Payers Multiple Surgery Discount Policies

By: Seth Canterbury, CPC, ACS-EM (Wed, Mar/17/2010)

Payers’ Multiple Surgery Discounts—Fair or Highway Robbery?

Most payers have multiple procedure discount policies which reduce the fees for most additional surgical procedures performed at the same session of a primary/initial procedure to half of their original fee schedule amount. When Modifier 51 is added to these subsequent procedure codes, it is realized and accepted that this multiple procedure discount will be applied. Likewise, most payers’ bilateral procedure policies result in the additional compensation for an identical surgical service performed on the opposite side of the body to be half of what it would have been had it been performed alone.

Many coders and physicians have expressed the opinion that these policies are unfair. For example, a surgeon spends one hour to remove a patient’s mangled right leg and bills a code worth $1000. He then proceeds to remove the similarly-damaged left leg. The surgeon should receive double reimbursement and double “credit” for his work, right? No. This article explains why payers’ multiple procedure discount policies and bilateral procedure policies actually make sense and do not represent an unfair payment reduction.

Using the example mentioned above, the first thing that must be understood is that the first $1000 isn’t actually paying the surgeon just for the one hour of intraoperative time needed to remove the right leg. The surgical code that represents that initial service is compensating him for an entire “package” of services. Most global surgical packages are split out like this: 10% of the code’s worth/fee is for the preoperative work, 70% for the intraoperative work, and 20% for the postoperative work.

In this case the surgeon decided to amputate both legs. But should he be reimbursed for two complete global surgical packages? Did he perform two pre-op H and Ps for this single operative case, one for each leg? No; one pre-op covered the entire surgery. Was the duration of the one pre-op doubled because two legs were being going to be removed? No; he only had to listen to the lungs once to make sure they sounded normal.

So there is one pre-op component for all work to be accomplished during this single surgical case. There is one set of post-op visits to be billed after the surgery, though I admit the length of each post-op visit will be slightly longer since two legs are involved. This is why the full global package is paid only for the original/first-listed procedure. A payer will not repeat the payment of the 10% pre-op and 20% post-op portions of the original procedure’s surgical package for all subsequent procedures. This is why it’s both fair and logical to reduce the reimbursement for most surgical procedures after the first by about 30%-- they only want to pay for the ancillary portions of a global package once per surgical case. Only some portion of the intraoperative RVUs for subsequent procedures will and should be reimbursed/credited.

But why only “some portion”? If the intraoperative portions of the additional procedures are still worth about 70% of the full package code fee once the pre-op and post-op components have been stripped away, why does the multiple surgery discount cut down the reimbursement of subsequent procedures to only 50%? Because of the economies of scale. In other words, the amount of effort/expense involved in rendering additional procedures after the first is reduced compared to what amount of effort/expense would have been necessary had it been the only procedure performed during the case. In many situations, though not the example I gave involving two leg amputations, multiple procedures are performed through one incision, and one closure is done at the end. The value of making one incision and closure is built into the intraoperative portions of most surgical codes, so if multiple surgeries are performed through a common incision requiring a single closure, it would make sense not to be paid/credited with the full 70% intraoperative value of all procedures since they didn’t each involve distinct incisions and closures.

In physician reimbursement, there are many policies that are arguably unfair and illogical. However, it is hoped that the above information was useful in explaining why the multiple procedure discount and bilateral procedure payment polices aren’t in that category.

Seth Canterbury, CPC, ACS-EM

Healthcare Consultant

tscanter26@hotmail.com

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