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Coding Basics for Orthopaedic Surgeons

Filler, Blair, C

Section Editor(s): Bozic, Kevin J MD, MBA, Guest Editor

Clinical Orthopaedics and Related Research: April 2007 - Volume 457 - Issue - p 105-113
doi: 10.1097/BLO.0b013e31803372b8
SECTION I: SYMPOSIUM: Health Policy and Practice Management Issues in Orthopaedic Surgery

Knowledge and correct reporting of Current Procedure Terminology (CPT) coding is part of a physician's education and requires continuing education similar to other aspects of patient care. Upcoding and downcoding have potentially devastating effects on the practice of orthopaedic surgery. The history of CPT and rationale for development of the current coding and reimbursement methods are described. This report outlines the basic coding rules and points out some of the more frequent areas of neglected or incorrect coding. The use of CPT code modifiers, add-on codes, extended visits, and consultations are areas of particular concern. The orthopaedic surgeon must be extensively involved in the coding of office and hospital patient encounters. Some studies have indicated up to a 25 % reimbursement loss if the physician does not code his or her own patient care activities.

From the University of California at Los Angeles (UCLA), Los Angeles, CA.

The author certifies that he has no commercial associations (eg, consultancies, stock ownership, equity interest, patent/licensing arrangements, etc) that might pose a conflict of interest in connection with the submitted article.

Correspondence to: Blair C. Filler, MD, 2400 South Flower St., 3rd Floor, Los Angeles, CA 90007. Phone: 213-742-1545; Fax: 213-742-1583; E-mail:

The 1989 United States Congress Omnibus Budget Reconciliation Act (OBRA) mandated the development of coding system for medical and surgical encounters by the Health Care Financing Administration (HCFA) for Medicare and Medicaid. The coding system was based on the American Medical Association (AMA) “Current Procedural Terminology 4th Ed.”5 The coding system changed physician billing and payment rules for medical services provided to Medicare and Medicaid patients. Third party medical carriers soon followed the government's lead in adopting similar policies.

Understanding rules for submitting correct Current Procedure Terminology (CPT) and International Classification of Diseases, revision 9, Clinical Modification (ICD-9-CM) codes has been a confusing and evolving process. Physicians are legally required to provide accurate codes to Medicare and to third party medical insurance carriers for payment. Submission of inaccurate or fraudulent codes by a physician or physician medical group is subject to fines and civil penalties.

Due to the time and effort required to learn and keep abreast of the coding system, many physicians have delegated this effort to their office staff. An in-house study by the American Academy of Orthopaedic Surgeons (AAOS) Committee on Coding, Coverage and Reimbursement seems to indicate many nonphysician employees code for lower value rather than correct CPT codes. The most common reasons were fear of the penalties for upcoding or misinterpretation of the physician's office or operative notes. The most accurate and effective coding is accomplished when a knowledgeable physician codes all of his or her physician encounters.

Physicians are bombarded with courses and literature on coding. The quality of these presentations is extremely variable. Some give instruction on how to “game the system” and others incorrectly suggest codes to benefit a commercial device or procedure. There are many excellent courses that are accurate and instructive, but the common theme is the physician must be personally involved and have a good, basic understanding of the entire coding process and its evolution. This review describes the current CPT coding process, stressing areas where physicians have incorrectly submitted or omitted codes.

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The AMA/Harvard Resource-based Relative Value Scale was the second part of the 1989 OBRA mandate. This project was funded by HCFA (now Center for Medicare and Medicaid Services [CMS]) to develop a medical fee schedule using the AMA CPT codes. Representatives of selected medical and surgical specialties were invited to participate in a magnitude estimation process. Values were assigned to each CPT medical encounter and surgical procedure based on the amount of physician work, time, skill, and iatrogenic risk involved in each medical encounter and surgical procedure. Each medical and surgical specialty was assigned a reference procedure to determine increased or decreased work in relation to the reference procedure. Carpal tunnel release was assigned to orthopaedic surgery as the reference procedure. This proved to be a poor choice because selecting a low-value procedure (eg, carpal tunnel release) rather than a midvalue procedure caused all higher value services to be assigned a lesser value. Psychological studies have shown if the index procedure in Magnitude Estimation is not approximately the midpoint and is too low, the higher valued procedures will be compressed to a lower level.12 The assigned relative values are then multiplied by a dollar amount. The dollar multiplier is determined each year by Congress. A complicated formula is used to determine a dollar amount, which is referred to as the conversion factor.8

In 1998, Congress developed the Sustainable Growth Rate (SGR) formula8 to control spending for physician services for Medicare Part B (SGR = change in physician prices × change in Medicare fee for service enrollment × change in real gross domestic product [GDP] per capita × changes in law or regulations that would affect SGR). This formula permits spending for medical services to grow with inflation and the other items contained in the formula. The increase in permitted spending has been targeted to approximately 2% per year. If the SGR is above this target, physician reimbursement will be decreased the following year averaged over 10 years. The amount of reimbursement increase, if the SGR is below the target, is limited to 3%. If the SGR is above the target, the yearly decrease in payment cannot exceed 7%. Amounts above or below these limits will be prorated to subsequent years. Since its inception, the SGR formula has been approximately 3%, mandating a decrease in the dollar conversion payment. Congress recently has delayed the decrease specified by the SGR formula. CMS has admitted the formula is flawed, but states only Congress can modify the statute. To date this has not happened. The AMA and others have identified some of the flaws in the formula. The change in the physician prices portion of the SGR formula includes the price of “incident to” services.8 These “incident to” services include laboratory, imaging, and physician administered drug charges. Although these services are essentially controlled by physicians, the price for providing the services is not. The cost of laboratory, imaging services, and particularly pharmaceuticals has increased exponentially. These services represent 17% of SGR formula portion related to change in physician prices and are responsible for a large portion of the yearly SGR increase. The second reason for increased SGR costs where physicians have no control is the steady increase in the number of patients covered by Medicare. The SGR formula is currently under scrutiny by physicians because its use will cause a yearly decrease in payment.

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Current Procedural Terminology (CPT)

The American Medical Association's “Current Procedural Terminology (CPT) 4th Ed.”5 was selected as the coding system for physicians and payers to determine reimbursement of medical services. An AMA/CPT Editorial Panel maintains, revises, updates, and modifies CPT codes. The AMA/CPT Editorial Panel consists of 17 representatives. There are 13 representatives from selected medical and surgical specialties and one member each from the Centers for Medicare and Medicaid Services (CMS), third party medical insurance carriers, a nonphysician provider, and the American Health Information Management Association. The AMA board of trustees selects physician representatives of the medical and surgical societies and others for either 4- or 8-year terms. Not all medical and surgical societies are represented at any one time. The CPT Editorial Panel is supported by the CPT Advisory Committee, consisting of representatives of 92 physician medical and surgical societies and 17 nonphysician provider organizations. “The purpose of CPT is to provide a uniform language that accurately describes medical, surgical and diagnostic services, and thereby serves as an effective means for reliable nationwide communication among physicians, patients and third parties.”6 New or revised codes approved by the CPT Editorial Panel are submitted to the Relative Value Update Committee (RUC).

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CPT Process

Anyone can submit a new CPT code or change an existing code to the AMA.5 An application for a new code, revision, or deletion can be obtained from the AMA website or the CPT Editorial Research and Development Department.5

All CPT code requests submitted to the AMA are reviewed by the AMA Editorial Research and Development staff and are then referred to the medical or surgical specialty society involved, as well as to selected members of the CPT Advisory Committee for comment and approval. The AAOS Coding Coverage and Reimbursement Committee receives all musculoskeletal and related CPT code requests from the AMA. The AAOS committee is available to aid in submission of CPT code requests. The primary submission of an orthopaedic surgery CPT code change to the AAOS CPT committee is a more expeditious method for code request submission. The AAOS committee will guide the proposer of an orthopaedic code request in the correct wording, required documentation, and previous submissions or actions of the AMA Editorial Panel, thereby hastening the evaluation process.

There are three categories of CPT codes that can be requested. Category I codes are generally based on procedures consistent with contemporary medical practice and performed by many physicians in clinical practice in multiple locations. The basic criteria for a new category I code are: (1) approval by the United States Food and Drug Administration (FDA) of any devices or drugs; (2) a distinct procedure and/or service performed by many United States physicians and/or practitioners; (3) clinical efficacy of the service and/or procedure is well established and documented in United States peer-reviewed literature; (4) the suggested service and/or procedure is neither a fragmentation of an existing procedure or service nor currently reportable by one or more existing codes; and (5) the suggested service and/or procedure is not requested as a means to report extraordinary circumstances related to the performance of a procedure or service already having a specific CPT code. If accepted, the code change will be assigned RVU by the RUC and CMS.

Category II codes are supplemental tracking codes that can be used for performance measurement. These are optional codes intended to facilitate collection of data on quality of care by coding certain services and/or test results that support performance measures agreed upon as contributing to good patient care. Category II codes are used to determine the new pay for performance reimbursement scheme. There are no RVU values assigned to these codes. Category II codes are listed separately in CPT and are found after the Category I codes.

Category III codes are a temporary set of tracking codes for new and emerging technologies. These codes are to facilitate data collection and assessment of new services and procedures. Any one of the listed criteria can qualify the service and/or procedure for a Category III code: (1) protocol for a study of procedures being performed; (2) support from specialists who would use the procedure; (3) availability of United States peer-reviewed literature; (4) description of current United States trials outlining the procedure's efficacy. These codes are archived 5 years from the date of implementation unless promoted to a Category I code or there is demonstrated need for further study. There are no RVU values assigned to these codes. If a Category III code exists for a procedure neither a Category I nor an unlisted code can be substituted by a physician. Category III codes are listed separately in CPT after Category II codes.

G Codes were developed by CMS for RVU changes for special circumstances when a procedure was performed on a Medicare or Medicaid patient (eg, knee chondroplasty). The knee arthroscopy codes were accepted as Category I codes and were to be effective January 1, 2006. CMS has decided to use G codes for the Pay for Performance (P4P) program, Voluntary Reporting Program related to Medicare patients. It is anticipated after a trial period these codes will be converted to Category II codes. Category II codes have no RVU values.

After evaluation and comment from the specialty societies and CPT advisory committee members, the proposed new code or change is submitted to the AMA CPT Editorial Panel for final acceptance, modification, postponement, or rejection. Sponsoring societies or individuals may be requested to appear before the CPT Editorial Panel to defend their request. Decisions of the AMA Editorial Panel can be appealed by the requestor.

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5-Year Review

The 1989 OBRA legislation required the CMS to conduct 5-year reviews to comprehensively assess all relative values and make any needed adjustments. Changing work values, practice expense, and new medical innovations are reviewed every 5 years by the RUC. Requests for changes are received from medical and surgical societies and from Carrier Medical Directors. The results of the 2005 review will be published in the Department of Health and Human Services August 2006 Federal Register. Budget-neutral rules permit the change in RVU for 5-year review codes to affect the RVU of all CPT codes and not just related CPT codes.

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90-Day Global Service

Payment for major surgical procedures includes visits and procedures related to the procedure the day before or the day of surgery and 90 days postoperatively. Payment for minor surgical procedures includes visits and procedures related to the procedure the day of the procedure and 0 to 10 days postoperatively (eg, tendon sheath injection has a 0-day global service period).

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Relative Value Update Committee

The AMA/Specialty Society Relative Value Scale (RVS) Update Committee (RUC) was formed in 1991 to make recommendations to CMS on relative values in CPT.7 The core of the RVS is determined by the RUC. All 23 major national medical specialty societies recognized by the American Board of Medical Specialties are included in the RUC as well as nonphysician providers. The RUC Advisory Committee is a support committee of the RUC and a major source of specialty input. Membership in the RUC Advisory Committee is open to all 103 specialty societies in the AMA House of Delegates. The relative values of CPT codes are determined by RUC consensus panels. It is an involved process using physician surveys, practice expense evaluation, physician work, liability insurance costs, and relation to similar existing codes. The CPT code changes with their relative value units (RVU) recommendations are referred yearly to the CMS. The CMS usually approves most of the changes, but reduces the RVU for some codes. The new or modified codes with their RVU recommendations become effective yearly on January 1 and are included in the August Federal Register8 and (AMA) “Current Procedural Terminology 4th Ed.”5 If any new or altered codes result in a change in relative value, budget neutrality rules require the payment be applied to related procedures or encounters (eg, the RVU of a new code for hip surgery would result in a decrease in the RVU of an existing hip surgery code[s]).

The CMS-developed software, Correct Coding Initiative Edits11 bundles CPT codes in a 90-day global service package where pairs of CPT codes cannot be separately coded. Many private payers use this software.

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AAOS Coding, Coverage, and Reimbursement Committee

Established in 1991, the AAOS Coding, Coverage, and Reimbursement Committee currently includes 20 orthopaedic surgeons representing orthopaedic subspecialty organizations, the Board of Councilors, the American Orthopaedic Association, an AAOS RUC representative, and three members-at-large. The committee meets three times a year to review the actions of the AMA CPT Editorial Panel, the RUC and the Correct Coding Initiative. Requests for new or revised codes or deletion of codes are reviewed and recommendations are proposed. Each November the committee reviews and updates the Complete Global Service1 and Orthopaedic Codex.4 Specific coding questions from AAOS members are reviewed by the committee.

The committee updates the AMA award-winning AAOS Complete Global Service Data1 publication yearly. The AAOS Complete Global Service Data1 lists 1600 musculoskeletal, integumentary, and neurologic codes commonly used by orthopaedic surgeons. This publication provides a detailed summary of procedure codes included and excluded in any specific procedure during the 90-day global service period for each CPT procedure code.

The AAOS Orthopaedic CodeX4 (American Association of Orthopaedic Surgeons, Rosemont, IL) a CPT coding-based computer program developed by the AAOS CPT committee is reviewed and updated yearly. This sophisticated program applies CPT rules to coding questions, indicates proper CPT-ICD 9 code combinations, provide global service data information, RVU data, and orthopaedic jargon.

The CPT/ICD-9 Cross-Reference2 is a publication of the AAOS that matches CPT codes to appropriate ICD 9 CM codes.

The CPT committee members attend and participate in the monthly traveling Masters in Orthopaedic Coding courses presented by the Karen Zupko, Inc and the AAOS.3 Two CPT Instructional Course lectures sponsored by the committee are provided yearly at the AAOS annual meeting.

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Common Orthopaedic CPT Coding Problems

A comprehensive course on CPT coding requires a didactic lecture series of at least 1 day and an equal number of hours of practice to master rudimentary proficiency in CPT coding. The Zupko-AAOS courses in CPT coding is recommended. Consistent errors in CPT coding are identified by the AAOS CPT coding committee. The following is a brief review of these errors or omissions.

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Evaluation and Management

There are five levels for most evaluation and management encounters based on three key components: history, physical examination, and decision making; and four contributory components: counseling, coordination of care, nature of the presenting problem, and time. Points are awarded for each element of the key components with a higher RVU award for encounters of greater intensity. The contributory components can increase the value of the encounter in unusual instances.

New patients are defined as those patients not seen by a physician or orthopaedic group in the previous 3 years. Physicians are presently identified by Medicare by their tax identification number. A group of physicians covered by one tax identification number is considered the same as a single physician. If a patient is seen for any problem by a group physician with the same tax identification number, subsequent visits to other physicians in the group within the 3 years of the first visit will be considered an established patient visit.

The RVU are higher for new patients and require more work. All key components must be documented for new patients. Established patients' RVU requires only two of the three key components be documented.

The physician must document the findings of each encounter. Medicare rules state if an element of any component is not recorded, then it is assumed it was not performed.10 The review of systems, past, family, and social history can be recorded by the patient or office assistant and initialed by the physician after review. Recording of height, weight, and vital signs can be recorded by an office assistant, but all other activities related to evaluation and management must be performed and documented by the physician. Level 1 established patient encounters can be performed by an office assistant if the physician is present. The reason for the visit must be identified for each encounter.

The time of encounter is the least understood contributory component. All evaluation and management codes have a specific time. Time, listed in the descriptor of an evaluation and management code, is an average and may be higher or lower depending on clinical circumstances. It includes the total time of the encounter before, during, and after the visit. Time includes face-to-face time in the office or other outpatient visits and unit and/or floor time in the hospital or nursing facilities. It only includes time spent on the patient's floor and not other parts of the hospital or nursing facility. Prolonged face-to-face time for inpatient or outpatient services (codes 99354-99357) is specifically noted when there are prolonged services beyond the usual encounter. Prolonged non-face-to-face time (codes 99358-99359) can be coded when there is substantial work, such as major record review (longer than 30 minutes), after the patient encounter.

Counseling and coordination of care are considered contributory components of the patient encounter in addition to the key components (history, physical examination, decision making). If counseling/coordination of care involves more than 50% of the encounter time, time can be used as the basis for payment in both the inpatient and outpatient settings. An example of coding for extended counseling is a patient encounter for an elbow problem where the history, physical examination, and decision making satisfies the requirement for a new patient code 99203. However, prolonged counseling with the parents regarding discontinuing pitching by their son who has an osteochondritic lesion in his elbow requires an additional 31 minutes. The average listed time for code 99203 is 30 minutes. The total encounter time for this patient was 61 minutes. The CPT rules state if the counseling required more than 50% of the encounter time, a code valued for the total time in minutes should be submitted. CPT code 99205, valued at 60 minutes, is therefore submitted. The time and discussion topics must be documented. If more time than a Level 5 visit is needed, the prolonged service codes 99354-99357 should be used.

The original AMA/Harvard Resource-based Relative Value Scale project decided rules for coding and documenting E/M encounters would be the same for all providers. HCFA (now CMS) was directed to develop these guidelines and they were published in 1995.10 It became immediately apparent that the intensity of the E/M encounter varied with type of medical practice and specialty. Many medical and surgical specialty societies petitioned CMS to develop specialty specific E/M guidelines. These new documentation guidelines were therefore developed by CMS with input from most medical and surgical specialties and were published in 1997. A provider can presently use either the 1995 or the 1997 guidelines. The 1997 guide introduced the “point and bullet” method of coding evaluation and management visits that were specialty specific and are used by most physicians today. There is still interest in returning to the 1995 evaluation and management documentation rules that did not recognize the difference in medical specialty evaluation and management visits.

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Consultation evaluation and management codes may be submitted whenever a patient is seen at the request of another physician. The request can be either written or verbal. The consulting physician must record the appropriate history, physical examination, and decision making in the patient's medical record to document the level of the encounter. The consultant must provide his or her opinion and recommendations via written report to the requesting physician. The physician consultant may take over patient care at the same or subsequent visit. No consultation code should be submitted if a physician agrees to assume patient care before examining the patient because it is considered a referral. Instead, office or hospital visit codes should be submitted rather than a consultation code. Followup inpatient consultations and confirmatory consultations were deleted for CPT 2006. The revised 2006 rules permit the use of a consultation code for any patient sent from any type of health practitioner for advice and/or treatment. Consultations requested by the patient or patient's family are not allowed. Consultations between members of the same orthopaedic group can be documented and submitted if a specific level of physician skill is required. For example, a general orthopaedic surgeon in an orthopaedic group requests a consultation with another orthopaedic group member who is a spine surgery subspecialist concerning the management of a patient with failed back surgery.

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Telephone Calls and Online Medical Evaluation

Codes 99371-99373 are listed for telephone calls by a physician to a patient for consultation, medical management, or coordinating care with other health care professionals. These codes are not universally recognized by Medicare or other health insurance payers. Code 0074T, a temporary code for online medical evaluation, will be added to the 2006 AMA/CPT to determine if online medical evaluation primary codes are needed.

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ICD-9 Diagnosis Codes

Only the most specific ICD-9 diagnosis codes should be used for evaluation and management visits and procedures related to the chief complaint. The level of decision making is related to the number of other diagnoses for other abnormalities and diseases. These ICD-9 codes should be included. Discussing appropriate use of ICD-9 codes with specific CPT codes comprises a large part of the AAOS courses3 and Orthopaedic CodeX software program.4

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Separate Procedure Codes

Codes with descriptors that include separate procedures are defined as procedures or services commonly performed as an integral component of a total service or procedure. Separate procedure codes should not be reported in addition to the code for the total procedure or service. For example, diagnostic arthroscopy codes, described as a separate procedure, should not be reported when other operative arthroscopic procedures are performed in the same joint.

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Unlisted Procedures

Medicare has changed the rules for submission of an unlisted code.10 Previously, procedures or services not listed in AMA/CPT were to be submitted with the code of a similar listed procedure. It is now considered Medicare fraud to incorrectly code any service or procedure. If not specifically described, a procedure or service shall be identified with an unlisted code and a separate letter sent with the bill stating the procedure is similar to a listed procedure, but is not the same and the physician work to perform the service or procedure is felt to be the same, increased, or decreased.10 Many health insurance payers have included this rule in their coding requirements, but one must contact the payer in advance to determine their policy.

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Casts and Supplies

For any fracture or dislocation procedure (manipulative, nonmanipulative, operative, or nonoperative), payment includes application of the first splint or cast and cannot be coded. Cast supplies can be billed if the first cast or splint is applied in the office. All replacement cast or splint applications can be billed, and those applied in the office can be reimbursed for supplies. If a cast is applied without another procedure code and only an evaluation and management code, the application and cast supplies can be reimbursed (eg, application of the first cast for an ankle sprain). In this event a −25 modifier should be added to the evaluation and management code.

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Add-on Codes

Add-on codes are never used alone. Many add-on codes are identified by the term “each additional” in the descriptor and are preceded by a cross before the code in CPT. Modifier-51 is never used with an add-on code (eg, code 26125 is listed as each additional digit with a partial palmar fascsiectomy coded 26123). See code-51 discussion of modifier-51 exempt codes, which have similar rules (eg, bone graft codes).

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The CPT defines modifiers as “the means by which reporting physicians can indicate a service or procedure that has been performed has been altered by some specific circumstance but not changed in its definition or code.”5 The following are modifiers frequently omitted or misused by orthopaedic surgeons and can result in delayed or decreased reimbursement. Modifiers are two-digit numbers separated from the end of the five-digit CPT code by a hyphen. A complete list of modifiers is printed on the back of the front cover page of CPT.5 Multiple modifiers can be added to any code.

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Unusual Procedural Service (modifier-22)

If a procedure requires more work than the usual procedure, add modifier-22 and submit a written report to the payer. This report should state why the procedure was more work and should include an estimated percentage of increased work. The note that the procedure took more time is usually not accepted; however, documentation of an altered surgical field usually is acceptable (eg, revision surgery scar). With adequate documentation most payers will accept use of this modifier, but payment is delayed.

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Unrelated E/M Service by the Same Physician during a Postoperative Period (modifier-24)

Modifier-24 is used if a patient has a new problem requiring evaluation and management visits during the postoperative global service period (eg, lumbar strain after knee surgery).

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Substantial, Separately Identifiable E/M Service by the Same Physician on the Same Day of the Procedure or Other Service (modifier-25)

Modifier-25 is most commonly appended to the evaluation and management code when an office procedure is performed at the same time as an evaluation and management visit. The evaluation and management visit can be for a diagnosis unrelated to the procedure (eg, established patient with lumbar strain requiring an injection for an acute trigger finger). It also can be appended when the decision is made at the time of the evaluation and management visit to perform an office or clinic procedure (eg, new or previous patient with a new complaint of an acute subdeltoid bursitis requiring an injection to the bursa). No other ICD-9 code is required other than the code for subdeltoid bursitis. The documentation is obvious if an examination was necessary to make the diagnosis before injection of the shoulder. For example, the problem emerges when a patient is seen for a shoulder problem and is sent for physical therapy. When evaluated 2 weeks later, the patient is not improved. The decision is made to inject the shoulder. This must be documented clearly in the record. If the original record states the shoulder will be injected if there is no improvement, only the injection procedure should be coded and not the evaluation and management visit. The modifier should not be used when the patient was scheduled in advance and returned for an office procedure.

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Professional Component (modifier-26)

Modifier-26 is used for the reading and interpretation of imaging studies where the orthopaedic surgeon is the first or only physician involved. A signed written report is required for documentation. Payers do not permit reimbursement for more than one physician to submit charges for the same service. If a physician submits a charge for the technical use of the imaging equipment it is not appropriate to use this modifier. The imaging code should be used without a modifier since the CPT code includes the technical and professional components. Interpretation of images by the surgeon during a surgical procedure is usually not reimbursed.

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Anesthesia by Surgeon (modifier-47)

Intravenous regional anesthesia and injections such as brachial, axillary, sciatic, or peroneal block anesthesia codes should be submitted when performed by the surgeon. Local infiltration or digital blocks are considered part of the procedure and should not be submitted (eg, fracture hematoma block). The CMS does not recognize use of this modifier for any type of anesthesia.

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Bilateral Procedure (modifier-50)

Modifier-50 will be reimbursed at 150% of the single service payment when similar bilateral procedures are performed during the same surgery.

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Multiple Procedures (modifier-51)

When multiple procedures are performed during the same surgical encounter, the procedure with the highest RVU code should be listed first and all other procedures submitted with modifier-51 appended. The first listed procedure will be paid 100% and the next four procedures listed with modifier-51 will be paid 50% per procedure. Payers differ as to the payment for additional services if more than five procedures are performed. If a code is listed as a modifier-51 exempt code (identified with a circle-slash symbol in CPT and ZZZ in RUC data), then submit the full charge.

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Decision for Surgery (modifier-57)

The usual global service for surgical procedures includes the services the day before, the day of surgery, and 90 days postoperatively. If the decision to perform surgery is made the day of surgery, reimbursement for the evaluation and management services is submitted with this modifier for reimbursement.

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Staged or Related Procedure or Service by the Same Physician during the Postoperative Period (modifier-58)

When a procedure is staged during the 90-day global period (eg, débridement of an open fracture followed a few days later by open reduction), append modifier-58 to the second procedure and mention the need for staging in the operative notes of the first procedure.

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Distinct Surgical Service (modifier-59)

Modifier-59 should be used to indicate a procedure that is distinct or independent from other services performed on the same day. If a procedure is bundled, modifier-59 unbundles the procedure (eg, chondroplasty knee in separate compartment from an arthroscopic meniscectomy). Procedures performed on another joint or limb often require this modifier. It is to be used when no other modifier is appropriate.

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Two Surgeons (modifier-62)

When the skills of two surgeons are required the total reimbursement is 125% of the regular procedure, which is divided between the surgeons. The surgeons usually have different specialties; however, surgeons of the same specialty with different skills can be reimbursed (eg, an orthopaedic surgeon performs the approach and closure to a spinal procedure and a fellowship-trained orthopaedic surgeon performs the definitive spinal procedure). Both surgeons dictate their part of the procedure and bill separately.

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Return to the Operating Room for a Related Procedure during the Postoperative Period (modifier-78)

This code is often confused with the staged procedure modifier-58. Modifier-78 is used when return to the operating room is necessary because of a complication. The global service period is not extended. The payment is for the repeat surgical procedure only and does not further reimburse for followup care. Payment is approximately 50% of the primary procedure.

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Unrelated Procedure or Service by the Same Physician during the Postoperative Period (modifier-79)

Modifier-79 should be used, for example, in a patient who has fallen after a total hip arthroplasty, fractures both bones of the forearm, and requires an open reduction of the forearm fractures during the global service period for the hip surgery.

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Assistant Surgeon (modifier-80)

Modifier-80 is applied when a physician assists another surgeon and is present 75% to 80% of the procedure. If less time is spent assisting, use modifier-81 for a minimum assistant surgeon. In a teaching hospital with residents, use modifier-82 when assisting when there is no qualified resident available. An assisting physician using modifier-80 is usually paid 16% to 20% of the surgeon's fee. A physician's assistant is usually paid 13.6% of the surgeon's fee.10

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Fraud and Abuse

The Office of the Inspector General (OIG) for Medicare is authorized to assess a penalty of up to $10,000 for each submitted CPT code that is miscoded or upcoded. Insurance carriers other than Medicare are now permitted legally to extract similar penalties. Active enforcement of penalties by the OIG has reduced the multibillion dollar loss due to Medicare fraud and abuse to approximately $3 billion.10 It is important for physicians and others submitting CPT codes to learn correct coding and documentation to avoid time-consuming and potentially devastating consequences of the fraud and abuse laws.

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E/M Code Use

The CMS and third party payers have a file on each provider and can use a computer to graph how often an evaluation and management code is used. They would like to see a bell-shaped curve graph where the middle evaluation and management codes are most frequently used and the end codes the least used (eg, 99201 and 99205). A practice may be audited if the graph shows a spike in the higher level codes and the use of only one or two codes. Some providers, often universities, see only the most complicated cases and can justify the increased use of higher level E/M codes. Each physician should periodically make their own evaluation and management code graph to ensure compliance.

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Unbundling of Surgical Procedures

The Global Service Package has been defined by CMS for many services integral to accomplishing a procedure. “The bundled service represents the acceptable medical/surgical practice in accomplishing the overall procedure; is necessary to accomplish the comprehensive procedure and failure to perform the service may compromise the success of the procedure; the service does not represent a separately identifiable procedure unrelated to the comprehensive procedure planned.”10 The AAOS Complete Global Service Data for Orthopaedic Surgery1 and CMS Correct Coding Initiative11 list the procedures included (bundled) and excluded for each surgical procedure. The submission of bundled codes for payment is defined as unbundling and is considered as fraudulent (eg, coding for a diagnostic arthroscopy when another arthroscopic surgical procedure is performed in the same joint). These bundled procedures are part of any operation and are not billed separately.

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Submitting a CPT code for a procedure that has a higher reimbursement when a lesser procedure was performed (eg, a bipolar hip arthroplasty is coded as a total hip ar-throplasty) is a frequent reason for an Office of the Inspector General9 audit. It is important the orthopaedic surgeon inspects all billing forms. Many offices rely on a coding clerk to interpret operative reports. The surgeon is liable for procedures incorrectly coded to a higher level procedure.

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Understanding the CPT coding process is a necessary objective in any medical practice. Accurate submission of CPT and ICD-9 codes identifies disease processes, optimizes correct reimbursement without the fear of fraud and abuse penalties, and minimizes incorrect third party medical errors. A CPT-knowledgeable physician can contest incorrect reimbursement, respond appropriately to CPT and RUC surveys, and propose new or revised CPT codes.

There is no single source for learning CPT coding and courses and literature on coding are often inaccurate or plain dishonest. Basic courses provided by professional coders along with well-informed physicians such as the AAOS or orthopaedic subspecialty organizations have been very effective, but none are all inclusive. Knowledge of government rules related to coding requires outside education and review. The Residency Review Committee for Orthopaedic Surgery has considered requiring CPT coding education during an orthopaedic surgical residency and development of questions related to coding on the Orthopaedic Intraining examination. The American Board of Orthopaedic Surgery has similarly discussed evaluation of a physician's coding knowledge. Publications and computer tools have been developed by the AAOS and others to make coding more rapid and efficient, but a basic understanding of CPT and reimbursement is still necessary.

CPT coding is an evolving effort. The evaluation and management codes need revision due to the increased intensity, time, and physician work involved during patient encounters. The new P4P (pay for performance) Category II codes being developed will have an impact on patient education during an office visit and reimbursement. Surgical techniques are being revised with new tools and techniques requiring revision of the time, physician work, practice expense, and iatrogenic risk factors relating to the RVU payment. Updates in calculating new or revised RVU values require random surveys sent to orthopaedic surgeons. An inaccurate response by many can be devastating to future payment.

There are numerous controversies related to CPT coding and reimbursement. The SGR formula change has been delayed yearly, but the problem is increasing as physicians consider abandoning treatment of Medicare patients. There is intense competition among all branches of medicine for payment of their services because of the limited funding caused by the budget neutral payment rules. There is an ongoing debate on the number of codes needed and how specific the codes should be (granularity). With a good knowledge of CPT coding, orthopaedic surgeons can be involved in these controversies on a local, state, or national basis.

This summary of the CPT coding basics described the process of developing and valuing CPT codes. The evolution of the CPT coding system was presented to aid in understanding the convoluted path that led to current coding and reimbursement. The most common misconceptions and errors identified in orthopaedic surgery coding were discussed. The future trends of CPT coding are suggested, but not assured. The important message is the physician must understand and be personally involved in coding their patient encounters and surgeries.

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1. American Association of Orthopaedic Surgeons. Complete Global Service Data for Orthopaedic Surgery. Available at: Accessed June 2006.
2. American Association of Orthopaedic Surgeons. CPT/ICD-9 Cross-Reference for Orthopaedic Surgery. Available at: Accessed October 2005.
3. American Association of Orthopaedic Surgeons/KZA. The Masters in Orthopaedic Coding. Course brochure V040405. Available at: Accessed October 2005.
4. American Association of Orthopaedic Surgeons. Orthopaedic CodeX. Software version 4.3, 2005. Available at: Accessed October 2005.
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7. American Medical Association. Medicare RBRVS: The Physicians' Guide. Available at: http://www.ama-org. Accessed October 2005.
8. Department of Health and Human Services. Federal Register, Part II, August 8, 2005. Available at: Accessed October 2005.
9. Health and Human Services (HHS) Office of the Inspector General. Available at: Accessed October 2005.
10. Medicare and Medicaid Services (CMS). Available at: Accessed October 2005.
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© 2007 Lippincott Williams & Wilkins, Inc.