US Reimbursement Guide

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The information with this notice is general reimbursement information only. It is not legal advice, nor is it about how to code, complete or submit any particular claim for payment. Although we supply this information to the best of our current knowledge, it is always the provider’s responsibility to determine and submit appropriate codes, charges, modifiers, and bills for services rendered. The coding and reimbursement information is subject to change without notice. Payers or their local branches may have their own coding and reimbursement requirements and policies. Before filing any claims, provider should verify current requirements and policies with their payer. CPT is a trademark of the American Medical Association. Current Procedural Terminology (CPT) is copyright 2014 American Medical Association.

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VISIONAIRE Patient Matched Cutting Blocks

VISIONAIRE patient matched cutting blocks use the patient’s MRI and X-Ray to determine accurate alignment cuts and implant placement for each patient. However, the surgeon’s input on each patient is critical. The surgeon has the ability to make adjustments as he/she sees fit to address the patient’s specific anatomy, making this process not only patient specific, but surgeon specific as well.

Disposable, patient specific, single use distal femoral and proximal tibial cutting blocks; based off the mechanical axis. Can be used with LEGION™, GENESIS™ II and JOURNEY™ BCS Knee Systems.

Coding

Reimbursement coding refers to coding classification

systems and medical nomenclature. Several coding

systems exist with various levels of detail and for

various purposes. The health care industry (including

providers and insurers) uses coding to indicate the

patient’s condition (diagnosis) and the treatment of the

patient for that diagnosis (procedures). The patient’s

diagnosis and procedures performed during the hospital

stay are described using ICD-9 codes, which must be

supported by documentation in the patient record. The

ICD-9 code is a significant factor in determining

the hospital’s reimbursement, as further described

under “Payment System.”

Payment System

In the hospital [inpatient] environment, the selected ICD-9 diagnosis and procedure codes are converted into a MS-DRG payment code.

In the case of Total Joint replacement in the hospital setting often defines assignment of a particular MS-DRG payment code. For example, MS-DRG codes 461, 462, 469 or 470 stipulate that a major joint procedure (ICD-9 code 81.54) was performed. There usually is no additional payment for treatment in the hospital setting outside of the MS-DRG payment.

Provider Purpose Coding Payment system

Acute care short term hospital

Payment for services provided to an inpatient

MS-DRG The Medicare Severity Diagnosis-Related Group (MS-DRG) code set classifies a patient into a DRG group based on the average resources used to treat patients in that DRG.

Payment for services provided to an outpatient

APC / ASC Ambulatory Payment Classification (APC) is a code set to describe facility outpatient services delivered to a Medicare outpatient. Payment rate is established for each APC code. Depending on the services provided, hospitals may bill for more than one APC per patient visit.

Home care facility Payment for patient stay in a home care setting

Case-Mix

Groups CMG based payment rate includes all nursing and therapy services, medical supplies, aide and medical social services. Durable Medical Equipment is excluded. The payment rate is based on case-mix adjustment, outlier payment, etc.

Skilled nursing facility Payment for patient stay in a skilled nursing facility

RUG Per diem rate covers all costs and is based on case-mix classification system (RUG III).

Physicians (inpatient,

outpatients) Payment for services provided by physician

CPT Current Procedural Terminology (CPT) is a numeric coding system of services and procedures furnished by physicians and other health care professionals and published by American Medical Association. Non-physician

providers (outpatient) Payment for services provided by a non-physician to an outpatient

HCPCS

Level II HCPCS Level II is an alpha-numeric coding system for products, supplies, and services used outside of physician offices. HCPCS II codes are often product related. Payment for durable medical equipment (DME) is equal to 80% of the lesser of either actual charge for the item or the fee schedule amount. DMEPOS fee schedule is based on HCPCS Level II codes.

For coding, payment, coverage and sample letters, please visit the Reimbursement Website at

www.smith-nephew.com/reimbursement. Or you can contact us directly at [email protected] or 1-888-711-9903.

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Knee Replacement

2014 Medicare Coding, Coverage and Payment Reference Sheet

Visit the site at www.smith-nephew.com/reimbursement to obtain specific geographic payment information.

Current Procedural Terminology (CPT) is copyright 2014 American Medical Association. All Rights Reserved. No fee schedules, basic units, relative values, or related listings are included in CPT. The AMA assumes no liability for the data contained herein.

Common Physician Coding

CPT codes are used by hospital outpatient departments, ambulatory surgery centers, and physicians to describe professional services and procedures. Based on CY2014 Medicare Physician Fee Schedule national payment rates are as follows:

CPT Code Description Payment

20985 Computer-assisted surgical navigational procedure for musculoskeletal procedures, image-less (List separately in addition to code for primary procedure) resurfacing (total knee arthroplasty)

$151 27447 Arthroplasty, knee, condyle and plateau; medial AND lateral compartments with or without patella

resurfacing (total knee arthroplasty) $1,394

Common Inpatient Coding

International Classification of Diseases, Clinical Modification (ICD-9-CM) Procedure codes indicate the surgical and/or diagnostic procedures performed on the patient. Hospital outpatient/inpatient claims must report the appropriate ICD-9-CM procedure codes. The ICD-9-CM procedure code that may apply to patients undergoing the Knee Replacement procedure is:

ICD9 Description DRG Cross Reference

00.34 Imageless Computer Assisted Surgery N/A

81.54 Total Knee Replacement 461, 462, 469, 470

Diagnosis-related groups (DRG) are used to reimburse hospitals for inpatient stays. Each inpatient stay is assigned a DRG that is determined according to the principal diagnosis, major procedures, discharge status, and complicating secondary diagnoses. Each DRG is assigned a flat payment rate, which is adjusted according to the individual hospital’s teaching status, disproportionate share services for treating low-income patients, and location in urban versus rural regions, etc. Note that DRGs do not include payment for physician services, which are coded and reimbursed separately.

There are three levels of severity in most DRG categories:

1. MCC—Major Complication/Comorbidity, which reflect the highest level of severity; 2. CC—Complication/Comorbidity, which is the next level of severity; and

3. Non-CC—Non-Complication/Comorbidity, which do not significantly affect severity of illness and resource use. Based on CY2014 Medicare DRG national payment rates are as follows:

ICD9 Description DRG Cross Reference

461 Bilateral or multiple major joint procs of lower extremity w mcc $26,988 462 Bilateral or multiple major joint procs of lower extremity w/o mcc $18,898 469 Major joint replacement or reattachment of lower extremity w mcc $18,461 470 Major joint replacement or reattachment of lower extremity w/o mcc $11,526 Private Insurers

Private insurers cover hospital inpatient services that are considered medically necessary and within the benefit structure of the patient’s health insurance coverage. Payment for the Knee Replacement procedure may be based on a percentage of the billed or allowed charges, per diem, or on a negotiated payment rate. Check with your payer organizations to determine the payment methodology for the Knee Replacement procedure.

VISIONAIRE™ Instrumentation Reimbursement Guide

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Common Imaging Coding

CPT codes are used by hospital outpatient departments, ambulatory surgery centers, Independent Diagnostic Testing Facility (IDTF), and physicians to describe professional services and procedures. Based on CY2014 Medicare Imaging Fee Schedule national payment rates are as follows:

CPT Code Description IDTF & Physician Payment OPPS

73721 Magnetic resonance (e.g. proton) imaging, any joint of lower extremity; w/o

contrast material $256 $295

73721-26 Professional Component $70 N/A

73721-TC Technical Component $186 N/A

76376 3D rendering with interpretation and reporting of computed tomography, magnetic resonance imaging, ultrasound, or other tomographic modality with image postprocessing under current supervision; not requiring image post processing on an independent workstation

$29 Bundled

w/Base Procedure

76377 3D rendering with interpretation and reporting of computed tomography, magnetic resonance imaging, ultrasound, or other tomographic modality with image postprocessing under current supervision; requiring image post processing on an independent workstation

$84 Bundled

w/Base Procedure

Report codes 76376 and 76377 in addition to the base imaging procedure.

Modifier Descriptor

-26 Professional Component: Certain procedures are a combination of professional and technical components. -TC Technical Component: Certain procedures are a combination of professional and technical components.

When billing without a modifier, this means the services performed included both components.

Medicare reimbursement for diagnostic imaging procedures is comprised of a professional component, the amount paid for the physician’s interpretation and report, and a technical component, the amount paid for all other services (including staffing and equipment costs).

When combined and paid to the same individual or entity, this amount is often referred to as the total or global reimbursement. Cautionary Note: Many third-party payers require prior authorization before paying for a new procedure and will generally deny reimbursement if such approval is not received in advance.

For any additional questions or concerns, please call 1-888-711-9903.

1 The content contained in this communication is not intended or written to be used or to constitute any legal or regulatory advice or guidance. Please consult your payer or regulatory advisor with questions relating to this material or your specific situation related thereto.

2 For further information or questions regarding CMS’ National Coverage Determination, see generally http://www.cms.gov/DeterminationProcess/ or contact CMS.

3 See page 28, http://www.cms.gov/manuals/downloads/ncd103c1_Part4.pdf

4 Ibid.

Medicare MRI Disclaimer

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The Centers for Medicare & Medicaid Services (CMS) established a National Coverage Determination (NCD) for MRIs. The NCD outlines the parameters for coverage and non-coverage. Specifically, the NCD states that “MRI is considered medically efficacious” for a number of diagnostic uses and that the descriptions (in the NCD) should be used as general guidelines or examples of what may be considered covered rather than as a restrictive list of specific covered indications. It goes on to note that CMS has determined that “imaging of cortical bone and calcifications, and procedures involving spatial resolution of bone and calcifications, are not considered reasonable and necessary indications” and are therefore “non-covered.” MRIs performed prior to total joint replacement procedures for diagnostic purposes, however, may be considered medically necessary and billed using the CPT codes that accurately describe the imaging procedure furnished to the patient. These same images from the diagnostic MRI may, in turn, be further utilized for developing the personalized cutting or navigation guides that are used in orthopaedic procedures. However, if providers perform MRIs solely for the purpose of developing personalized cutting instruments or guides, providers should contact the payer for billing and coverage guidance and/or the American College of Radiology with billing questions.

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VISIONAIRE™ Instrumentation Reimbursement Guide

Checklist for Total Joint Procedures to assist with Medical Necessity

Documentation Requirements for CMS-Medicare Part A

Indications – choose one and see below __ Osteoarthritis (OA)

__ Avascular necrosis (osteonecrosis) tibial plateau/femoral condyle __ Nonunion/malunion articular fracture

__ Rheumatoid arthritis __ Bone tumor involving knee

Indication not listed (provide clinical justification below) Osteoarthritis

(OA) Required All other Indications Required

Description of Services

All At least 2 Obtain X-Ray or MRI to demonstrate at least 2 of the following: __ Subchondral cysts

__ Subchondral sclerosis __ Periarticular osteophytes __ Joint subluxation __ Joint space narrowing

All All Joint pain – Document in patient record and history and physical and include the following – Duration of pain, months, weeks, etc.:

__ Level of pain and worsening of pain __ Increased pain with activity

__ Pain interferes with activities of daily living __ Pain increases with weight-bearing __ Pain with passive range of motion __ Limited ROM

All All Findings at knee:

__ Pain with passive range of motion __ Limited ROM

__ Crepitus

__ Joint effusion/swelling

All At least 1 Trial of medication – usually at least 3 months:

__ Indicate whether NSAIDs (or other meds) were used for pain __ Duration of medical therapy

__ Or, if patient cannot tolerate pain medications, document contraindication to meds All At least 1 Physical therapy/support – at least 3 months:

__ Physical therapy – 12 weeks

__ External joint support (canes or braces) 12 weeks __ Document course and response to external joint/PT All All Risks and benefits of surgery:

__ Risks and benefits of surgery discussed

__ Note if patient has co-morbidities that may impact outcomes or increase risk and address these issues

All All Documentation requirements:

__ Confirm patient records include all necessary reports and documentation in progress notes __ Duplicate records to provide to hospital on or before patients admission to the hospital * Confirm with hospital regarding documentation needs. Local Medicare coverage/documentations vary. Contact Medicare Administrative Contractor if you have any questions regarding coverage or payment.

Sources:

https://www.highmarkmedicareservices.com/parta/pdf/newsletters/newsletters-a-0511.pdf

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Pre-Determination

A pre-determination of benefits is a written request for verification of benefits. Insurance Carriers review these requests based on policy provisions, and send an explanation of your potential benefits. You may request a predetermination before your medical procedure. This term is used for both pre-authorization and pre-certification. Internally, it is also used to denote prior approval of medical services to determine medical necessity or if a procedure is considered Experimental and Investigational (E & I) Similar processes: pre-authorization, pre-certification, prior authorization.

The information with this notice is general reimbursement information only. It is not legal advice, nor is it about how to code, complete or submit any particular claim for payment. Although we supply this information to the best of our current knowledge, it is always the provider’s responsibility to determine and submit appropriate codes, charges, modifiers, and bills for services rendered. The coding and reimbursement information is subject to change without notice. Payers or their local branches may have their own coding and reimbursement requirements and policies. Before filing any claims, provider should verify current requirements and policies with their payer. CPT is a trademark of the American Medical Association. Current Procedural Terminology (CPT) is copyright 2014 American Medical Association.

Step 1: Request a pre-determination or prior authorization for the services – The pre-determination/prior authorization of benefits process allows the medical provider, at the patient’s request, to send a letter to the Medicare/Group Health Plan with the proposed procedure and all the proper documentation to support the procedure. Within a few weeks, the Medicare/Group Health Plan will generally respond with a statement of coverage they will provide for that procedure. Check with your Medicare/Group Health Plan to determine if they have a predetermination form to submit with your request.

Step 2: If the predetermination or prior authorization is denied, your next step is to appeal the denial. The letter you receive from Medicare/Group Health Plan will let you know the reason for the denial, the appeal time frame and where to submit your appeal. Be sure to submit your appeal within the timeframe allowed.

Additional tips when appealing: Check on the state guidelines, employer contracts and payer policies for the amount of time the payer has to complete the predetermination of benefits and appeals. If the payer did not follow those guidelines, you may have the right to appeal to the state or an external review entity.

Prior Authorization

Prior Authorization means you must request pre-certification of, or pre-certify, certain care in order to receive maximum available benefits under the patients’ medical plan. For some types of care, you must precertify the care to receive any benefits at all. Pre-certification is the process by which healthcare companies review the proposed treatment and advises you and your doctor as to how benefits may be paid.

Pre-certification is a process still used by health insurance companies to control health care costs.

Appeals Process

The process you use if you disagree with any decision about healthcare services. If Medicare or Group Health Plan does not pay for an item or service you have provided, or if you are not given an item or service you think the patient should get, you can have the initial Medicare/Group Health Plan decision reviewed again. If the patient is in a Medicare managed care plan or has a Group Health Plan, you can file an appeal if the plan will not pay for, or does not allow or stops a service that you think should be covered or provided. The Medicare managed care plan or Group Health Plan must tell you in writing how to appeal. See patient membership plan materials or contact the plan for details about your appeal rights.

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Smith & Nephew, Inc.

7135 Goodlett Farms Parkway Cordova, TN 38016 USA Telephone: 1-901-396-2121 Information: 1-800-821-5700 Orders/inquiries: 1-800-238-7538 www.smith-nephew.com