Medicare Approves New Pass-Through PTA Device
Gains and Losses
There are numerous scams that promise a huge reward if you will only send some upfront money to cover costs. But alas, often the reward never arrives. Medicare is not scamming providers on pass-through device payments. You will receive your “extra” payment. But as explained below, you need to make sure your charge amount is calculated correctly so you do not end up losing more than you gain.
As usual, Medicare announced several code changes in the April 2015 OPPS Update including new codes, new pass-through devices and drugs, changed status indicators, and changes in classification of skin substitutes. See the table at the end of this article for a list of the April changes.
One notable update was the approval of a new pass-through device category for drug-coated, non-laser, transluminal angioplasty catheter effective April 1, 2015. The new category was granted by CMS in response to a request from Medtronic for a new pass-though category for the IN.PACT Admiral Paclitaxel Coated Percutaneous Angioplasty (PTA) Balloon Catheter. The new device has been assigned HCPCS code C2623.
The Social Security Act requires that CMS create additional categories for transitional pass-through payment of new medical devices not described by existing or previously existing categories of devices. Under OPPS, new device categories are eligible for transitional pass-through payment for at least 2, but not more than 3 years while CMS gathers cost data. When pass-through status expires, devices are packaged into the payment for the procedure. A portion of the Medicare payment amount for device-dependent procedures is for the device itself.
Pass-through devices are assigned a Status Indicator (SI) of H and receive separate cost-based reimbursement not subject to a co-payment. To receive the appropriate cost-based payment, providers must calculate the charge amount for the device using their actual acquisition cost for the device and their hospital outpatient charge-to-cost ratio (CCR).
The formula is: Device Acquisition Cost ÷ CCR = Device Charge Amount
Device Cost = $10,000.00
Charge-to-Cost Ratio = 0.75
$10,000 ÷ 0.75 = ≈$13,335.00
Medicare reverses this payment logic when calculating your payment amount, so that your “payment” should effectively be your cost amount.
Since the device-dependent procedures with which this new device will be reported already contain a portion of their payment for devices, the payment of the procedure APC payment amount will be “off-set” when reported with the new HCPCS code C2623. Medicare deducts from pass-through payments for devices an amount that reflects the portion of the APC payment amount that CMS determines is associated with the cost of the device.The C2623 device may be billed with various peripheral transluminal balloon angioplasty codes that are assigned to various peripheral transluminal angioplasty codes in APC 0083, APC 0229, and APC 0319.
Hospitals should be sure to set the charge for pass-through devices appropriately so they are receiving correct reimbursement. As you can see, if you don’t, the device offset may negatively affect your payment.
Other Coding Updates - Effective April 1, 2015 unless otherwise noted.
Article by Debbie Rubio
This material was compiled to share information. MMP, Inc. is not offering legal advice. Every reasonable effort has been taken to ensure the information is accurate and useful.