Article Date: 5/1/2007

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Get in Code Mode
Here are the 2007 coding changes you need to know.

JOHN RUMPAKIS, O.D., M.B.A. Lake Oswego, Ore.

What I wouldn’t give for a quiet, crisis-free transition from one year of coding and reimbursement to the next. But, alas, I guess I’m going to have to hope for next year. There have been a few significant changes in 2007.
I speak on coding issues to our colleagues around 200 times per year. I find that O.D.s thirst for knowledge in this area and are deeply committed to learning and doing things correctly. I also know that traversing the coding landscape is both confusing and frustrating; there are so many details to manage, with reimbursement often being the last concern. I only have a few pages here to explain them all, so let’s not waste another word.

Reimbursement changes
Despite the Congressional reversal of the proposed 5.1% cut in the Centers for Medicare and Medicaid (CMS) conversion factor, you still have to grapple with significant changes in reimbursement for 2007. The relative value units for many common ophthalmic procedures and office visits were subject to decreases in the 3% to 30% range based upon recommendations from the Relative Value Scale Update Committee’s (RUC) five–year review process.
A brief primer: Annual updates to the physician work relative values are based on recommendations from a committee involving the American Medical Association and national medical specialty societies. The AMA formed the AMA/Specialty Society Relative Value Scale Update Committee (RUC) to act as an expert panel in developing relative value recommendations to CMS. The RUC is playing a key role in the third Five-Year Review, which began in 2005 and concluded with the CMS implementation of new values on January 1, 2007. Because a separate
process is ongoing to develop and refine new resource-based practice expense relative values, the Five-Year Review processes have been limited to the physician work relative values for which we saw modest increases this year, only to be capped by congressional budget limitations.

Gim’me the formula
Prior to January 2007, CMS’ reimbursement paradigm for physician offices was based upon the algorithm of:
CPT Maximum Allowable Reimbursement = [(Work RVU x Work GPCI) + (RB Non-Facility PE RVU x PE GPCI) + (MP RVU x MP GPCI)] x Conversion Factor

In January of 2007, CMS implemented two new paradigms, which resulted in the net reduction of many services we perform. For 2007, we’ll use a bottom–up methodology for direct costs, use supplementary survey data for indirect costs and eliminate the non-physician work-pool in order to calculate the practice expense RVUs. This requires that increases in RVUs may not cause the amount of expenditures to increase by more than $20 million from what the expenditures would have been had the changes not been made. Therefore, a work budget neutrality adjustor of 0.8994 has been established that will reduce all work RVUs accordingly. They are based upon the new algorithms of:
CPT Maximum Allowable Reimbursement = [((Work RVU x Budget Neutrality Adjustor (0.8994)) x Work GPCI) + (Transitioned Non-Facility PE RVU x PE GPCI) + (MP RVU x MP GPCI)] x Conversion Factor

However, Section 5102(b) of the Deficit Reduction Act of 2005 also required Medicare to implement a payment cap on the technical component (TC) of certain diagnostic imaging procedures and the TC portions of the global diagnostic imaging services. This cap is based on the Outpatient Prospective Payment System (OPPS) payment as described in the following formula:
OPPS CPT Maximum Allowable Reimbursement = [((Work RVU x Budget Neutrality Adjustor (0.8994)) x Work GPCI) + (OPPS Non-Facility PE RVU x PE GPCI) + (OPPS MP RVU x MP GPCI)] x Conversion Factor

CMS will compare these values and pay the lower of the two to practitioners. To confuse matters even more, non-Medicare carriers are not implementing a budget neutrality factor or an OPPS schedule, thus maintaining the methodology in place prior to CMS’ 2007 changes.
What does this mean to the average practitioner? In general, you will see lower federal reimbursements as dictated by the reduction in relative value units, however vigilance is required to keep up on these changes. Since this environment is subject to a high level of dynamic change, a number of software tools such as Reimbursement Plus (www.ReimbursementPlus. com) and Eye- COR ( have emerged to aid you in keeping up with these complex changes.

Quality reporting initiative
Beginning July 1, 2007, CMS has initiated a voluntary physician’s quality reporting initiative (PQRI). PQRI establishes a financial incentive for eligible professionals to participate in a voluntary quality-reporting program. Eligible professionals who successfully report a designated set of quality measures on claims for dates of service from July 1 to December 31, 2007, may earn a bonus payment (subject to a cap) of 1.5% of total allowed charges for covered Medicare physician fee schedule services.
In general, the quality measures consist of a numerator and a denominator that permit the calculation of the percentage of a defined patient population that receive a particular process of care or achieve a particular outcome for physicians who report with at least 80%.
The denominator population is defined by ICD-9 and CPT Category I codes submitted as part of a claim for Medicare Physician Fee Schedule services by eligible professionals. If the specified denominator codes for a measure are not included in the patient’s submitted claim, then the patient does not fall into the denominator population, and the PQRI measure does not apply.
If the patient does fall into the denominator population, submit the applicable CPT Category II code (or temporary G code if CPT Category II codes are not yet available) that defines the numerator.
When a patient falls in the denominator population, but specifications define circumstances in which the patient may be excluded from the measure’s denominator population, use CPT Category II code modifiers 1-P, 2-P, or 3-P to describe medical, patient, or system reasons for such exclusion. When an exclusion does not apply, use the CPT Category II modifier 8-P to indicate that the process of care was not provided for a reason not otherwise specified.
To successfully report quality data for a measure under the PQRI program, it is necessary in all circumstances to report a numerator code (CPT Category II code or G code), with or without an applicable CPT Category II code modifier.
CMS has designated eight areas of eye care in which the O.D. or M.D. is asked to report a service provided upon the actual outcome of the case. Each area has been designated a new, Level II HCPCS code specific for reporting whether the service has been provided. These areas and their accompanying procedure codes are:
1. Primary Open Angle Glaucoma: Optic Nerve Evaluation CPT II 2027F.
2. Age-Related Macular Degeneration: Age-Related Eye Disease study (AREDS) Prescribed/ Recommended CPT II 4007F.
3. Age-Related Macular Degeneration: Dilated Macular Examination CPT II 2019F.
4. Cataracts: Assessment of Visual Functional Status CPT II 1055F.
5. Cataracts: Documentation of Pre-Surgical Axial Length, Corneal Power Measurement and Method of Intraocular Lens Power Calculation CPT II 3073F.
6. Cataracts: Pre-Surgical Dilated Fundus Evaluation CPT II 2020F.
7. Diabetic Retinopathy: Documentation of Presence or Absence of Macular Edema and Level of Severity of Retinopathy CPT II 2021F.
8. Diabetic Retinopathy: Communication with the Physician Managing Ongoing Diabetes Care CPT II 5010F and CPT II 2021F. Keep in mind that this is an extremely brief summary of the initiative and reporting criteria. Each one of these areas has very detailed descriptions and reporting criteria. You can find this information on the CMS website: or at the American Optometric Association

More to coding than reimbursement
I’ve found that many of our peers are only concerned with reimbursement issues when it comes to coding. Why does this concern me? Because we have to realize that reimbursement issues are only part of the picture in guiding coding decisions within a successful practice.
As one who regularly represents O.D.s in audit situations, I can tell you that we must follow the myriad rules, regulations and policies rigorously. Ignorance isn’t a good defense. Today’s turbulent health-care environment, the federal government’s proclivity to pursue health-care fraud and many private third-party carriers stepping-up their audit efforts, make correct coding imperative for all of us.
It’s critical that we understand characteristics of every CPT code. You should also know whether the code has a technical/ professional component, when to separate those out or — more importantly — when not to and the global period associated with each surgical code, etc.
A common misperception is that we can get paid for documenting a normal patient state, for example, documenting with a fundus photograph that no diabetic retinopathy exists in a diabetic. More insurers would not deem such a test medically necessary. Additionally, you can’t bill carriers for special testing that documents no change. Such a test again wouldn’t pass the standard of medical necessity.

National correct coding initiative (NCCI)
This is more commonly referred to as the CCI Edits and governs how you can use code combinations together on the same date of service. These standards exist to promote correct coding habits and uniform reimbursement policies nationwide. The code pair rules are broken down into two categories: Column One/Column Two edits and Mutually Exclusive Edits. Often you can easily bypass these edits with the use of an appropriate modifier appended to one of the codes in the specific code pair. But, be forewarned: Improper use of modifiers, specifically modifiers -25 and -59, has escalated in the last few years and has the full attention of the Office of the Inspector General. Again, wonderful software tools are available online such as CCI Plus ( to assist with understanding how these code pairs work together and whether you can use an appropriate modifier to bypass the CCI edits.
Today’s maze of coding rules, reimbursements, regulations and interpretations require you be savvy in speaking the language of appropriate coding and also understand that getting a claim paid doesn’t mean that it was coded correctly. Read everything you can get your hands on, use tools that can assist in navigating these treacherous waters and stay up-to-date with the reimbursements, rules and guidelines.

*Reimbursement Plus, LCD Plus, CCI Plus are all registered trademarks of Practice Resource Management, Inc. The author has a financial interest in these products. CPT is registered trademark of the American Medical American. EyeCOR is a product of Nteon (

Dr. Rumpakis is the founder, chairman and CEO of Practice Resource Management in Lake Oswego, Ore. He is the author of Reimbursement Plus, a Web-based software application.

Noteworthy Changes In 2007
• A new code for corneal topography.
If you haven’t heard
yet, corneal topography was formally
assigned CPT code 92025
effective on January 1, 2007. The
total non-facility, geographically
unadjusted RVU is 0.81. It’s a unilateral
procedure and, like most
special ophthalmic tests, carries a
professional component (modifier
-26) and a technical component
(modifier –TC).
• National Provider Identifier
(NPI). HIPAA will require all practitioners
to have an NPI by May 23
of this year. These numbers will
replace all other provider Identifier
numbers used by third-party payers.
Keep in mind that each individual
will have his own NPI, and
each billing entity (i.e., your practice,
clinic, etc.) will have its own
NPI as well. The process for obtaining
an NPI, if you haven’t already,
is very straightforward and
requires little time.You can obtain
yours at
• CMS-1500 Form. Revisions
and updates have been made to
the CMS 1500 form that has been
in use since 1990. The new form
became effective on January 1
and is mandated for use on all
claims to Medicare on April 2. This
deadline was recently extended to
June 1st, due to a printing error by
the U.S. Government Printing Office.
You can obtain the new form
as an Adobe document at
nloads/CMS1500805.pdf.You can
also obtain the new forms from
the AOA or other third party vendors.
The new format contains numerous
changes, most of which
are related to incorporating the
NPI number.

Optometric Management, Issue: May 2007