Prostate Biopsy Claims Affected by Policy Change

Medicare carrier for region J1 and region J11 first to adopt an update published by NCCI

CEO SUMMARY: Quietly, with no fanfare and little advance public notice, the Medicare program is taking steps to change reimbursement policy for prostate biopsies. On August 7, 2012, Palmetto GBA adopted the new policy published on January 1, 2012, by the National Correct Coding Initiative (NCCI). Pathology billing experts and attorneys state that this policy limits reimbursement to four units of service per case. The news is only now reaching pathology labs across the nation.

BAD NEWS LIES AHEAD for anatomic pathology laboratories that perform large volumes of prostate biopsy testing. Payers may be poised to institute deep reimbursement cuts for 12-core prostate biopsy claims.

If this happens, it will greatly reduce the revenue flowing to those pathology laboratories now testing large volumes of prostate biopsies. What makes this threat credible is that the first payer known to take steps to reduce reimbursement for prostate cancer biopsy testing is Palmetto GBA, one of the nation’s largest Medicare carriers.

On January 1, 2012, the National Correct Coding Initiative (NCCI) manual was released, and it referenced reimbursement for prostate biopsies. In this release, NCCI was attempting to distinguish between the appropriate use of HCPCS G0416-G0419 (known as G codes) and CPT 88305, according to PSAPath, LLC, a lab billing company in Florence, South Carolina.

In a note it recently sent to its client labs, PSAPath said, “The NCCI manual included ambiguous language which many understood to be another attempt by Medicare to distinguish between the appropriate use of the HCPCS G0416- G0419 codes introduced in 2009 for prostate biopsy specimens collected via the transperineal or ‘saturation’ biopsy technique (PSB) and the use of CPT 88305 for reporting prostate needle biopsies col- lected via the traditional transrectal ultrasound (TRUS) technique.

“However, a policy update published by Palmetto GBA [on August 7] has shed new light on the curious NCCI language, making it clear that it is Medicare’s intent to require the use of these new G-codes for all prostate procedures anytime five or more separate specimens [per case] are billed,” PSAPath said. “This new policy effectively caps reimbursement for all prostate biopsy specimens, irrespective of the manner in which they were collected.”

Jane Pine Wood, attorney at McDonald Hopkins, the national law firm based in Cleveland, Ohio, sent a note to clients of her law practice. Wood wrote that “On August 7, 2012, Palmetto GBA, a Medicare contractor, issued a policy update entitled ‘Prostate Biopsy Coding/ Billing Guidelines.’ This Palmetto policy references a National Correct Coding Initiative (NCCI) update that was published in January 2012, and appears to be the first instance of a Medicare contractor confirming its adoption of the January 2012 NCCI update.”

The issue of concern to anatomic pathology groups and pathology laboratory companies is how the new policy will change the way prostate biopsy claims for Medicare patients can be submitted to Palmetto GBA. Wood wrote that “…The August 7, 2012 Palmetto GBA policy adopts the NCCI update, explaining that the number of prostate biopsy specimens (regardless of collection technique) that can be reported with CPT Code 88305 is limited to four units per case, and the evaluation of five or more prostate biopsies must be reported using the G codes.”

Palmetto Posted The Policy

On the Palmetto GBA website for Medicare region J1 (covering the states of California, Nevada, and Hawaii) and J11 (covering the states of North Carolina, South Carolina, Virginia, and West Virginia), the updated policy for prostate biopsies is presented. It states, in part, that:

Effective January 1, 2012, Medicare has limited the number of prostate biopsies that may be reported for CPT© code 88305 to four (4) services. To report five or more prostate biopsies, providers must use G0416 with 1 unit of service. NOTE: Report ONLY CPT code 88305 or HCPCS code G0416 for the prostate biopsies based on the number of biopsies performed.

This is a significant development for all laboratories that perform substantial numbers of prostate biopsies. It will effectively lower the reimbursement currently paid for a 12-core prostate biopsy.

Financial Ramifications

PSAPath explained the financial implications of the change as follows:

The Medicare Physician Fee Schedule National Payment Amount (unadjusted for locality) for G0416 is $670.88, which represents the equivalent of 6.34 units of 88305 (which has a National Payment Amount of $105.86 per unit). Unfortunately, for those who perform PC-only services, the news is worse still. The National Payment Amount for G0416-26 is $182.10, which represents the equivalent of only 5.0 units of 88305-26, which has a National Payment Amount of $36.08 per unit.

Therefore, laboratories and physician practices that typically bill for more than six specimens for a prostate biopsy case will see their reimbursement for these cases capped at the equivalent of 6.34 units for a global service and 5.0 units for a PC-only service. For a laboratory or pathology practice that has typically billed for 12 specimens for the average prostate case, the Medicare reimbursement will effectively be reduced by 47% on global cases and by 58% for PC-only cases.

THE DARK REPORT is one of the first to report these developments. At this point, Palmetto GBA is referring all questions to the Centers for Medicare and Medicaid Services (CMS). Because of the new policy’s expected financial impact, there is likely to be quite an uproar from many pathology laboratories.


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