPS)

• Diagnostic Related Groups (DRGs)Diagnostic Related Groups (DRGs)

• Customary, Prevailing & Reasonable Customary, Prevailing & Reasonable (CPR)(CPR)

• Resource Based Relative Value Resource Based Relative Value System (RBRVS)System (RBRVS)

DPH 2004DPH 2004

Relative Value Units: Relative Value Units: OverviewOverview

• ComponentsComponents

• UnitsUnits

• ValuesValues

• Current ProblemsCurrent Problems

DPH 2004DPH 2004

RVU: ComponentsRVU: Components

• Physician Work Resource ValuePhysician Work Resource Value

• Practice Expense Resource ValuePractice Expense Resource Value

• MalpracticeMalpractice

• GeographicGeographic

• Conversion Factor (approx. $34)Conversion Factor (approx. $34)

DPH 2004DPH 2004

RVU: ValuesRVU: Values

• Psychotherapy:Psychotherapy:– Prior Value =1.86Prior Value =1.86– New Value = 2.0+ (01.01.02)New Value = 2.0+ (01.01.02)

• Psych/NP Testing: Psych/NP Testing: – Work value= 0Work value= 0– Hsiao study recommendation = 2.2Hsiao study recommendation = 2.2– New Value = undeterminedNew Value = undetermined

• Health & BehaviorHealth & Behavior– .25 (per 15 minutes increments).25 (per 15 minutes increments)

DPH 2004DPH 2004

RVU: AcceptanceRVU: Acceptance

• MedicareMedicare

• Blue Cross/Blue Shield 87%Blue Cross/Blue Shield 87%

• Managed Care 69%Managed Care 69%

• Medicaid 55%Medicaid 55%

• Other 44%Other 44%

• New Trends: New Trends: – RVUs as a Model for All Insurance CompaniesRVUs as a Model for All Insurance Companies– RVUs as a Basis for Compensation FormulasRVUs as a Basis for Compensation Formulas

DPH 2004DPH 2004

CPT x RVUCPT x RVUCPTCode

WorkValue

PracticeExpense

MalpracticeExpense

TotalRVU

MutuallyExclusive

90801 2.80 1.14 0.06 4.00 90802, 90846, 90847,90853, 99291, 99292

90806 1.86 0.75 0.04 2.65 90801 (?)

96100 0 1.67 0.15 1.82 96110, 96 115

96115 0 1.67 0.15 1.82 - // -

96117 0 1.67 0.15 1.82 96110, 96111

96150 0.5 0.2 0.02 0.72 96151, 96152, 96153,96154, 96155

96152 0.46 0.18 0.02 0.66 96150, 96151, 96153,96154, 96155

DPH 2004DPH 2004

Current Problems Current Problems • Definition of PhysicianDefinition of Physician• Incident toIncident to• SupervisionSupervision• Face-to-FaceFace-to-Face• TimeTime• RVUsRVUs• Work ValuesWork Values• Qualification of TechniciansQualification of Technicians• Practice Expense & Testing SurveyPractice Expense & Testing Survey• PaymentPayment• Prospective Payment SystemProspective Payment System• Skilled Nursing FacilitiesSkilled Nursing Facilities• Provider Based FacilitiesProvider Based Facilities• FocusFocus for Fraud & Abuse for Fraud & Abuse

DPH 2004DPH 2004

Current Problems: Current Problems: HighlightsHighlights

• Work Value for Testing CodesWork Value for Testing Codes

• Provision & Coding of Technical Provision & Coding of Technical Services (e.g., who is qualified to Services (e.g., who is qualified to provide them)provide them)

• Mental vs. Physical HealthMental vs. Physical Health

DPH 2004DPH 2004

Problem: Defining PhysicianProblem: Defining Physician

• Definition of a PhysicianDefinition of a Physician– Social Security Practice Act of 1980Social Security Practice Act of 1980– Definition of a PhysicianDefinition of a Physician– Need for Congressional ActNeed for Congressional Act– Likelihood of Congressional ActLikelihood of Congressional Act– The Value of Technical Services of a The Value of Technical Services of a

Psychologist is $.83/hour (second highest after Psychologist is $.83/hour (second highest after physicist)physicist)

– Consequence of the preceding; grouping with Consequence of the preceding; grouping with non-doctoral level allied health providersnon-doctoral level allied health providers

DPH 2004DPH 2004

Problem: Incident toProblem: Incident to

• Rationale for Incident toRationale for Incident to– Congress intended to provide coverage for services Congress intended to provide coverage for services

not typically covered elsewherenot typically covered elsewhere

• Definition of Physician ExtenderDefinition of Physician Extender– HowHow– LimitationsLimitations

• Definition of In vs. OutpatientDefinition of In vs. Outpatient– Geographic Vs FinancialGeographic Vs Financial

• Why No Incident to (DRG)Why No Incident to (DRG)• Solution Available for Some Training ProgramsSolution Available for Some Training Programs• Probably no Future to Incident toProbably no Future to Incident to

DPH 2004DPH 2004

Problem: More Incident toProblem: More Incident to

• When is “Incident to” Acceptable:When is “Incident to” Acceptable:– Testing Testing – Cognitive Rehabilitation; BiofeedbackCognitive Rehabilitation; Biofeedback– PsychotherapyPsychotherapy

• DefinitionDefinition– Commonly furnished serviceCommonly furnished service– Integral, though incidental to psychologistIntegral, though incidental to psychologist– Performed under the supervisionPerformed under the supervision– Either furnished without charge or as part of Either furnished without charge or as part of

the psychologist’s chargethe psychologist’s charge

DPH 2004DPH 2004

Problem: Incident to & Site Problem: Incident to & Site of Serviceof Service

• Outpatient vs. InpatientOutpatient vs. Inpatient– Geographical LocationGeographical Location– Corporate RelationshipCorporate Relationship– Billing ServiceBilling Service– Chart Information & LocationChart Information & Location

DPH 2004DPH 2004

Problem: Problem: Incident to versus Incident to versus Independent ServiceIndependent Service• When Does Incident to Become When Does Incident to Become

Independent ServiceIndependent Service– Appearance of No SupervisionAppearance of No Supervision– Clinical Decisions are Made by StaffClinical Decisions are Made by Staff– Ratio of Physician to Staff Time Ratio of Physician to Staff Time

Becomes DisproportionateBecomes Disproportionate– Distance DifficultiesDistance Difficulties– Supervision DifficultiesSupervision Difficulties

DPH 2004DPH 2004

Problems:Problems:Recent Difficulties with Recent Difficulties with Incident toIncident to• Who Bills Incident toWho Bills Incident to

– Treating Physician Bills not the Supervising Treating Physician Bills not the Supervising PhysicianPhysician

– Then, Who is the Responsible PartyThen, Who is the Responsible Party

• The Physician Must Treat the Patient FirstThe Physician Must Treat the Patient First

• Physician Bonuses Must Tied to a Groups’ Physician Bonuses Must Tied to a Groups’ Overall Pool of Income (e.g., not referral Overall Pool of Income (e.g., not referral or possibly individual productivity)or possibly individual productivity)

DPH 2004DPH 2004

Problem:SupervisionProblem:Supervision

• SupervisionSupervision– 1.General = overall direction1.General = overall direction– 2.Direct = present in office suite2.Direct = present in office suite– 3.Personal = in actual room3.Personal = in actual room– 4.Psychological = when supervised by a 4.Psychological = when supervised by a

psychologistpsychologist

DPH 2004DPH 2004

Problem: Face-to-FaceProblem: Face-to-Face

• ImplicationsImplications

• Technical versus Professional Technical versus Professional ServicesServices

• Surgery is the Foundation for CPT Surgery is the Foundation for CPT (and most work is face-to-face)(and most work is face-to-face)

• Hard to Document & Trace Non-Face-Hard to Document & Trace Non-Face-to-Face Workto-Face Work

DPH 2004DPH 2004

Problem: TimeProblem: Time

• Time Based Professional ActivityTime Based Professional Activity

• Current =15, 30, 60, & 90 Current =15, 30, 60, & 90

• Expected = 15 & 30Expected = 15 & 30

DPH 2004DPH 2004

Problem: RVUsProblem: RVUs

• Bad NewsBad News– 2000 = 5.5% increase2000 = 5.5% increase– 2001 = 4.5% increase2001 = 4.5% increase– 2002 = 5.4% decrease2002 = 5.4% decrease– 2003 = 4.4 to 5.7% decrease ($34.14) 2003 = 4.4 to 5.7% decrease ($34.14)

• Really Bad NewsReally Bad News– Bush Administration not supportive of changing Bush Administration not supportive of changing

the conversion formulathe conversion formula– Change Continued to Probably 2005 Depending Change Continued to Probably 2005 Depending

on Such Factors as the Stock Market (e.g., 5000)on Such Factors as the Stock Market (e.g., 5000)

DPH 2004DPH 2004

Problem: Work ValueProblem: Work Value

• Physician Activities (e.g., Physician Activities (e.g., Psychotherapy) Result in Work ValuesPsychotherapy) Result in Work Values

• Psychological Based Activities (i.e., Psychological Based Activities (i.e., Testing) Have Testing) Have nono Work Values Work Values

• RVUs are Heavily Based on Practice RVUs are Heavily Based on Practice Expenses (which are being reduced)Expenses (which are being reduced)

• Net Result = Maybe Up to a Half LowerNet Result = Maybe Up to a Half Lower

DPH 2004DPH 2004

Problem:Problem:An Artificial Practice An Artificial Practice ExpenseExpense• Five Year ReviewsFive Year Reviews• Prior MethodologyPrior Methodology• Current MethodologyCurrent Methodology• Current Value = approximately 1.5 of 1.75 Current Value = approximately 1.5 of 1.75

is practiceis practice• Deadline for New Practice Expense = 2002Deadline for New Practice Expense = 2002

– Currently in Check Due to the Ongoing Survey Currently in Check Due to the Ongoing Survey

• Expected Value = closer to 50% of total Expected Value = closer to 50% of total value value at bestat best

DPH 2004DPH 2004

Problem:Problem: Work Value of Testing Work Value of Testing• First RoundFirst Round• Second RoundSecond Round• Third RoundThird Round• Current RoundCurrent Round

DPH 2004DPH 2004

Problem: Qualification of Problem: Qualification of TechnicianTechnician

• What is the Minimum Level of What is the Minimum Level of Training Required for a Technician?Training Required for a Technician?– Bachelor’s vs. MastersBachelor’s vs. Masters– Intern vs. PostdoctoralIntern vs. Postdoctoral

DPH 2004DPH 2004

Problem: PaymentProblem: Payment

• Origins of the ProblemOrigins of the Problem– Balanced Budget Act of 1997Balanced Budget Act of 1997– Employer’s Cost for Health Care in 2002 Employer’s Cost for Health Care in 2002

= $5,000 per employee= $5,000 per employee

• What Should Your Code Be Payed at?What Should Your Code Be Payed at?– www.webstore.ama-assn.org-www.webstore.ama-assn.org-

• State LegislationState Legislation– www.insure.com/health/lawtool.cfmwww.insure.com/health/lawtool.cfm

DPH 2004DPH 2004

Problem:Problem:Payment ProblemsPayment Problems• Payment Reduction Software ProgramsPayment Reduction Software Programs

– Claimcheck (McKesson product; Cigna, PacifiCare)Claimcheck (McKesson product; Cigna, PacifiCare)– Patterns (McKesson product; United)Patterns (McKesson product; United)

• RefillingRefilling– 51% require refilling of original forms51% require refilling of original forms– But, up to 60% do not follow upBut, up to 60% do not follow up

• ErrorsErrors– 54% = plan administrator54% = plan administrator– 17% = provider17% = provider– 29% = member29% = member

DPH 2004DPH 2004

Problem: PaymentProblem: Payment

• Use of HMOs & Third PartyUse of HMOs & Third Party– Shift in Practice Patterns by Psychiatry (14% Shift in Practice Patterns by Psychiatry (14%

increase)increase)– Exclusion of MSW, etc.Exclusion of MSW, etc.– Worst Hit Are Psychologists (2% decrease)Worst Hit Are Psychologists (2% decrease)

• CompensationCompensation– Gross ChargesGross Charges– Adjusted ChargesAdjusted Charges– RVUsRVUs– ReceivablesReceivables

DPH 2004DPH 2004

Problem: PPSProblem: PPS

• Application of PPS (inpatient rehab)Application of PPS (inpatient rehab)

• Traditional ReimbursementTraditional Reimbursement

• Current UnbundlingCurrent Unbundling

• Potential SituationPotential Situation

DPH 2004DPH 2004

Problem:Problem:Skilled Nursing FacilitySkilled Nursing Facility

• Consolidated BillingConsolidated Billing

• Excluded Codes in Consolidated Excluded Codes in Consolidated BillingBilling– 96115 (Neurobehavioral Status Exam)96115 (Neurobehavioral Status Exam)– 90901 & 90911 (Biofeedback)90901 & 90911 (Biofeedback)

DPH 2004DPH 2004

Problem:Problem:Provider-Based FacilitiesProvider-Based Facilities• Is Facility Located on Main Hospital Is Facility Located on Main Hospital

Campus or Within 35 Miles of itCampus or Within 35 Miles of it

• Appropriate Reporting Relationship Exists Appropriate Reporting Relationship Exists Between Hospital and Clinical StaffBetween Hospital and Clinical Staff

• Medicare Cost Report Includes FacilityMedicare Cost Report Includes Facility

• Records are Fully IntegratedRecords are Fully Integrated

• Facility is Presented to the Public as Part Facility is Presented to the Public as Part of the Hospitalof the Hospital

DPH 2004DPH 2004

Problem: Expenditures & Problem: Expenditures & FraudFraud• ProjectionsProjections

– CurrentCurrent• 14%14%

– By 2011;By 2011;• 17% ($2.8 trillion)17% ($2.8 trillion)

• ExamplesExamples– Nadolni Billing Service (Memphis)Nadolni Billing Service (Memphis)

• $5 million in claims to CIGNA for psychological $5 million in claims to CIGNA for psychological servicesservices

• $250,000 fine (& tax evasion); July 12th$250,000 fine (& tax evasion); July 12th

DPH 2004DPH 2004

Defining FraudDefining Fraud

• FraudFraud– IntentionalIntentional– PatternPattern

• ErrorError– ClericalClerical– DatesDates

DPH 2004DPH 2004

Problem: Fraud & Abuse Problem: Fraud & Abuse • 26 Different Kinds of Fraud Types26 Different Kinds of Fraud Types

• Mental Health ProfiledMental Health Profiled

• Estimates of Less Than 10% Estimates of Less Than 10% RecoveredRecovered

• Psychotherapy Estimates/Day = 9.67 Psychotherapy Estimates/Day = 9.67 hourshours– Review Likely if Over 12 Hours Per DayReview Likely if Over 12 Hours Per Day

• Problems with Methodology;Problems with Methodology;– MS level and RNMS level and RN– Limited SamplingLimited Sampling

DPH 2004DPH 2004

Problem: FraudProblem: FraudOffice of Inspector GeneralOffice of Inspector General• Primary ProblemsPrimary Problems

– Medical Necessity (approximately $5 billion)Medical Necessity (approximately $5 billion)– DocumentationDocumentation

• Psychotherapy Psychotherapy (oig.hhs/gov/reports/region5/50100068)(oig.hhs/gov/reports/region5/50100068)– IndividualIndividual– GroupGroup– # of Hours# of Hours– Who Does the TherapyWho Does the Therapy

• Psychological TestingPsychological Testing– # of Hours# of Hours– DocumentationDocumentation

DPH 2004DPH 2004

Problem: Problem: Fraud & “The Orange Fraud & “The Orange Book”Book”• Contractor OperationsContractor Operations

– Strengthen Regional Offices OversightStrengthen Regional Offices Oversight– Improve Evaluation of Fraud UnitImprove Evaluation of Fraud Unit– Prevent Duplicate Payments for Same ServicePrevent Duplicate Payments for Same Service

• Hospital OperationsHospital Operations– Identify Patterns of Aberrant OverpaymentIdentify Patterns of Aberrant Overpayment– Improve External Review of Psychiatric HospitalsImprove External Review of Psychiatric Hospitals

• Managed CareManaged Care– Retool Medicaid Programs for Managed CareRetool Medicaid Programs for Managed Care

• Nursing HomesNursing Homes– Improve Assessments of Mental IllnessImprove Assessments of Mental Illness– Identify Patients with Mental IllnessIdentify Patients with Mental Illness

DPH 2004DPH 2004

Problem:Problem:The “Orange Book” The “Orange Book” (continued)(continued)

• Physicians/Allied Health ProfessionalsPhysicians/Allied Health Professionals– Improve Oversight of Rural Health Improve Oversight of Rural Health

ClinicsClinics– Eliminate Inappropriate Payments for Eliminate Inappropriate Payments for

Mental Health ServicesMental Health Services– Yet, Improve Medicaid Mental Health Yet, Improve Medicaid Mental Health

ProgramsPrograms

DPH 2004DPH 2004

Problem: Fraud (cont.)Problem: Fraud (cont.)

• Nursing HomesNursing Homes– Identification Identification – Overuse of ServicesOveruse of Services

• ChildrenChildren• ExperienceExperience

– California; TexasCalifornia; Texas– Corporation AuditCorporation Audit– Company AuditCompany Audit– Personal AuditPersonal Audit

DPH 2004DPH 2004

Problem: Fraud (cont.)Problem: Fraud (cont.)

• Estimated Pattern of Fraud AnalysisEstimated Pattern of Fraud Analysis– For-profit Medical CentersFor-profit Medical Centers– For-profit Medical ClinicsFor-profit Medical Clinics– Non-profit Medical CentersNon-profit Medical Centers– Non-profit Medical ClinicsNon-profit Medical Clinics– Nursing HomesNursing Homes– Group PracticesGroup Practices– Individual PracticesIndividual Practices

DPH 2004DPH 2004

Problem: Mental vs. PhysicalProblem: Mental vs. Physical

• Historical vs. Traditional vs. Recent Historical vs. Traditional vs. Recent Diagnostic TrendsDiagnostic Trends

• Recent Insurance Interpretations of Dxs Recent Insurance Interpretations of Dxs

• Limitations of the DSM Limitations of the DSM

• The Endless Loop of Mental vs. PhysicalThe Endless Loop of Mental vs. Physical

• NOTE: NOTE: Important to realize that LMRP is Important to realize that LMRP is almost always more restrictive than national almost always more restrictive than national guidelinesguidelines

DPH 2004DPH 2004

Problem: HIPAAProblem: HIPAA

• Health Insurance Portability and Health Insurance Portability and Accountability ActAccountability Act

• Ethics versus PracticalityEthics versus Practicality

DPH 2004DPH 2004

Possible Solutions:Possible Solutions:General ApproachesGeneral Approaches

• Better Understanding & Application of CPTBetter Understanding & Application of CPT• More Involvement in Billing (especially in large, More Involvement in Billing (especially in large,

medical, multidisciplinary, and academic medical, multidisciplinary, and academic settings)settings)

• Comprehensive Understanding of LMRPComprehensive Understanding of LMRP• More Representation/Involvement with AMA, More Representation/Involvement with AMA,

CMS,CMS,& Local Medical Review Panels& Local Medical Review Panels

• Meetings with CMSMeetings with CMS• Survey for Testing CodesSurvey for Testing Codes• APA: Increased Staff & Relationship with CAPPAPA: Increased Staff & Relationship with CAPP

DPH 2004DPH 2004

Possible Solutions: Possible Solutions: ResourcesResources

• General Web SitesGeneral Web Sites– www.nanonline.org/paiowww.nanonline.org/paio– www.cms.orgwww.cms.org (medicare/medicaid) (medicare/medicaid)– www.hhs.orgwww.hhs.org (health & human services) (health & human services)– www.oig.hhs.govwww.oig.hhs.gov (inspector general) (inspector general)– www.ahrq.gov (agency for healthcare www.ahrq.gov (agency for healthcare

research)research)– www.medpac.govwww.medpac.gov (medical payment (medical payment

advisory comm.)advisory comm.)– www.whitehouse.gov/fsbr/healthwww.whitehouse.gov/fsbr/health (statistics) (statistics)– www.div40.orgwww.div40.org (clinical neuropsychology div (clinical neuropsychology div

of apa)of apa)– www.healthcare.group.comwww.healthcare.group.com (staff salaries) (staff salaries)

DPH 2004DPH 2004

Resources Resources (continued)(continued)

• LMRP Reconsideration ProcessLMRP Reconsideration Process– www.cms.gov/manuals/pm_trans/R28PIM.pdfwww.cms.gov/manuals/pm_trans/R28PIM.pdf

• Coding Web SitesCoding Web Sites– www.aapcnatl.orgwww.aapcnatl.org (academy of coders) (academy of coders)– www.ntis.gov/product/correct-codingwww.ntis.gov/product/correct-coding (coding edits) (coding edits)

• Compliance Web SitesCompliance Web Sites– www.apa.orgwww.apa.org (psychologists & hipaa) (psychologists & hipaa)– www.cms.hhs.gov/hipaawww.cms.hhs.gov/hipaa. (hipaa). (hipaa)– www.hcca-info.orgwww.hcca-info.org (health care compliance assoc.) (health care compliance assoc.)

DPH 2004DPH 2004

Future PerspectivesFuture Perspectives• IncomeIncome

– Steadier (if economy does not further Steadier (if economy does not further erode)erode)

– Probable incremental declines, up to Probable incremental declines, up to 10-20%10-20%

– If Medicaid dependent (25% or more), If Medicaid dependent (25% or more), then declines could be even higherthen declines could be even higher

– Possible “final” stabilization by 2005Possible “final” stabilization by 2005

• RecognitionRecognition– Masters Level Psychotherapy?…Masters Level Psychotherapy?…

DPH 2004DPH 2004

Future PerspectivesFuture Perspectives(continued)(continued)

• ParadigmsParadigms– Industrial vs. Boutique/NicheIndustrial vs. Boutique/Niche– Clinical vs. ForensicClinical vs. Forensic– Mental Health vs. HealthMental Health vs. Health– Existing vs. Developing Existing vs. Developing

DPH 2004DPH 2004

Future PerspectivesFuture Perspectives

• Evolving Paradigm = Continued and Evolving Paradigm = Continued and Significant Change Significant Change

ARE YOU READY?…ARE YOU READY?…