The Changing Face of Urology in 2005

LHRH AGONISTS: CONTEMPORARY ISSUES The Changing Face of Urology in 2005 M. Ray Painter, MD Physician Reimbursement Systems, Inc., Denver, CO The practice of urology is changing, not only from a medical and technological standpoint, but also from a business standpoint. New and improved computer technology and enhanced databases have allowed payers, including Medicare, to develop more detailed and complicated rules. These same advancements will allow physicians to streamline their practice, automate transactions, and match computer to computer, the continuously changing payment rules and regulations that determine how urologists receive payment for their services. [Rev Urol. 2004;6(suppl 8):S32-S38] © 2004 MedReviews, LLC Key words: Centers for Medicare and Medicaid Services • Health maintenance organizations • LHRH agonists • Average sales price • Evaluation and management services • Practice management information systems • Electronic medical record • Connectivity • Modifier -25 his article outlines the proposed changes that will most likely be implemented in 2005, as well as the projected changes for 2006, and recommends actions that should be taken to ensure full payment (according to one’s contracts) for all services provided. Additionally, suggestions for automating billing and collections, specific recommendations on problematic coding issues, and cautions on coding pitfalls are included. The options that should be considered in providing luteinizing hormone-releasing hormone (LHRH) agonists for patients in 2005, 2006, and beyond are also discussed in detail. This article interprets recent or upcoming changes in order to allow the reader to plan for 2005 and, tentatively, for 2006. T S32 VOL. 6 SUPPL. 8 2004 REVIEWS IN UROLOGY Changing Face of Urology Update 2005 The current landscape for change was set by the passage of the Medicare Prescription Drug Improvement and Modernization Act (MMA) of 2003.1 Many changes have been accepted into daily practice over the past year as a result. In August 2004, Centers for Medicare and Medicaid Services (CMS) published, in the Federal Register, the proposed rules for revisions to payment policies under the physician fee schedule for the 2005 calendar year.2 Medicare has estimated that there will be an overall 13% decrease in Medicare payments to urologists in 2005, fueled by a decrease in payment for LHRH agonist drugs (Figure 1). This profit center accounts for up to 30% of the “take home pay” for some urologists. According to Medicare statistics, urologists received approximately 37% of their 2004 total revenues from drugs and 60% from all other services. Medicare has estimated that the change in payment for drugs will decrease the overall urology income from LHRH agonists by 38%. The cost of chemotherapeutic injections (96400) will decrease less than originally anticipated (national average down from $64.07 to $51.14).2 Figure 1. Income fluctuations for urologists in 2005. E & M, evaluation and management; RVU, relative value unit; GPCIs, geographic practice cost indices. Abstracted from Medicare program.2 Urology - 2005 Conversion factor +1.5% Procedural/E&M + 1% Drugs – 38% RVU & GPCIs +/– Overall 13% mon urology procedures has also changed slightly, if at all. For example, cystoscopy, in both the office and the hospital, and radical prostatectomy have increased in price slightly whereas the cost of prostatic needle biopsies has decreased a few dollars. The overall impact of the changes in payment for all other urology procedures and services is an increase of 1% in total Medicare income. After January 1, 2005, Medicare will routinely pay for low osmolal contrast media on the basis of average sales price (ASP) plus 6% in accordance with the new standard methodology for drug pricing. In 2006, there will be another 5% decrease in the con- Medicare has estimated that the change in payment for drugs will decrease the overall urology income from LHRH agonists by 38%. However, those figures may change. A committee, formed by the American Medical Association (AMA), is studying all chemotherapeutic injections with the possibility that codes will be changed and/or new codes will be added. CMS is studying the payment for these services as well. This sets the stage for changes that could be made prior to implementation of the 2005 fee schedule. The price of some of the most com- version factor unless CMS changes the fee schedule formula or Congress changes the decrease to an increase. Fortunately, this is exactly what has happened for the last several years. HMOs Now and in the Future Five to 10 years ago, Health Maintenance Organizations (HMOs) were in control in many parts of the country.3 Urologists were forced to sign contracts below their payment com- fort zone. In fact, many physicians were cut from HMO panels. The payers had the data and they knew what physicians were accepting from Medicare, and, at times, from other payers. They always knew how much the other physicians were accepting in their contracts. The severity of the problem varied from one geographic area to the next. Many variables, including rural versus urban classification, employment base, aggressiveness of the HMO, physician supply, and physician resolve, all played a role in shaping the physician–payer relationship in each area. Employers and employees were in support of the changes. They were convinced that the cost of health care was out of control, and that HMOs were the answer.4 Within a few years, patients (employees) demanded another change. They did not like the gatekeeper concept or the idea that the HMOs could limit or control their care. Actually, they disliked the idea that their physician was “capitated” and being paid to not deliver care. The demand for “preferred provider organizations” began. Now, the emphasis is on individually owned, individually controlled healthcare plans, such as Health Savings Accounts. Section 222 of the MMA of 2003 added incentive for insurance compa- VOL. 6 SUPPL. 8 2004 REVIEWS IN UROLOGY S33 Changing Face of Urology continued Figure 2. Drug payments for urologists in 2005. Abstracted from Medicare program.2 Drugs - 2005 106% - Average Sale Price Payment to change quarterly *** Change contracts to match potential payment changes nies to develop managed care plans for Medicare recipients.1 As business in the United States is usually drawn by money, there will probably be a resurgence of Medicare-managed healthcare plans. How will this affect the urologist? Urology is a small (but very important) player in this Medicare game, relatively speaking, as urologists only make up about 1.7% of the physician community. However, currently 50% to 70% of ers and contracts, they have a fuller understanding of their potential bargaining power, and are better informed about the advisability of signing a particular contract. Because bad decisions are usually the result of a lack of data, information is potentially the best weapon for leveling the playing field. If all urologists were armed with the same complete data set, most would reach the same conclusions about signing a contract. Urologists make up only 1.7% of the physician community; however, currently 50% to 70% of urology patients are on Medicare. urology patients are on Medicare. This percent will probably increase in the next few years, suggesting, unfortunately, that urologists will have a relatively small amount of influence, but will be significantly affected by the changes. In most parts of the country urologists are now in a much better position to handle the contract challenges. Demand is generally greater than supply and in most markets, practice mergers and growth have increased market share, and, therefore, bargaining power. Urologists have a better understanding of this bargaining power and are rejecting bad contracts, forcing the payer to return with a better one. Additionally, urologists are obtaining better data about pay- S34 VOL. 6 SUPPL. 8 2004 Payment for LHRH Agonist and Other PhysicianAdministered Drugs The MMA 2003 changed the way physicians will be paid for injectable drugs in the office in 2005 and beyond. In the past, urologists were paid a percentage of the average wholesale price (AWP) (95% of AWP in 2003, and between 80% and 85% in 2004).5,6 In 2005, urologists will be paid 106% based on ASP, not 106% of their purchase price for the drug (Figure 2). How will the final payment be calculated and what does it mean to the practicing urologist? First, what is the difference between ASP and AWP? AWP is a price provided by the pharmaceutical company for each drug.1,7 Each pharmaceutical REVIEWS IN UROLOGY company will calculate the ASP on a quarterly basis using actual sales information based on detailed and standardized rules.8 All drug sales, with few exceptions such as drugs sold to Medicaid, the government, and a number of other specific categories, will be included. All sales to physicians, purchasing groups, pharmacists, wholesalers, including all volume, cash, or other discounts will be used in the calculations (Figure 3). After the manufacturer’s ASP is determined, the CMS will average all manufacturer’s ASPs that are charged under a single “J” code according to their respective volumes to determine an ASP for that J code. For example, the ASP for the luprolide acetates, Lupron Depot® (TAP Pharmaceutical Products, Inc., Lake Forest, IL) and Eligard® (Sanofi Synthelabo, Fort Collins, CO) will be averaged to develop a single ASP for the Healthcare Common Procedure Code (HCPC) (J9217).2 The proposed rules anticipate that Medicare carriers in each state will pay using the least costly alternative (LCA) methodology. The LCA methodology (equal payment for drugs that have been determined by Medicare to be “medically equivalent” such as Lupron, Eligard [J9217], and Zoladex [goserelin acetate] AstraZeneca Pharmaceuticals, LP, Wilmington, DE, [J9202]) would result in a third calculation; the ASP from the 2 “J” codes will be normalized by sales price and number of “medically equivalent” units sold to develop a single ASP. Most states have already adopted this methodology. The payment as published in the proposed payment rules for 2005 ($234.28) is higher than many anticipated.8 However, the proposed rules state that this payment is a suggested value for discussion only. The final payment for the first quarter of 2005 will be calculated using actual third quarter ASP data from the manufacturers and will be published on Changing Face of Urology Figure 3. Payment calculations for 2005. LCA, least costly alternative; HCPC, healthcare common procedure code. Abstracted from Medicare program.2 Average Sales Price Manufacturers “Average Sales Price” HCPC (J code) “Average Sales Price” LCA “Average Sales Price” October 31, 2004.9 As stated above, the payment will be 106% of the calculations for actual ASP, and not on the price paid. The payments will change quarterly based on the changes in reported ASPs. Obviously, if company A sells the drug at a lower price than ASP and a physician buys from that company, the physician will realize a higher spread. However, the ASP will probably drop in the next quarter. If company B lowers its price to compete with company A, the ASP will be even lower the following quarter. When deciding how to treat patients with LHRH agonists in the future, keep in mind that the ultimate goal is to continue to provide hassle free, complete care for patients including the needed medications. With the decrease in profit margin, urologists will have to be very selective in contracting for LHRH agonist drugs. High cost of inventory, loss of money from poor insurance coverage information, or lack of collection for co-payments could be disastrous. Urologists should continue to obtain the best price possible for the drug most appropriate for their patients, be sure their contract price is ASP or below, and be aware that the payment may decrease each quarter. It is also advisable to be prepared to adjust purchasing contracts accordingly.10 CMS is aware that prices can differ substantially between urologists and urology practices but clearly supports physician’s choice, or will physicians receive the drug that the agency has contracted for that quarter? Will the drug arrive on time? What are the physicians’ options if it does not? What kind of hassle will patients encounter in paying the co-payments? It is hoped that these questions will be resolved prior to the publication of this article. Payments for Injections and Evaluation and Management Services on Day of Injection physicians treating patients with the appropriate drug. CMS will, however, be watching closely for major shifts in treatment regimens, such as shifting a significant number of patients from injections to implants prior to the end of this year. It is important, therefore, to fully document any changes made in patients’ treatment. In 2006, physicians will be paid 106% of ASP or they will have the option to buy drugs from a contracting (acquisition) agent that will deliver the drugs to the office.1 The decision is an all or nothing one, however. Making this choice will eliminate all charges for drugs to Medicare and any income for storing or handling the drugs. However, there are many unknowns about the new system because the final regulations have not been published. Will they be obligated to deliver the drug of the The payments for injections increased significantly in 2004.1 For example, chemotherapy administration (96400), subcutaneous or intramuscular, currently pays approximately $64.00. Physicians should be sure they are not discounting the normal fee for injections below the current Medicare payment level. This payment was proposed to be around $51.00 in 2004,2 but may change if new injection codes are added. The law also changed the rules for charging an evaluation and management (E & M) service on the same day as a chemotherapeutic administration (such as 96400, intramuscular or subcutaneous injection). One can no longer charge a 99211, first-level established patient code (commonly called “the nursing code”) on the same day that a chemotherapeutic admin- Figure 4. Coding changes in 2004. Changes for 2004 96400 + 99211 - No 96400 + 99212 - 25 - OK 99215 - 25 VOL. 6 SUPPL. 8 2004 REVIEWS IN UROLOGY S35 Changing Face of Urology continued istration such as 96400 has been charged. However, if the urologist sees the patient and provides a service that qualifies for the use of modifier -25, then a higher-level service code 99213, 99214, or 99215 can be charged by attaching modifier -25 to the appropriate level code (Figure 4). Office Automation and Improved Data With the development of the Health Insurance Portability and Accountability Act (HIPAA)11 compliance regulations for the electronic transmission of data, most urologists have changed or will have to change their practice management information system (PMIS). The latest statistics indicate that over 400,000 small healthcare offices are not compliant with HIPAA regulations. Many others are compliant with the electronic submission regulations through their clearinghouse, but are not compliant with the privacy regulations in their offices.12 All urologists should therefore consider purchasing an electronic medical record (EMR). The Workgroup for Electronic Data Interchange12,13 recently published white papers on the Strategic National Implementation Process. The first, “Small Practice Security Implementation White Paper,” published in April 2004, outlined the specific security safeguards that must be incorporated in PMISs, EMRs, and office procedures.12 The need for a working compliance plan was emphasized. The second, “HIPAA Security White Papers,” published in August 2004,12 emphasized the need for compliance with the law and detailed the penalties for noncompliance. The requirements can be defined as one of 3 basic safeguards: administrative, physical, and technical. All business entities, including physician offices, must comply with all 3, with few exceptions. In general, S36 VOL. 6 SUPPL. 8 2004 the HIPAA rules apply to all practices that submit claims electronically, either directly or through a billing service or clearinghouse. Financially, it makes no sense to avoid electronic submission of data in order to circumvent HIPAA requirements. If a business is not on a PMIS and sends claims electronically, it is losing potential income. It is imperative to modernize PMISs and to add EMRs in a timely fashion. There are 4 major issues that should be taken into consideration when planning to modernize by purchasing a PMIS or an EMR: • ease of use • vendor and their support • connectivity of its system, and • cost PMISs are continually improving, becoming more powerful and less fix it immediately), 2) easy updates (performed by the vendor at the central site usually with no additional charge), 3) the physician’s office does not have to upgrade the system; staff only has to learn the “new wrinkles,” 4) program functionality should be constantly improving and feedback/ customer service should be faster, 5) Internet allows access from anywhere, which could allow working at home or accessing information from the hospital. Security, virus protection, and secure links are available for both client-server and the Internet. System backup should be a part of everyday practice; additionally, there should be multiple server locations and ample storage. For the client-server system, maintenance and backup can be the responsibility of the office or be part It is imperative to modernize PMISs and to add EMRs in a timely fashion. expensive. Selecting the right system should be based on practice needs, considering function and price. In general, an Internet-based system is the most cost effective option because it only requires reasonably priced computers to access the Internet program. Detailed cost comparisons must be factored into the decision, including all aspects of the current systems and anticipated future upgrades and changes. Usually, initial costs and the in-house overhead costs are greater with a local client-server system but the monthly fee is greater with an Internet system. Internet connectivity and security is no longer a concern in most areas because of the increasing availability of DSL, Broadband, and/or T1. Some of the key advantages of an Internet web-based system include 1) 24-hour maintenance at the central site (if the server goes down someone should REVIEWS IN UROLOGY of the contract with a local vendor. Connectivity should be a paramount consideration in any purchasing decision. The PMIS should directly communicate with the EMR or future EMRs and the chosen pre-submission screening and post-payment review software. The PMIS should also have flexibility as to who receives the claims. The PMIS vendor should have multiple clearinghouse choices or have plans to make direct payer connections easy for the office. Physicians also need the flexibility of inserting other products or services into the billing process. Pre-submission and post-payment screening software is available and will improve income, lower the risk of incorrect billing and denied claims, decrease overhead, and improve the information that is available for contracting. Physicians will be able to obtain monthly reports monitoring contract Changing Face of Urology compliance of the payer. As more physicians move into the informational age and the transactional part of business is simplified by electronic systems, choosing the right option will become increasingly more critical in terms of both time and financial resources expended/ recouped. Prices vary and up-front costs, monthly and user fees, fees for annual maintenance, updates, transactions, and volume all need to be considered when comparing and choosing a system.14 In addition to cost, connectivity, and support, the ease of documentation is a major consideration when choosing an EMR. Physicians should be sure that the EMR is flexible enough to accommodate the desired method of documentation for all urologists in the office, whether it is by typing, dictation, or drop-down tables. Furthermore, physicians and staff members must beware of a system that allows for the creation of a full paragraph of text with 1 keystroke or with minimal multiple-choice changes to the file. Medicare needs to be sure that each “bullet” or element of work was actually performed. Connectivity for incoming data (laboratory and X-ray results, communications from other physicians both inside and outside the practice, and employees) and outgoing data is very important. The office must be able to transform faxes and scanned images into an electronic format and also have the capability to send become a hot topic15 but unfortunately, the use and recognition of modifier -25 is still somewhat variable and frustrating for both the provider and the payer. The AMA Current Procedural Terminology (CPT®) 200416 defines modifier -25 as a “significant, separately identifiable Physicians should be sure that the EMR is flexible enough to accommodate the desired method of documentation for all urologists in the office. referral letters, prescriptions to pharmacies, and communications to patients, in addition to sending all billing information to the practice management system. Total communication must be achieved between the EMR and the practice management system. Another bonus feature of the EMR is a coding module. Such a module must be accurate and easy to use, however. Coders within the office should double check the coding module to ensure its accuracy. Modifier -25 The correct use of modifier -25 by both payers and providers has again evaluation and management service by the same physician on the same day of the procedure or other service” that is used when an E & M service, which is significant and clearly separate from the other services, was provided on the same day. The definition further indicates that the E & M service is provided on the same day separate from usual pre- or postoperative care for any global service provided on the same day. The CPT manual also states that a separate problem or diagnosis is not required to distinguish the E & M service as separate or significant. Many private payers and Medicare recognize the modifier -25 as intended Main Points • The Medicare Prescription Drug Improvement and Modernization Act of 2003 has impacted the income of urologists and will continue to do so through 2005. • Urologists are in a much better position to handle the contract challenges ahead because of better data about the payer, the contracts being offered, their potential bargaining power, and the advisability of signing a particular contract. • In the past, urologists have been paid a percentage of the average wholesale price for injectable drugs; in 2005, urologists will be paid 106% based on the average sales price. • Physician offices should modernize their practice management information systems (PMISs) and look into purchasing an electronic medical record (EMR). • Key issues to consider when purchasing a new PMIS or EMR are 1) the ease of use, 2) the vendor and its support, 3) connectivity of the system, and 4) cost. • The recent overuse of the modifier -25 billing code, which indicates that an evaluation and management (E & M) service was performed on the same date as a procedure, has caused some payers to deny the payment until further documentation has been provided. Therefore, it is imperative for physicians to document E&M services clearly and separately from other procedures performed on the same day. VOL. 6 SUPPL. 8 2004 REVIEWS IN UROLOGY S37 Changing Face of Urology continued by CPT and will pay for the appropriately identified E & M services. However, the recent and increasing use of the modifier has prompted mate documentation and billing, code correctly, and prepare for the resurgence of Medicare HMOs. Fortunately, the future is brighter than the projec- The key to successfully appealing denied E&M payment is good documentation of “medically necessary” services and to document E&M services separately from other procedures performed on the same day. many payers to deny modifier -25 E & M codes, requesting further documentation for payment. These denials do not mean that the modifier -25 is not recognized, but that the payer wishes to review and evaluate the documentation for and use of the modifier before paying for the E & M service. Thus, clear documentation of the medical necessity of the services and the accurate use of the codes are essential and will be important during the appeal of the denial process. In summary, physicians should be prepared for an initial decrease in income and in 2005, plan to delay contracting for purchased drugs until all options and the exact amount to be paid by Medicare is known, auto- S38 VOL. 6 SUPPL. 8 2004 tions of doom and gloom previously suggested for 2005. System automation and improved data are going to increase income in a number of ways. 6. 7. 8. 9. 10. 11. References 1. 2. 3. 4. 5. REVIEWS IN UROLOGY Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub L No. 108-173, 117 Stat 2066 (2003). Medicare program: revisions to payment policies under the physician fee schedule for calendar year 2005 (CMS-1429-P codified at 42 CFR § 405, § 410, § 411, § 414, § 418, § 424, § 484, and § 486) 69 Federal Register 47488 (2004). Terry K. When health plans don’t want you anymore. Med Econ. 1994;71:138-146. Coile RC, Jr. Business and health: ten leading corporate strategies to control health costs in the 1990s. Hosp Strategy Rep. 1990;2:1, 3-8. Medicare program: changes to Medicare payment for drugs and physician fee schedule payments for calendar year 2004 (CMS-1372-IFC codified at 42 CFR § 405 and 414) 69 Federal Register 1084 (2004). 12. 13. 14. 15. 16. Medicare program: changes to Medicare payment for drugs and physician fee schedule payments for calendar year 2004 (CMS-1372-IFC codified at 42 CFR § 405 and § 414) 69 Federal Register 15703 (2004). ASP Proposed Rule for CY 2005. For Medicare Part B drug issues, refer to Part III, Section E 303, Payment for covered outpatient drugs & biologicals (CMS-1429-P codified at 42 CFR 405, § 410, § 411, § 414, § 418, § 424, § 484, and § 486) 69 Federal Register 47489 (2004). Medicare program: manufacturer submission of manufacturer’s average sales price (ASP) data for Medicare Part B drugs and biologicals – final rule (CMS-1380-F codified at 42 CFR § 414) Federal Register 55763 (2004). Medicare program: manufacturer submission of manufacturer’s average sales price (ASP) data for Medicare Part B drugs and biologicals – final rule (CMS-1380-F codified at 42 CFR § 414) Federal Register 17935 (2004). Painter RM. The switch to ASP in 2005: what you need to know. Urology Times. May, 2004; 32:7. Health Insurance Portability and Accountability Act of 1996, Pub L No. 104-191, 11 Stat 2004 (1996). Workgroup for electronic data interchange security and privacy workgroup SNIP HIPAA [database online]. Reston, VA: Security White Papers; 2004. Accessed October 1, 2004. Other security white papers can be found at the Workgroup for Electronic Data Interchange website, available at: wedi.org/snip/public/articles/dis_publicDisplay.cfm?docType=6&wptype =2. Accessed October 1, 2004. Painter RM. Consider these four issues when buying an electronic medical record. Urology Times. July 2002;30:7. Painter RM. When to use the 25 modified with E & M: a refresher. Urology Times. June, 2004;32:8. Current Procedural Terminology, CPT 2004: Standard Edition. Chicago, IL: The AMA Press; 2004.