The Patient Protection and Affordable Care Act (PPACA) colloquially known as, Obamacare, is a United States federal statute signed into law by President Barack Obama on March 23, 2010. While there is plenty of controversy surrounding certain aspects of the bill (Individual Mandate, Medicaid Expansion), the real aim of the bill was to expand insurance coverage, control costs and target prevention.

Overpayment Increases for Multiple Diagnostic Radiology

Arguments for or against the Bill aside, at FRG we have seen an increase in overpayment identification thanks in part to some cost control measures that were enacted by the passage of PPACA. Specifically, Section 3134, which added section 1848(c)(2)(K) of the Social Security Act. This section specifies that the Secretary shall identify potentially misvalued procedure codes that are frequently billed in conjunction with furnishing a single service.

One particular overpayment report that has seen an increase in both identification and collection due to these measures is the Multiple Diagnostic Radiology Reduction Report.

Prior to the enacting of PPACA, certain Diagnostic Radiology codes listed with a multiple procedure indicator (MPI) of ‘4′ under CMS’s National Provider Fee Schedule (NPFS) were subject to a 25% reduction of the Technical Component (TC) portion of the reimbursement. This reduction occurs when multiple codes from this list were billed together in the same session. The old rule also categorized the procedures into eleven diagnostic imaging families based on contiguous body area and modality. The reduction only applied when multiple procedures were performed within the same diagnostic imaging family.

Subsequent to the passage of the Bill, claims starting with Dates of Service of 1/1/2011 saw an increase in TC reduction of 25% to 50% on the CPT Code with the lesser valued TC. It also eliminated the eleven families previously utilized to administer the multiple imaging reduction. All imaging procedures with a MPI of ‘4’ on the CMS NPFS are now categorized into one diagnostic imaging family. The Bill then went further, expanding the reduction to the Professional Component (PC) portion of the reimbursement on claims starting with Dates of Service 1/1/12. The procedure with the lower valued PC component would see a reduction of an additional 25%. This rule applies to providers billing TC only services, PC only services, or global services. As one can imagine, this affected the reimbursement of these multiple procedures greatly.

Overpayments Add Up

Based on a recent audit of a National Medicare Health plan, FRG found that the new rules reduced reimbursement on the secondary codes by about 30-40%, with an average of $100 overpayment on approximately 4,000 claims in a 12 month pay period. $400,000 a year in savings is no small sum to any company. The complexity of the fee schedule structure as well as the rule itself (Reduction applying to the individual Professional and Technical components) is what FRG believes leads to so many errors in processing.

While PPACA is far from perfect, certain cost control measures introduced by the Bill are having a direct and positive impact on keeping Healthcare costs down