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Implant and Supply Reimbursement Blunders Nearly Every ASC Commits

By October 4, 2016June 11th, 2019Revenue Cycle Management
Implant and Supply Reimbursement

Obtaining reimbursement for implants and supplies represents something akin to successfully navigating a minefield.  You know the lay of the land and presume the payors you hold insurance contracts with do too.  After all, you both possess the same road map – your ASC contract which clearly (ahem!) outlines the reimbursement you’ll receive.  However, when you receive a denial from the carrier for the billable implant or supply, you quickly recognize your interpretations of the contractual terms differ.

While there are distinct differences between an implant and a supply, these terms are often used interchangeably which can lead to significant confusion – even within your ASC.   So, let’s start with some definitions.

Medical supplies refer to the non-durable disposable materials necessary to perform or deliver a health care service in a single episode of care.  These supplies can also be referred to as consumable medical supplies.

Medical supplies:

  • are disposable in nature
  • cannot be used by more than one individual
  • are primarily and customarily used to serve a medical purpose
  • are generally not useful to a person in the absence of an illness or injury
  • are items such as gloves, gauze, dressings, needles, syringes, saline, surgical trays, bandages, skin preps, and other supplies needed during the course of a procedure
  • are typically inclusive to procedure reimbursement and are not separately payable

Most health insurance plans contain exclusions for consumable medical supplies.  Typically, you will not be reimbursed for these products because they are considered integral to the procedure itself.  They are an assumed cost of the surgery.

A medical implant on the other hand, is classified as a medical device manufactured to replace a missing biological structure, support a damaged biological structure, or enhance an existing biological structure. Examples of implants are pins, rods, screws, plates, surgical mesh, ocular lenses, prosthesis, etc.  Many payors define a medical implant as a device or item that remains in the body for six months or more.

Medical implants differ from medical transplants in that they are man-made devices.  Transplants are composed of biomedical tissue. Examples of transplants are allografts, autografts, tendons (musculoskeletal grafts), or corneas.

These differences in definitions may affect your ASC billing reimbursements.

As you know, implants and supplies are expensive and the cost can vary widely from vendor to vendor.  If your employees do not understand which category these items (i.e., implant or supply) fall into, your facility could leave a significant amount of money on the table.

How do you know if you should be billing for an implant or a supply? Start with understanding what each payor contract considers allowable. Most plans contain exclusions for consumable medical supplies although there are some cases where a supply is allowable. A temporary pain pump – a short term drug delivery system for post-operative pain relief – is a great example. 

The Healthcare Common Procedure Coding System (HCPCS) classifies a post-operative pain pump under the “medical and surgical supplies” category. However, because this “supply” delivers an enhancement above and beyond the normal scope of the standard procedure – it may be considered billable by some payors. To secure reimbursement, the item should be mentioned separately in the surgeon’s operative (op) report. 

The op report can also provide clues to other items used in a procedure that might be eligible for billing and reimbursement.  For example, some medications purchased by the facility, such as Botox which is used in occipital injections for migraine headaches, may be reimbursed separately from the procedure when billed properly.  Your coders should be looking for these items in op report narratives and billing for them when applicable.

In large part due to technological advances, implant intensive procedures which were historically confined to inpatient settings are now being allowed in the outpatient ASC setting.  This means outpatient facilities should know when and how to bill for them.  Implants are not cheap and, if left unbilled, could result in a significant amount of lost revenue to the facility.

To ensure you are billing appropriately for implants and supplies that are atypical to a standard procedure:

  1. Audit preference cards to identify supplies normally used in different types of procedures.
  2. Determine which supplies and implants used during a procedure could be viewed as atypical.
  3. Involve your materials management staff in the process – they have specific knowledge of items being ordered for your center. Research these items and assess if they might be billable.  If so, ensure the supply is added to the case implant log and inform your coding and billing team so the proper HCPCS code can be assigned and billed.
  4. If all goes well, you efforts will be rewarded with money in the bank!

To illustrate, let’s say your ASC used temporary pain pumps (a supply) 25 times in the first quarter of the year to provide non-narcotic post-operative pain relief to patients reducing their use of opioids during their recovery process.  The invoice cost of this supply, ordered in a pack of five, is $275 per pump.  If your contracts allow cost plus 10% reimbursement on implants and supplies, your reimbursement would be $302.50 per case.  If reimbursement was allowed on every case, your facility would receive $7,562.50 in reimbursement for those temporary pain pumps alone!

Is this a time consuming project? Yes. However, the rewards far outweigh the initial time investment.  Make sure your ASC is getting the money it deserves for its procedures. Your hard work will pay off in the end.

By Carol Ciluffo – Vice President of Revenue Cycle Management


Author pinnacleiii

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