Pricing Codes Without RVUs - Medicare Advantage

Policy No: 113
Originally Created: 01/01/2018
Section: Administrative
Last Reviewed: 07/01/2018
Last Revised: 07/01/2018
Approved: 07/05/2018
Effective: 08/01/2018

This policy applies to all physicians, other qualified health care professionals, hospitals and other facilities.

Definitions

Establishing a Fee
Determining an allowance that will be used to pay all claims processed for dates of service on or after the date the fee is established until the next scheduled fee update.

RVU - Relative Value Unit
Our health plan uses RVUs (facility, non-facility) published by the Centers for Medicare & Medicaid Services (CMS) in the CMS National Physician Fee Schedule Relative Value File.

RVU-based
A reimbursement methodology where an allowed amount is defined and associated specifically with a Healthcare Common Procedure Coding System/Current Procedural Terminology (HCPCS/CPT®) code. The allowed amount is determined using the RVU associated with the code and a conversion factor.

Unlisted Code
A HCPCS/CPT code with a non-specific description. It is used when a more specific code is not available. Unlisted code descriptions usually include the phrase "unlisted procedure", "not otherwise specified", "not otherwise classified" or "miscellaneous".

Policy statement

In situations where a fee has not been established for a CPT or HCPCS code (i.e., unlisted codes, new codes or codes which CMS has not published an RVU or a clinical lab allowance), the following protocol will be followed:

  1. CMS Local Carrier published fee where applicable
  2. RVUs published by Optum in The Essential RBRVS. For modifier 26 and TC codes, Optum RVUs will be used only when CMS has determined that the code-modifier combination is valid. If CMS has determined a code is invalid with 26 or TC, no pricing will be established for the combination
  3. When either of the above allowances are not available, the following comparable service methodology is used.

  • Base the allowance on the most closely comparable code. For example, in the case of a laparoscopic procedure without a specific CPT or HCPCS code, base the allowance on the most closely comparable open code or
  • Base the allowance on the most closely comparable code with modifier 22.
  • When the procedure or service is a combination of two or more existing CPT or HCPCS codes or components of these codes, determine the appropriate combination of the applicable CPT or HCPCS code components and base the allowance on those.
  • Base the allowance on a percentage of charges.

When additional information becomes available subsequent to establishing a fee, the fee will be re-evaluated using the above hierarchy. For example, when a CMS RVU becomes available in a subsequent year's CMS file for a code that was previously considered a code with no fee, our health plan will prospectively implement the RVU for that code at the time of its first final publication and no changes will be made in subsequent quarters.

CPT or HCPCS codes without a published CMS RVU will be priced using the methodology described above, and the code will be attributed not only the RVU but the associated indicators in the National Physician Fee Schedule Relative Value File.

Unlisted codes generally cannot have fees established and will be priced using the methodology described in step 3 above every time they are submitted on a claim.

Claim lines billed with an unlisted or not otherwise classified code must be submitted with a description of services provided; claim lines submitted without a description, with a generic description or with an incomplete description may be denied.

Appropriate medical records such as operative report, may additionally be required to adjudicate the claim. Medical records not submitted upon request may result in denial of all or a portion of a claim.

Maintaining a Fee Once Established

Method for establishing fee:

  • CMS Published Fee, Rule or CMS Local Carrier Published Fee
    • Updated whenever the CMS or Local Carrier published fee or rule is updated.
  • Optum RVUs
    • Updated whenever our RVU-based Fee Schedule is updated, using the Optum RVUs in effect at the time.
  • Comparable Service Methodology

    • The identified comparable code(s) and modifiers will be documented as the pricing rule for the code with no RVU. Whenever our health plan RVU-based Fee Schedule is updated, the fee for the code with no RVU will be updated by re-applying the pricing rule. The new RVU and conversion factor used as part of our health plan's RVU-based Fee Schedule update will be applied to the pricing rule.

References

None

Disclaimer

Your use of this Reimbursement Policy constitutes your agreement to be bound by and comply with the terms and conditions of the Reimbursement Policy Disclaimer.