The Centers for Medicare and Medicaid Services (CMS, formerly the Health Care Financing Administration) recently issued instructions to its Medicare carriers that clarify Medicare payment policy for preoperative medical evaluations obtained outside the Medicare global surgical period (view the instructions online at http://www.cms.hhs.gov/transmittals/downloads/R1707B3.pdf). The new instructions may have an impact on how you code and bill for preoperative medical evaluations you perform at the request of surgeons. Here’s what you need to know.

The issue

Before CMS issued its instructions, some Medicare carriers were denying most preoperative medical evaluations, both examinations and diagnostic tests, on the grounds that they were “routine physical checkups” and thus excluded from Medicare coverage by law. Even carriers who did not deny payment on this basis had conflicting policies about which ICD-9 codes should be used for these claims. Some required physicians to use one of the V codes for preoperative evaluations, some required the codes for the reason for surgery, and still others accepted only codes for comorbid conditions (e.g., hypertension) that necessitated a physician evaluation.

The instructions

The new instructions from CMS are very explicit. Medical preoperative examinations and diagnostic tests done by, or at the request of, the attending surgeon will be paid by Medicare, assuming, of course, that the carrier determines the services to be “medically necessary.” All such claims must be accompanied by the appropriate ICD-9 code for preoperative examination (i.e., V72.81–V72.84). Additionally, you must document on the claim the appropriate ICD-9 code for the condition that prompted surgery. If there are other diagnoses and conditions affecting the patient, you should also document those on the claim.

The implications

The new instructions mean that Medicare carriers cannot automatically deny any claim for preoperative services on the basis that it is a routine physical checkup and thus legally excluded from Medicare coverage. Medicare carriers must change their processes so that claims with ICD-9 codes V72.81–V72.84 are neither automatically denied nor marked for manual review.

The instructions also mean that you need to be very deliberate in how you code your claims to Medicare for such services. For example, let’s say an ophthalmologist requests a preoperative clearance from you for a patient who has diabetes and hypertension and is scheduled for cataract surgery. You perform an evaluation and management service and issue a report to the ophthalmologist clearing the patient for surgery. When you bill Medicare for this consultation, the primary diagnosis on the claim, and the one attached to the consultation code on the line item, will be a V code (e.g., V72.83, “Other specified preoperative examination”). The secondary diagnosis will be the reason for the surgery, the cataract (e.g., 366.13, “Anterior subcapsular polar senile cataract”). Finally, if appropriate, you would also code the patient’s diabetes (e.g., 250.01, controlled, type 1 diabetes, without mention of complication) and hypertension (e.g., 401.1, “Essential hypertension, benign”).

Because CMS made the effective date of the instructions Jan. 1, 2001, you can ask your carrier to review any denied claims for preoperative evaluations provided on or since that date. The new instructions are not a guarantee that all of your claims for preoperative services will be paid. However, they are a guarantee that your carrier cannot deny these claims as “routine” care and must pay them if they meet coverage policy.