Payment Adjustment Rules for Multiple Procedures and CCI Edits

Surgical and medical services often include work that is required to be done prior to a procedure and post-procedure. When there are multiple procedures done by the same physician, group, or another qualified healthcare professional on the same day, the pre and post-work is only required once. Therefore, CMS and other payers take a reduction in reimbursement for the secondary and subsequent procedures applied to the Practice Expense (PE). This is called a Multiple Procedure Payment Reduction (MPPR). 

Using a CCI validator or claim scrubber can be helpful and will often give errors and warnings if a set of codes require a modifier. However, this is not always the case. Other validators such as Find-A-Code's Scrub-A-Claim not only use government edits, but also private payer edits. Therefore, you may see different results.    

It is vital to have access to current information, coding rules, and guidelines. Refer to the NCCI policy manual if you have questions, or are expecting to see an edit that is not there with the NCCI validator.  Understanding the description of modifier 51 - multiple procedures, sounds simple enough, but is it? How is it used by government and private payers? When reporting multiple procedures, it is often misunderstood. 

CMS - NCCI Edit Rules

Take a look at the use of modifier 51 with the NCCI edits. For example, "Why are there no errors or warnings with the CCI edits stating the following codes should require the use of modifier 51? I am reporting multiple procedures using the following codes: 51741 and 51784."  

First of all, remember the CCI editor is using CMS rules. Therefore, we must understand how CMS applies the standard payment adjustment rules for multiple procedures as well as the use of modifier 51. For example, CMS has assigned the #2 payment indicator, telling us the standard payment adjustment rules for multiple procedures apply to both CPT codes, 51741 and 51784.

Some Payers Align with CMS

Here is an example of a UnitedHealthcare (UHC) policy using the same processing rules as CMS on Multiple Procedures Payment Reduction (MPPR) for medical and Surgical Services.

The UHC surgery policy states; "The use of modifier 51 appended to a code is not a factor that determines which codes are considered subject to multiple procedure reductions; the determining factor is the standard payment adjustment rules."

Medicare Physician Fee Schedule (MPFS) Indicators

CMS assigns the standard payment adjustment rules, assigning indicator codes to CPT codes using Medicare Physician Fee Schedule (MPFS) Indicators. These are assigned to codes applicable to the multiple procedure reduction using the status #2 indicator. Status indicators can be found on the CPT code information page under the Additional Information tab when using Find-A-Code. 

The #2 indicator description states "Standard payment adjustment rules for multiple procedures apply." The payment adjustment rules for the #2 indicator is below. 

Payment Adjustment Rules for #2 Status Indicator

According to CMS, "Standard payment adjustment rules for multiple procedures apply for a procedure reported on the same day as another procedure with an indicator of 1, 2, or 3, rank the procedures by fee schedule amount and apply the appropriate reduction to this code (100%, 50%, 50%, 50%, 50% and by report). Base the payment on the lower of (a) the actual charge or (b) the fee schedule amount reduced by the appropriate percentage." 

Therapy, Time-Based - Multiple Units

For selected therapy codes, the rules may be different. For example, according to CMS MLN MM8206 Multiple Procedure Payment Reduction (MPPR) for Selected Therapy Services, the MPPR is applied to units when the code is a time-based code and multiple units are billed to the same patient on the same day. This reduction applies to Healthcare Common Procedure Coding System (HCPCS) codes that are considered "Always therapy". Therefore, the first unit is paid in full and the remaining are paid with the payment reduction rule.  

RVU's Determine Ranking

RVUs assigned by CMS are used to determine the ranking of services. The highest RVU will be paid at 100%, and the subsequent services will each be paid at 50%.

RVUs are generally higher in a physician's office due to the practice expense. For example, the practice expense (PE) for a facility with CPT code 11044 is 1.68, but in an office setting the practice expense is 3.895. Any place of service not listed as a facility will be ranked as a Non-Facility. 

Facility Place of Service (POS) 19, 21, 22, 23, 24, 26, 31, 34, 41, 42, 51, 52, 53, 56 and 61.

Emergency Room (POS 23) Facility

Office (POS 11) Non-Facility

Other Factors to Consider

• If only one code is subject to payment reduction there will be no reduction in payment.
• If one code is subject to payment reduction and submitted with 3 units, the payment reduction would apply to the second and third Units. 
• Payment adjustment rules do not apply for add-on codes are assigned 0,  No payment adjustment rules for multiple procedures apply.
• The only modifier that will override the MPPR if appropriately reported, is modifier 78.

Denials

If your claim is denied for Multiple Procedure Payment Reduction (MPPR) you will get a denial reason code of 45 (Charge exceeds fee schedule/maximum allowable or contracted/legislated fee arrangement) and a Group Code of Contractual Obligation (CO), according to the  CMS Pub-100 Claims Processing Manual - Search "Standard Payment" in the Pub-100.

Be sure to contact your payer or carrier to determine their payment processing rules.