Reimbursement 101 2011 - Cardinal Health

Nuclear Medicine 

Reimbursement 101 – Part 1 

Jim Bietendorf, BS, CNMT 

Reimbursement Program Manager 

Nuclear Pharmacy Services 

December 7, 2011 

© Copyright 2011, Cardinal Health, Inc. or one of its subsidiaries. All rights reserved.

Nuclear Medicine Reimbursement 101 

2 

The Three Major Components of Reimbursement 

• Coverage 

• Coding 

• Payment 

Coverage + Correct Coding = Payment/Reimbursement $$ 



3 

But First…Before we explore details of coverage, coding, 

and actual payments: 

We need some foundational information 

• Reimbursement Terminology 

• Overview of Medicare Administrative Contractor (MACs) 

System 

• Payment y Systems y 


Reimbursement Terminology 

4 

• HCPCS Codes (billing ( g codes) ) - Healthcare 

Common Procedure Coding System 

• Standardized method for healthcare 

providers and medical suppliers to bill 

insurance programs for medical services, 

procedures and supplies furnished to 

patients patients. 



5 

• HCPCS is divided into 2 principal subsystems: 

– LLevel l I – CPT (Current (C PProcedural d l TTerminology) i l ) – UUsed d primarily i il 

to identify medical services and procedures furnished to patients 

by healthcare providers. These are five digit numerical codes 

assigned and maintained by the American Medical Association 

Example: 78306 – W/B Bone scan 

– Level II – HCPCS/National codes – Identifies products, supplies 

and services not included in the CPT Codes. These are five digit 

alphanumeric codes assigned and maintained by CMS 

(radiopharmaceuticals and drugs) 

Examples: A9500-Tc99m sestamibi, per dose; J1245 – 

dipyridamole, per 10mg 



6 

• ICD-9-CM (diagnosis codes). - Internal Classification of 

Diseases, Ninth Revision, Clinical Modification – Codes used 

to identify diseases, symptoms, conditions, problems, 

complaints or other reasons for a medical service 

– Transitioning to ICD-10-CM – Implementation date set for Oct Oct.1, 1 2013 



7 

• HOPPS – Hospital p Outpatient p Prospective p 

Payment System 

– Payment methodology used by Medicare to reimburse 

hospitals for outpatient procedures and supplies supplies. 

• APC – Ambulatory Payment Classification 

– Under HOPPS CPT/HCPCS codes are mapped pp to an APC 

for payment. The APC has a payment rate assigned to it 

and any CPT/HCPCS code mapped to a given APC will 

have that particular payment rate. 



8 

• MPFS – Medicare Physician Fee Schedule 

– Medicare payment p y methodology gy for services pperformed 

in the clinic 

setting (non-hospital based providers) and payments to physicians for 

their professional services. 

• RBRVS –Resource Based Relative Value Scale 

– Payment methodology used by Medicare under the MPFS 

• RVUs – Relative Value Units 

– A numerical value assigned to procedures that reflects the resources 

required to provide the service under the RBRVS system. 


NM Reimbursement 101 > A/B MACs 

9 

• Medicare Part A contractors – administer reimbursements 

to hospitals 

– Fiscal Intermediaries 

• Medicare Part B contractors – administer reimbursements 

to physicians p y and non-hospital p facilities ( (clinic setting) g) 

– Carriers 

CMS iis ttransitioning iti i tto: 

• A/B MACs – A/B Medicare Administrative Contractors 



10 

• Old system 

– Each state has a Medicare Part A (fiscal intermediary) 

contractor PLUS 

– A Medicare Part B contractor (carrier) 

– Commonly two different companies (contactors) for a given 

state 

• New system 

– Goal: One company (contractor) administers both Medicare 

PPart t A and d B ffor a given i jjurisdiction i di ti 

– Round One Procurements: Divided USA up into 15 jurisdictions 

– Awarded contracts for most jurisdictions 

– Legacy contractors (i.e. (i e original) fiscal intermediaries and 

carriers continue to service providers until a MAC contract is 

implemented 


A/B Medicare Administrative Contractors 

1 

Palmetto 

GBA 

2 

“Legacy” 

2 

“Legacy” 

3 

Noridian 

4 

Trailblazer 

© Copyright 2011, Cardinal Health, Inc. or one of its subsidiaries. All rights reserved. 

5 

Wisconsin 

Physician 

Services 

6 

“Legacy” 

7 

“Legacy” 

8 

“Legacy” Legacy 

15 

Cigna 

10 

CahabaGBA 

13 

National 

Government 

Services 

12 

HighMark 

11 

Palmetto 

GBA 

9 

First Coast 

Service 

Options 

14 

NNational ti l 

Heritage 

Insurance Co.

Medicare Contractors – “Legacy” States 

12 

State 

Medicare Part A Fiscal Intermediary 

(Hospitals) 

AK Noridian Noridian 

AR Pinnacle Pinnacle 

Medicare Part B Carrier 

(clinic/physician office) 

ID Noridian Cigna Government Services 

IL National Government Services (NGS) Wisconsin Physician Services (WPS) 

IN National Government Services (NGS) National Government Services (NGS) 

LA Pinnacle Pinnacle 

MI NNational ti l GGovernment t SServices i (NGS) Wi Wisconsin i Ph Physician i i SServices i (WPS) 

MN Noridian Wisconsin Physician Services (WPS) 

MS Pinnacle Cahaba 

OR Noridian Noridian 

WA Noridian Noridian 

WI National Government Services (NGS) Wisconsin Physician Services (WPS) 



13 

• New system y 

– Round two 

– Consolidate jurisdictions from 15 to 10 

– CMS has started the process 

– Expected to take several years to complete the process 


A/B Medicare Administrative Contractors 

14 


NM Reimbursement 101 

15 


Payment Systems

Reimbursement - Hospital Inpatient 

16 

Medicare Part A: 

• IPPS- inpatient prospective payment system 

• Reimbursement is made based on diagnostic 

related groups (DRGs) 

• Payments are made based on the patient’s 

diagnosis 

• No additional payments made for imaging – 

considered inclusive in the DRG payment 


Reimbursement - Hospital Outpatient 

17 

Medicare Part B (budget); Claims Processed by Part A 

Contractors 

• Reimbursed by payment levels set under HOPPS; payment rates 

updated annually 

• CPT procedure codes are mapped to an Ambulatory Payment 

Classification (APC) and the APC has a payment amount assigned to 

it (final payments adjusted slightly based on geographic index) 

• HOPPS covers the payment for hospital outpatient services, 

physicians bill separately and are paid under the Medicare Physician 

Fee Schedule 

• Reimbursement for diagnostic radiopharmaceuticals (RPs) bundled 

into scan payment 

• Therapeutic RP paid separately 


Reimbursement - Clinic Setting and Physicians 

Medicare Part B: 

• Payments are made under the Medicare Physician Fee 

SSchedule h d l (MPFS); (MPFS) payment t rates t updated d t d annually ll 

• Each CPT procedure code is assigned a payment level 

and can be billed in the following g ways: y 

• Technical component only (covers equipment, supplies, office 

expense, non-physician staff) 

• Professional component only (covers physician interpretation of 

scan) 

• Global – Technical plus professional component combined 

• Part B contractors have multiple p fee schedules within their 

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geographic jurisdiction (payment amounts vary based on 

geographic index) 


Reimbursement – RP in Clinic Setting 

19 

Medicare Part B: 

• Radiopharmaceuticals p ppaid separately p y 

– Based on invoice, i.e., no ceiling per se 

or 

– Up to a maximum allowable the contractor has set; typically 95% 

AWP 

– Providers should bill what they paid for the dose and Medicare will 

reimburse up to the maximum allowable 

• Note: some (not ( all) ) contractors ppost 

a RP fee schedule on 

their website 


Reimbursement-Drugs used in Nuclear Medicine 

HOPPS: 

Under HOPPS if Medicare has determined that the average 

cost t of f a drug d exceeds d a th threshold h ld of f $70 th then separate t 

payment is made; otherwise it is bundled and no separate 

payment is made 

Payment rates are listed in the HOPPS payment tables 

– Examples of drugs separately paid: Lexiscan, adenosine 

MPFS: 

Drugs are paid separately based on average selling price (ASP) 

Medicare publishes an ASP Pricing file with the payment rates 

and updates the file quarterly; there is no minimum threshold 

20 


Reimbursement - Private Payers 

21 

• Payments depend on the payers contract with the 

provider. Common arrangements include: 

• Negotiated fee schedule – services paid at a set rate 

• Discounted charges – negotiated percent discount off 

provider charges 

• Capitation – specified amount of money paid into a health 

plan to cover the cost of a health plan member’s health care 

services for a specific amount of time. A contracted amount of 

money is paid based on membership rather than the number 

of services rendered. 

• RPs and drugs typically paid separately; however payment 

methodology varies among the private payers 



22 


Coverage 

• Coding 

• Payment 



Coverage 

• Most important issue in determining whether a service or 

product will be paid for is coverage. 

• Payers usually provide coverage, and therefore payment, 

for services or products that that, based on clinical data and 

patient documentation, are reasonable and necessary, safe 

and effective, and/or improve patient management and 

outcomes. 

23 


Coverage – Private Payers 

• Private payers coverage policies vary and there is no single 

governing policy maker. Each private payer evaluates 

services and products and makes its own coverage 

determination according to its own internal decision making 

process. 

24 

• In general nuclear medicine procedures require preauthorization. 

This does not guarantee payment but usually 

results in successful reimbursement. 


Coverage – Private Payers 

• Increasingly private payers are using Radiology Benefits 

Managers (3rd party companies) to determine if a given 

imaging procedure is medically necessary before granting 

pre-authorization, i.e., MedSolutions, CareCore 

• Coverage policies are not always made public 

25 

• The payer may have broader coverage than CMS or they 

may be more restrictive 

• Typically need provider ID number to access the payers 

coverage and d reimbursement i b t policies li i 


Coverage – Medicare 

• Coverage under the Medicare program is limited by the 

Social Security Act to services, procedures, and/or items 

that are in one of the more than 50 defined benefit 

categories and are considered reasonable and medically 

necessary for the diagnosis and treatment of a disease or 

condition. 

26 



A service or product will generally be considered reasonable 

and necessary y if the service or product p is: 

27 

– Safe and effective 

– Not experimental or investigational 

– Furnished in accordance with accepted p standards of medical ppractice 

for the 

diagnosis or treatment of the patient’s condition or to improve the function of 

a malformed body part 

– Furnished in a setting g appropriate pp p to the ppatient’s 

condition and needs 

– Ordered and/or furnished by qualified personnel 

– Meets, but does not exceed, the patient’s medical need 

– Is at least as beneficial as an existing available alternative 



28 

• No pre-authorizations (exception Medicare HMO plans) 

• Coverage policies are a matter of public record 

• Providers are expected to follow published policies 

• EEnforcement f t arm is i the th Offi Office of f Inspector I t 

General (OIG) 

• Providers may be audited for compliance with 

policies 

• Severe penalties including monetary and criminal 

may be imposed for violators 



29 

• In general, nuclear medicine procedures are covered as 

long as the ICD.9 diagnosis code supports the medical 

necessity of the scan 

Example: 

• lung scan to detect pulmonary emboli (covered) 

• lung scan to detect hemorrhoids (not covered) 


PET Coverage – Medicare 

• Some specific coverage policies are made at the national 

level by CMS; National Coverage Determinations (NCDs); 

and all the local Medicare contractors must adhere to the 

coverage set forth by CMS. 

• PET is covered at the national level with very detailed 

instructions published in the Medicare National Coverage 

Determinations Manual 

• Local contractors are allowed to establish additional details 

not specified in the NCD such as acceptable ICD.9 diagnosis 

codes and utilization guidelines 

30 


CMS Coverage with Evidence Development 

31 

Alternative method of coverage: 

– National Coverage Determinations with Data 

Collection as a Condition of Coverage: 

• Coverage g with Evidence Development p ( (CED) ) 

– Applicable to PET for certain indications; i.e. oncology 

– Requires as a condition of payment, the collection of data to 

assess the impact of PET on cancer patient management g by y 

referring physicians (data is used to help guide CMS in 

making future National Coverage Decisions) 

– National Oncologic PET Registry (NOPR) serves as the 

clinical registry to meet this requirement 


CMS > CED > NOPR 

32 

• National Oncologic PET Registry (NOPR) developed 

for: 

– FDG-PET (specific oncology indications - certain solid tumors 

and leukemia) 

– NaF-PET (Bone PET for suspected or known bone 

metastasis) 

• Participation by providers is voluntary 

• Sites must submit patient data via web based forms 

• Provides an avenue for sites to be reimbursed by 

CMS for PET scans that otherwise are not eligible for 

Medicare reimbursement 


PET Coverage > Medicare 

Medicare National Coverage Determinations Manual for PET: 

http://www.cms.gov/manuals/downloads/ncd103c1 p g _Part4.pdf p 

Medicare Claims Processing Manual for PET: 

http://www.cms.gov/manuals/downloads/clm104c13.pdf 

33 


Coverage > Medicare 

34 

Medicare Local Contractors 

• Local Coverage Determinations (LCDs) 

– MMay publish bli h LCDs LCD for f certain t i nuclear l medicine di i services i 

– Defines the circumstances under which a local Medicare payer 

will provide coverage for the service and typically specify the 

applicable CPT/HCPCS codes and acceptable ICD ICD.9 9 diagnosis 

codes 

– LCD’s for nuclear medicine (if existing) are posted on the local 

contractors website (all ( have an LCD section) ) 

• Periodic Newsletters / Bulletins 

– May publish articles with coding guidance for a particular 

nuclear medicine service 



35 


Coverage 

Coding 

• Payment 



Coding 

• Codes required on a claim are ICD.9 diagnosis codes and 

CPT/HCPCS codes plus in some circumstances certain 

modifiers 

• The codes tell the payer exactly what was wrong with the 

patient and what services and procedures were performed 

to address the patient’s problem. 

• The payers then use this information to determine both 

whether h th th the services i or procedures d are covered, d and d if so, 

what the payment amount will be 

36 


Coding 

37 

• ICD-9-CM - Internal Classification of Diseases, Ninth 

Revision, Clinical Modification – Codes used to identify 

diseases, symptoms, conditions, problems, complaints or 

other reasons for a medical service (diagnosis codes). 

– Transitioning to ICD-10-CM ICD 10 CM – Implementation date set for Oct.1, 2013 

ICD-9-CM Diagnosis Codes ICD-10-CM Diagnosis Codes 

Approximately 14 14,000 000 codes Approximately 69 69,000 000 codes 

3-5 digits 

Digit g 1 is alpha p ( (E or V) ) or numeric 

Digits 2-5 are numeric 


3-7 digits 

Digit g 1 is alpha p 

Digit 2 and 3 are numeric 

Digit 4-7 are alpha or numeric

Coding 

• ICD.9 codes start with a base 3 or 4 digit code and can be 

further specified with additional digits up to a total of 5 

digits. 

• The code with the highest level of specificity should be 

used used. 

• The code used should support the medical necessity of the 

procedure performed 

• Example: 

√4th 413 – Angina pectoris 

38 

• 413 413.0 0 - AAngina i ddecubitus bit 

• 413.1 - Prinzmetal angina 

• 413.9 - Other and unspecified angina pectoris 


Coding 

39 

CPT/HCPCS codes 

• The nuclear medicine CPT codes are contained within the 

range of codes 78000 – 79999 

– i.e., 78452 – stress/rest SPECT MPI study 

• HCPCS codes for radiopharmaceuticals 

– assigned within the “A” series codes 

– i.e., A9500 – Tc99m sestamibi, per dose 

• HCPCS codes for drugs such as cardiac stress agents 

– assigned within the “J” series codes; 

– ii.e., e J2785 – injection injection, Regadenoson Regadenoson, per 00.1mg 1mg (Lexiscan) 


Coding Example 

Stress/Rest myocardial perfusion imaging with Tc99m sestamibi and using 

pharmacologic stress agent Lexiscan on a patient with a diagnosis of chronic 

ischemic heart disease 

Appropriate codes to be present on the claim form: 

ICD.9 Diagnosis code: 414.9 – chronic ischemic heart disease PLUS 

CPT/HCPCS 

Code 

Description 

78452 Myocardial perfusion imaging imaging, tomographic (SPECT) (including attenuation correction correction, 

qualitative or quantitative wall motion, ejection fraction by first pass or gated technique, 

additional quantification, when performed); multiple studies, at rest and/or stress (exercise 

or pharmacologic) and/or redistribution and/or rest reinjection 

A9500 Technetium Tc99m sestamibi, sestamibi diagnostic, diagnostic per study dose dose, UNITS = 2 

J2785 Injection, regadenoson, per 0.1 milligram; UNITS = 4 

93015* Cardiovascular stress test using maximal or submaximal treadmill or bicycle exercise, 

continuous electrocardiographic monitoring, and/or pharmacological stress; with physician 

supervision, with interpretation and report 

*Clinic/physician office; hospitals use 93017 – stress test ECG, tracing only and the physicians bill separately 

for the supervision and interpretation 

40 


Coding Modifiers 

• Two character numeric or alphabetic codes appended to CPT/HCPCS 

code to clarify the services being billed 

•. . Provide a means to add additional information to the code 

• Modifiers are used in some circumstances with nuclear medicine 

procedures 

Examples 

Modifier Description 

52 Reduced services; study only partially completed 

26 When the physician bills separately for interpretation of the scan 

PI or PS PET or PET/CT performed on Medicare patients for oncologic imaging to 

indicate whether the scan was for initial treatment strategy (PI) which includes 

diagnosis/initial staging or for subsequent treatment strategy (PS) which 

includes monitoring treatment/restaging 

41 

Q0 (zero) PET or PET/CT performed on Medicare patients enrolled in an investigational 

clinical research study approved by CMS, i.e. NOPR 


Coding Example – with modifier 

FDG PET/CT tumor imaging; skull base to mid-thigh; for initial 

treatment strategy, i.e. initial staging of a Medicare patient with a 

diagnosis of colorectal cancer of the descending colon 

Appropriate codes to be present on the claim form: 

ICD.9 Diagnosis code: 153.2 – malignant neoplasm of the descending colon PLUS 

42 

CPT/HCP 

CS Code 

Description 

78815-PI 78815 PI PET with concurrently acquired CT for attenuation correction and 

anatomical localization imaging; skull base to mid thigh 

NOTE: the use of modifier PI in this case. Medicare requires that 

claims for all oncologic PET scans be identified as either PI or PS 

A9552 Fluorodeoxyglucose F-18 FDG, diagnostic, per study dose 


Coding - Hospital Revenue Codes 

• Additional codes used by hospitals for outpatient billing 

• Identifies the ancillary service (department) to which 

the revenue (payment) (p y ) is applied, pp i.e., anesthesia, 

laboratory, radiology, nuclear medicine, etc. 

• Numeric 4 digit code 


Coding - Hospital Revenue Codes 

• 034X Nuclear Medicine 

Subcategory Standard Abbreviations 

0 - General Classification NUCLEAR MEDICINE or (NUC MED) 

1 – Diagnostic Procedures NUC MED/DX 

2 – Therapeutic Procedures NUC MED/RX 

3 – Diagnostic 

Radiopharmaceuticals NUC MED/DX RADIOPHARM 

4 – Therapeutic 

Radiopharmaceuticals p 

NUC MED/RX RADIOPHARM 

9 – Other NUC MED/OTHER 

• 040X Other Imaging Services 

4 - Positron Emission Tomography PET Scan 


Coding > Claim Forms 

• Hospitals use claim form 1450 (UB-04); reimbursement for 

hospital services 

• Clinic/physician office imaging imaging, and physician professional 

services use claim form 1500; reimbursement for: 

45 

• Technical component only (covers equipment, supplies, office 

expense, non-physician staff) CPT code with modifier TC 

• Professional component only (covers physician interpretation of 

scan) CPT code with modifier 26 

• Global – Technical plus professional component combined; no 

modifier 


Coding > Claim Form 1450 (Hospital) 

46 

Revenue 

codes 

CPT/HCPCS 

codes and 

modifiers 



47 

ICD.9 code 



48 

Example: whole body bone scan on a 

patient with prostate cancer 

Revenue 

codes 

O341 Whole body bone nuc med/dx 78306 04182011 1 xxx.xx 

xx.xx 

0343 Tc MDP per dose A9503 04182011 1 

CPT/HCPCS 

codes and 

modifiers 



49 

ICD.9 code 

185 



50 

Example: PET/CT skull base to mid-thigh 

subsequent treatment strategy on a patient 

with breast cancer 

Revenue 

codes 

O404 PET/CT torso 78815 PS 04182011 1 xxx.xx 

0343 FDG per dose A9552 04182011 1 

xx.xx 

CPT/HCPCS 

codes and 

modifiers 



51 

ICD.9 code 

174.9 


Coding > Claim Form 1500 Clinic/Physician 

52 



53 

ICD.9 code 

CPT/HCPCS 

codes 


modifiers


54 

172.9 

ICD.9 code 

CPT/HCPCS 

codes 


78816 TC PS 

1 xxxx.xx 1 

A9552 1 xxx.xx 1 

modifiers 

Example: billing for the technical component 

for a PET/CT whole body subsequent 

treatment strategy on a patient with 

melanoma

NM Reimbursement 101 - References 

55 

www.PetFoundations.com 



56 



http://www.cardinahealth.com/cardiologytoolkit 

57 



58 

Society y of Nuclear Medicine 

Tables for hospitals: 

http://interactive.snm.org/index.cfm?PageID=1981 

TTables bl ffor clinics/physician li i / h i i office: ffi 

http://interactive.snm.org/index.cfm?PageID=1982 


Nuclear Medicine Reimbursement 101 – Part 1 

59 

Q & A 


Coverage 

Coding 

Payment (NEXT TIME) 


PET Coverage and Reimbursement (NEXT TIME) 

NEXT TIME – Part 2; January 18, 2012 @ 12noon EST 


60 

Thank you!

Reimbursement 101 2011 - Cardinal Health

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