KYPHON. Reimbursement Guide. Physician Reimbursement. Balloon Kyphoplasty Procedure. ICD-9-CM Diagnosis Codes. CPT Codes and Payment

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1 KYPHON Balloon Kyphoplasty Procedure Reimbursement Guide ICD-9-CM Diagnosis Codes Providers should report the ICD-9-CM diagnosis code that most accurately describes the patient s condition. Please refer to the payer s policy for ICD-9-CM diagnosis codes that support medical necessity in your region. Multiple diagnosis codes may be necessary. Most Medicare contractors have established Local Coverage Determinations (LCDs) which list medical indications of coverage and ICD-9-CM diagnosis codes that support medical necessity for KYPHON Balloon Kyphoplasty procedures. The LCDs are available on the Centers for Medicare and Medicaid Services (CMS) website at coverage/determinationprocess/lcds.html. The following diagnosis codes may apply to patients undergoing balloon kyphoplasty: Aside from osteoporosis, pathological fracture treated with KYPHON Balloon Kyphoplasty also may be due to other underlying conditions including multiple myeloma, metastatic lesions, and benign lesions. Examples of diagnosis codes for these conditions include: Code Description Secondary malignant neoplasm of bone 203.0X Multiple myeloma 228.0X Hemangioma Neoplasm of uncertain behavior of bone Code Description Pathologic fracture of vertebrae 733.XX Osteoporosis Physician Reimbursement Effective January 1, 2015, the former vertebral augmentation CPT codes were deleted and a new series of CPT codes has replaced them. While the new descriptions remain similar, image guidance is now included in codes and not billed separately. CPT Codes and Payment CPT Description Total RVUs Facility CY15 Total RVUs Non-facility CY Percutaneous vertebral augmentation, including cavity creation (fracture reduction and bone biopsy included when performed) $ $7, using mechanical device (eg, kyphoplasty), 1 vertebral body, unilateral or bilateral cannulation, inclusive of all imaging guidance; thoracic 22514» lumbar $ $7, » each additional thoracic or lumbar vertebral body 6.05 $ $4, *Source: CY2015 Medicare Physician Fee Schedule, Final Rule. Federal Register, November 13, No geographic adjustments.

2 2 KYPHON Balloon Kyphoplasty Procedure REIMBURSEMENT GUIDE Physician Reimbursement continued Balloon Kyphoplasty in the Non-facility Setting Beginning with the CY 2012 Medicare Physician Fee Schedule, CMS received and granted a request to create non-facility (e.g., physician office setting) Practice Expense (PE) RVUs for the percutaneous vertebral augmentation. This allows percutaneous vertebral augmentation to be performed in the physician office setting, consistent with percutaneous vertebroplasty which has been allowed in the non-facility setting since RVUs and payment are different in the non-facility setting versus the facility setting. For non-facility settings, payment is higher to the physician to account for the additional direct and indirect costs incurred by the practice when rendering the service in that setting. Non-facility expenses may include the cost of the physician s practice overhead, including rent, staff salaries and benefits, medical equipment and supplies. In the facility, these direct and indirect costs are absorbed by the facility and thus are reflected in the payment to the facility (e.g., hospital, ASC). Facility Reimbursement Hospital Inpatient Medicare uses the Medicare Severity-DRG (MS-DRG) payment methodology to reimburse hospitals for inpatient services. Each inpatient stay is assigned to one payment group, based on the ICD-9-CM codes assigned to the major diagnoses and procedures. Each DRG group has a flat payment rate which bundles the reimbursement for all services and devices the patient received during the inpatient stay. Other payers may also use DRGs or a variation on them, but many payers pay the hospital on a contractual basis (i.e., case rate or per diem rate) that has been negotiated between the hospital and the payer. ICD-9-CM Procedure Codes Code Description Percutaneous vertebral augmentation Possible Medicare-Severity Diagnosis-Related Groups (MS-DRG): FY $18,931 MS-DRG Description Relative Weight* 515 Other musculoskeletal system and connective tissue O.R. procedure with major complication or comorbidity (MCC) 516 Other musculoskeletal system and connective tissue O.R. procedure with complication and/or comorbidity (CC) 517 Other musculoskeletal system and connective tissue O.R. procedures without CC/MCC Source: FY2015 Medicare Hospital Inpatient Prospective Payment System, Final Rule. Federal Register, August 22, Assumes payment for a hospital with a wage index and geographic adjustment factor of CC-Complications and/ or comorbidities, MCC-Major complications and/or comorbidities $12, $10,131

3 KYPHON Balloon Kyphoplasty Procedure REIMBURSEMENT GUIDE 3 Facility Reimbursement continued Hospital Inpatient When a vertebral biopsy is performed with a percutaneous vertebral augmentation procedure in the hospital inpatient setting, the hospital should assign code (biopsy of bone, other) in addition to the code for the procedure (AHA Coding Clinic for ICD-9-CM, 3rd Quarter, November 3, 2006). When the biopsy code is present, the DRG assignment for the case is modified to the following possible MS-DRGs: MS-DRG Description Relative Weight* FY Biopsies of musculoskeletal and connective tissue with MCC $18, Biopsies of musculoskeletal and connective tissue with CC $13, Biopsies of musculoskeletal and connective tissue without CC/MCC $10,167 *Source: FY2015 Medicare Hospital Inpatient Prospective Payment System, Final Rule. Federal Register, August 22, Assumes payment for a hospital with a wage index and geographic adjustment factor of CC-Complications and/ or comorbidities, MCC-Major complications and/or comorbidities. Under the MS-DRG system, cases may be assigned to a number of other MS-DRGs, based on individual patient diagnosis and presence or absence of additional surgical procedures performed. Additional MS-DRGs include but are not limited to: MS-DRGs 907, 908, 909; MS-DRGs 957, 958, 959; and MS-DRGs 981, 982, 983. Hospital Outpatient Hospitals use CPT and Healthcare Common Procedure Coding System (HCPCS) codes to report outpatient services. Under Medicare's methodology for hospital outpatient payment, each code representing a significant service is assigned to one Ambulatory Payment Classification (APC) with a fixed payment. Although some services are bundled and not separately payable, total payment to the hospital is the sum of the APC amounts for the services provided during the outpatient encounter. Many payers use Medicare s APC methodology or a similar type of fee schedule to reimburse hospitals for outpatient services. Other payers use a percentage of charges mechanism, depending on their contract with the hospital. Beginning January 1, 2014 Medicare implemented a new policy that packages most add-on codes into the primary procedure for hospital outpatient claims. This means that most procedures represented by add-on codes are no longer paid separately, but in most cases the payment rates for the primary procedures have increased. For balloon kyphoplasty, add-on code 22515, representing each additional level, is now packaged into payment for the first level procedure and no longer receives a separate APC payment. However, it is very important for hospitals to continue reporting all performed units of so that Medicare has accurate frequency and cost data to maintain appropriate reimbursement in the future. CPT Codes and Payment CPT Description APC Status Indicator CY Percutaneous vertebral augmentation, including cavity creation 0052 T $6, (fracture reduction and bone biopsy included when performed) using mechanical device, 1 vertebral body, unilateral or bilateral cannulation (e.g., kyphoplasty); thoracic 22514» lumbar 0052 T $6, » each additional thoracic or lumbar vertebral body N/A N Packaged *Source: CY2015 Medicare Outpatient Prospective Payment and Ambulatory Surgery Center Payment Systems, Final Rule. Federal Register, November 10, 2014.

4 4 KYPHON Balloon Kyphoplasty Procedure REIMBURSEMENT GUIDE Facility Reimbursement continued CPT Codes and Payment continued Status Indicators Each code in the Hospital Outpatient Prospective Payment System (OPPS) is assigned a status indicator to signify certain APC payment rules. The following status indicators are represented in these procedures: N Items and Services Packaged into APC Rates, no separate payment T Significant Procedure, Multiple Procedure Reduction Applies If a claim includes more than one code with a status indicator of T, full payment will be made for the highest paying procedure. The other services/procedures with a T status indicator will be discounted and paid at 50% of the amount allowed by Medicare. Ambulatory Surgery Centers Ambulatory Surgery Centers (ASCs) use CPT and HCPCS codes to report their services. Medicare's payment methodology is based on the hospital outpatient APCs, but using payments unique to ASCs. Certain ancillary services, such as imaging, are covered when integral to covered surgical procedures but may not be separately payable. As in the hospital outpatient setting, the additional level add-on code is packaged into payment for the first level as of January 1, Many payers use a similar type of fee schedule to reimburse ASCs, while other payers use alternate mechanisms depending on their contracts with the ASC. CPT Description Status Indicator CY Percutaneous vertebral augmentation, including cavity creation (fracture G2 $3, reduction and bone biopsy included when performed) using mechanical device (eg kyphoplasty), 1 vertebral body, unilateral or bilateral cannulation, inclusive of all imaging guidance; thoracic 22514» lumbar G2 $3, » each additional thoracic or lumbar vertebral body N1 Packaged Source: CY2015 Medicare Outpatient Prospective Payment and Ambulatory Surgery Center Payment Systems, Final Rule. Federal Register, November 10, Payment Indicators Each code in the ASC Payment System is assigned a payment indicator to signify certain payment rules. The following status indicators are represented in these procedures: G2 Non office-based surgical procedure added in CY 2008 or later; payment based on OPPS relative payment weight. N1 Packaged service/item; no separate payment made.

5 KYPHON Balloon Kyphoplasty Procedure REIMBURSEMENT GUIDE 5 Medical Necessity Prior Authorization Assistance with a prior authorization or denial may be available from Medtronic for patients whose medical needs are consistent with FDA approved/cleared indications or are otherwise in accordance with payer policies.* Prior authorization requests for balloon kyphoplasty may require the following items:» Progress notes» X-ray and/or MRI reports» Medicare or other coverage policies» Clinical literature (available from Medtronic upon request or at *Contact Medtronic s Therapy Access Solutions at (866) for assistance. Site of Service Medical necessity will dictate site of service for each individual patient. Physicians should confirm inpatient or outpatient admission criteria before selecting site of service. Documentation» Medical record documentation is key to communicating essential information for making a decision as to whether a procedure was reasonable and necessary for a particular patient.» At minimum, the medical record should convey information about a patient s medical condition, the rationale for why balloon kyphoplasty was needed, and the outcome of the procedure.» Medical record documentation should include a detailed history and physical, which enables billing personnel to verify that a claim is coded specifically and accurately. For example, some payers require documentation that conservative care has been tried and has failed.» See payer policy for specific documentation and clinical coverage criteria.

6 6 KYPHON Balloon Kyphoplasty Procedure REIMBURSEMENT GUIDE Notes

7 Medtronic Spinal and Biologics Business Worldwide Headquarters 2600 Sofamor Danek Drive Memphis, TN Pyramid Place Memphis, TN (901) (800) Customer Service: (800) For more information visit For additional reimbursement information contact the SpineLine Coding and Reimbursement Support Line at (877) The materials and information cited here are for informational purposes only and are provided to assist in obtaining coverage and reimbursement for health care services. However, there can be no guarantee or assurances that it will not become outdated, without the notice of Medtronic, Inc., or that government or other payers may not differ with the guidance contained here. The responsibility for coding correctly lies with the healthcare provider ultimately, and we urge you to consult with your coding advisors and payers to resolve any billing questions that you may have. All products should be used according to their labeling. CPT 2014 American Medical Association (AMA). All Rights Reserved. CPT is a trademark of the AMA. Fee schedules, relative value units, conversion factors and/or related components are not assigned by the AMA, are not part of CPT, and the AMA is not recommending their use. The AMA does not directly or indirectly practice medicine or dispense medical services. The AMA assumes no liability for data contained or not contained herein. Applicable FARS/DFARS Restrictions Apply to Government Use. The complication rate with KYPHON Balloon Kyphoplasty has been demonstrated to be low. As with all surgical procedures, there are risks associated with the procedure, including serious complications, and though rare, some of which may be fatal. For complete information regarding indications for use, contraindications, warnings, precautions, adverse events, and methods of use, please reference the devices Instructions for Use included with the product Medtronic Spine LLC. All Rights Reserved. PMD /120214

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