8 Factors Impacting Spine Surgery Coverage Rates

Written by Laura Dyrda | February 28, 2013 | Print  |
Here are eight significant factors making an impact on spine surgery coverage rates.
1. Documentation of conservative care. Payors are demanding more documentation of conservative care today than in the past, and depending on spine surgeons to produce that documentation. Each insurance company has defined coverage policies for spinal surgery and many will deny care unless protocol is followed.

Danielle Koelbl on spine surgery coverage"We are seeing payors increasingly push for stronger documentation of conservative treatment plans prior to non-emergent surgery," says Danielle Koelbl, president of MedRev Solutions, a healthcare revenue cycle and receivable management company. "I suggest spine practices make sure their teams are reviewing top volume payor qualities to ensure they are following conservative care pathways. We don't want the payors dictating care, but it's important to know what conservative care treatment plans they require, what they deem standard of care and figure out whether that's in line with what your physicians perform and suggest."

Even after following protocol, insurance companies may still deny care. However, insurance companies may respond positively to data collection. Tracking outcomes and providing this information to top volume payors can help providers take control of their payment plans in the future.

2. Patients are paying more with high deductible plans. High deductible insurance policies are becoming more popular and people are unwittingly saddled with huge medical bills after surgery. Payors may approve surgery for these high deductible plans, but a huge portion of the bill falls on patients' shoulders and providers must have a plan to collect from them.

"When the payment comes in, patients might be on the hook for 30-50 percent of the payment," says Ms. Koelbl. "That's a lot of money when you are working on the spine. I have been suggesting that physicians and hospitals flag high-deductible and co-insurance plans that have caps up to $20,000 because they can be hurtful to the bottom line when you are working with spine. Have your access teams verify more than just eligibility; look at effective dates and deductible amounts, and discuss them with the patients."

Gathering this information beforehand will lead to better patient collections upfront and give physicians a better understanding of cost versus reimbursement before surgery.

"It's sad that the risk is being shifted to the patient and they have no idea that they have an enormous bill," says Kendra McKinley, president of Doctor's Billing, Inc., a medical billing and consulting company.

3. "Medical necessity" is being questioned. Spine surgeons are finding more denials based on medical necessity than in the past; insurance companies claim a procedure isn't a medical necessity because the patient doesn't fit into their criteria for coverage.

"Getting insurance companies to understand medical necessity as an individual assessment is a challenge," says Ms. McKinley. "Spine surgeons need case studies and outcomes data to explain why the surgery is still critical."

Figure out what the guidelines are for insurance companies and develop a relationship with the medical director, as well as other executives, at those companies to broaden coverage in unique cases.

Marcy Rogers on spine surgery coverage"What we are seeing now more and more is payors starting to reevaluate their policies on what they will and will not cover in spine," says Marcy Rogers, president and CEO of SpineMark, a developer of spine centers of excellence and spine research organizations. "Five to 10 years ago, there wasn't a single payor that had coverage rules about spinal fusions. Now, they all have strict guidelines."

Each payor has its own guidelines and spine surgeons must be familiar with the guidelines for each patient they cover; otherwise, surgery may be denied and they will have to go through the appeals process.

"It's really important to get the patients involved in the appeals process because at the end of the day, insurance companies respond more rapidly to patients being upset about their care than the physicians," says Ms. McKinley. "Be available to do the peer-to-peer reviews and don't take 'no' for an answer."

Form a relationship with insurance companies in your marketplace to position yourself for partnerships in the future. "Facilities and physicians have to maintain a regular scheduled payor education program and meet with payors voluntarily on a monthly basis to educate them on credentialing," says Ms. Rogers. "Show payors what is new about your practice and what separates you from other organizations. The key going forward will be to overcome the hammer spine surgery is facing with the perception of over-utilization."

4. RAC audits are recouping reimbursement on some cases. Medicare officials are now reevaluating old cases and retrospectively recouping reimbursement for surgery without the proper documentation of conservative care. Even though these procedures were performed and reimbursed in the past, CMS is looking for the documentation based on current standards.

"This is a really scary area because RAC auditors have gone through one or two years of cases and asked for recoupment on spine surgeries where documentation doesn't support their definition of medical necessity," says Ms. Koelbl. "You can try to combat them with physician queries. Make sure your teams have a comprehensive list of non-leading physician queries and use those during charge capture and billing as well as during retroactive denials or recoupment."

RAC auditors may or may not accept these queries, but at least you have the documentation available. This comes in handy because sometimes the patient documentation on conservative care wasn't sent to the surgeons in the first place.

"The worst part of the whole thing is they are sending the patient a note that their surgery wasn't medically necessary," says Ms. McKinley. "This is scary for the patient. I find the increased oversight frightening."

5. Secondary procedures get a zero. Commercial insurance companies often contract to reimburse spine surgeries with primary codes paid at 100 percent and secondary and tertiary procedures at 50 percent of the fee schedule rates. However, with new edits, some insurance companies bundle services and take a zero on the secondary procedure. This can be devastating for spine surgeons and practices.

"They set billing edits to bundle secondary procedures, so these managed care and commercial payors are using edits that contradict their contracts," says Ms. Koelbl. "Those secondary procedures are getting a zero because of the edits. It's something that's happening a lot. Providers have been told to appeal these cases and provide the contract language, but you have to develop a relationship with payors to really solve the problem."

Leverage this relationship with payors to get the edits removed because if you don't, you stand to lose a sizable amount of revenue.

"Insurance companies sometimes change their edits and it doesn't come up with the providers until they get a denial," says Ms. McKinley. "They reduce procedure codes with mass payment. They are reducing procedure codes that are exempt from the reductions. Having the specific contract language in the contract is so important. Spine surgery can be scheduled so far in advance that something could go out of coverage and providers aren't even aware."

Stay updated on payor contracts and coverage guidelines; otherwise you may find a previously covered service no longer covered when the denial comes.

"It's imperative that physicians and practices understand what their existing contracts say, their clauses and nuances," says Ms. Rogers. "They need to be on top of this and manage their contracts to understand what the implications are for their reimbursement. Look at each contract carefully and monitor every time a check or EOB comes in to make sure they match the negotiations."

6. Missing authorization code. One of the most common errors on spine claims is the lack of appropriate authorization code. The claims must include the physician and hospital authorization code.

"If the payors don't see that code on the bill, they will deny it," says Ms. Koelbl. "In one situation, we found over 100 authorized surgeries that didn't have a code on the UBO4 form, and the payor denied it for no authorization even though they had it. Providers have to keep the QA measures in line because they cannot lose $500,000 on an administrative error."

The insurance companies have a different authorization number for the hospital and the physician, and both must be on the claim. For outpatient surgery, the ASC's business office must be especially diligent about including this code.

"When the business office calls the insurance company for an outpatient spine surgery authorization code, the insurance company might say outpatient procedures don't need authorization, but spine surgery always needs an authorization," says Ms. McKinley.

7. Lower reimbursement rates.
Insurance companies are offering lower rates than in the past for spinal procedures, which means surgeons must come to payor negotiations armed with more than just clinical documentation; they must also bring redacted payor data to show a rate increase is reasonable in their market.

"Present redacted payor data from other payors to compare their rates with other payors for high volume procedures," says Ms. Koelbl. "If you are having coverage problems with a major player, show outcomes data along with other payor rates to help bring them on board."

Figure out where you can use positive reimbursement trends to correct negative ones. Physicians have assumed the responsibility for proving their case, and payors respond best to data.

8. ACOs and bundled payments.
New payment models are appearing in several marketplaces, and spine surgeons must be prepared to take more risk in their clinical decision making.

"Physicians need to keep cost and revenue information so they can negotiate the appropriate rates," says Ms. Koelbl. "They don't want to negotiate rates that are too low. Accountable care organizations and bundled payments are coming, and surgeons need to make sure they are administratively sound."

More Articles on Spine Surgery:

5 Achievable Goals for Spine Practice Operational Success

5 Observations on Spine Surgery Heading to Outpatient Procedures

6 Top Advocacy Issues for North American Spine Society


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