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  Billing and coding in cytopathology:
  Deciphering the alphanumeric soup

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cap today

June 2005
PAP/NGC Programs Review

Susan Spires, MD
Dina R. Mody, MD

To ameliorate perceived inequities in reimbursement across specialties, Medicare in 1992 implemented a standardized physician payment schedule based on the resource costs incurred in providing professional services. The resource-based relative value scale, or RBRVS, determines payments for services based on physician work and the costs associated with providing the services. The total relative value units (RVUs) assigned to each CPT code are based on three components: physician work, physician practice expense (PE), and the professional liability (PLI) cost for that code. Each component is allocated RVUs and is adjusted by a geographic practice cost index (GPCI) to account for many regional differences in costs. Total payment for a service is calculated by multiplying the total RVUs by the annually adjusted conversion factor (CF). The conversion factor is derived through Centers for Medicare and Medicaid Services computations using the sustainable growth rate, which is heavily weighted by the Medicare economic index, which poorly reflects the deleterious effects of physician costs and inflation on payment. This system allows all physician services to be linked on a common scale through a single equation for each CPT code:

Payment = CF x [(RVUwork xGPCI ) + (RVUpe x GPCI ) + (RVUpli x GPCI)]

For example, the global 88108 paid in Alabama would be:

88108 = $37.90 x [(.56 x 1.00) + (1.21 x 0.858) + (0.04 x 0.752)] = $61.71

On average the physician work component accounts for 55 percent of the total relative value for each service. Initially, physician work RVUs were based on the original Hsiao studies (also known as the Harvard-based relative values studies). Annual updates to the physician work component are now based on recommendations by the AMA/Specialty Society RVS Update Committee. Established in 1991, the committee provides recommendations to the CMS, which generally accepts the input. (Currently about 95 percent of RVS Update Committee recommendations are unchanged in the final rule for payment each year.)

The primary vehicle for establishing new work values is through RVS Update Committee surveys, instruments designed to capture in relative value unit form the physician work it takes to perform the service. All physician services are surveyed using the same basic template that gathers data for the following: technical skill with respect to knowledge, training, and experience; required mental effort and judgment; physical effort; and psychological stress due to the potential risk to the patient. The survey provides a way to compare these aspects of physician work to the work of an established code on the physician fee schedule.

The AMA does not administer the surveys. Rather, they are administered by individual medical societies. The CAP as a founding member of the RVS Update Committee participated in initial studies and remains the leading organization for pathology RVS Update Committee data collection, a voluminous task that is made possible only through the participation of CAP membership. The CAP also provides recommendations on the practice expense portion of the RVS Update Committee process, through the work of the committee’s workgroup of the CAP Economic Affairs Committee. Practice expense inputs include clinical staff time, medical supplies, and equipment.

CPT codes that describe laboratory nonphysician services are not valued as a part of the Update Committee process. Instead, the CMS places them on the clinical laboratory fee schedule. These payment values, unlike those for physician services, are not formed through a consensus process. The CMS statutorily mandates payment as a percentage of payment from past fee schedules. Unlike Pap test interpretation, which is a physician service, Pap test screening is paid under the clinical laboratory fee schedule. However, the CMS holds annual hearings to receive input from organized medicine, the laboratory industry, and manufacturers to determine pricing. In general, the CMS’ pricing tends to reflect consensus opinions presented in these hearings, with carrier medical directors having significant input.

Current Procedural Terminology

CPT is a listing of descriptive terms and identifying codes for reporting medical services and procedures that physicians perform for payment. CPT is the intellectual property of the AMA and is copyright protected. Medicare recognizes it, and other third-party payers including Medicaid use the bulk of the codes as such or in a modified fashion. The purpose of the terminology is to provide a uniform language that accurately describes medical, surgical, and diagnostic services and which thereby provides an effective, reliable way for physicians, patients, and third-party payers across the country to communicate.

Tables 1 and 2 list the category 1 cytology codes from CPT 2005, which is the most recent revision of that which first appeared in 1966. CPT descriptive terms and identifying codes now serve a variety of important functions in the field of medical procedural nomenclature. CPT category 1 codes are updated annually through the deliberations of the AMA CPT editorial panel, which is ultimately responsible for the integrity of the codes. This process uses CPT advisors from many medical specialty societies as well as input from the Pathology Coding Caucus, a group that the CAP staffs and chairs and that allows laboratory-based CPT advisors and nonphysician laboratory groups to work together to optimize the laboratory sections of the code set.
For pathology, the use of CPT modifiers is essential for Medicare billing and for some other payers in certain situations. The majority of codes can be separated into professional and technical components. For those laboratories in which the component services are separately billed to Medicare, modifier –26 may be appended to the professional component and modifier –TC to the technical component. Additionally, Medicare in certain defined situations will not pay for a particular service when another service is performed on the same patient on the same day by the same provider. The national correct coding initiative was created to provide a coding edit set that addresses these situations. Mutually exclusive and comprehensive edits eliminate payment on secondary codes identified in coding initiative lists unless the code is billed with a modifier –59 as allowable. This modifier should not be used indiscriminately to bypass edits but to indicate that the procedure performed on the same patient on the same day was on a separately identifiable specimen from a distinct, separate procedure. For quarterly updates on these edits, see the CMS Web site at www.cms.hhs.gov/physicians/cciedits for downloadable lists.

Healthcare Common Procedural Coding System

HCPCS level 2 codes are analogous to CPT codes. Level 2 codes are used to document coding for certain mandated screening benefits, which may have frequency limitations. These include Pap tests and, more recently, diabetes and cholesterol screening. These are alphanumeric codes that are five units long. For screening Paps, conventional, use the P30xx series, and for liquid-based and automated Paps, use G01xx series. See Table 2.

International Classification of Diseases, 9th revision, Clinical Modification

ICD-9 CM is based on the official version of the World Health Organization’s International classification of diseases. ICD-9 classifies morbidity and mortality information for statistical purposes and for indexing of hospital records by disease and operations, as well as for data storage and retrieval. Since the passage of the Medicare Catastrophic Coverage Act of 1988, the law has required physicians to submit diagnosis code(s) for Medicare reimbursements. To document medical necessity, this act requires physician offices to include the appropriate diagnosis codes when billing for services provided to Medicare beneficiaries on or after April 1, 1989. The CMS has designated ICD-9 as the coding system physicians must use.

It is important to assign the correct and most specific ICD-9 code because this documents the procedure’s medical necessity. For pathology the proper ICD-9 code may be based on the results of the interpretation the pathologist performed. If the results were normal and the test was not for screening, use the physician’s submitted code. For example, if urine is submitted for hematuria (599.7) and the finding is urothelial carcinoma, submit diagnosis code 188.9 (malignant neoplasm of bladder, part unspecified). If negative, use the submitting code, 599.7.

ICD codes are also required as documentation of necessity for screening tests, including the Pap test which is covered every two years for average-risk patients and every year for high-risk patients. At present, while a number of codes govern documentation for the clinical comprehensive exam and pelvic exam and ensure clinician payment, only four are considered acceptable documentation for payment to laboratories for screening Paps. These are V76.2 (routine cervical Pap smear, intact cervix), V76.47 (routine vaginal Pap-status post hysterectomy for nonmalignant condition), V76.49 (Pap smear, other site NOS—can also use for patients without cervix), and V15.89 (other specified personal history representing hazards to health—use for high-risk Paps).

As of 2005, ICD-9 codes for biopsy diagnosis of dysplasia are separate from those for cytologic diagnosis for dysplasia. In addition, changes in individual assignation for codes have been made—for example, unsatisfactory Pap is no longer 795.09 but now is 795.08. These new and revised codes are in Table 3.

The ICD-9 codes must be coded to the highest degree of specificity. For example 622.1 dysplasia of cervix has been subdivided into 622.10 unspecified, 622.11 mild dysplasia, and 622.12 moderate dysplasia.

The commonly used ICD-9 codes for cervicovaginal cytology are listed in Table 3.

Coding rules

Screening Paps must be distinguished from diagnostic Paps because this distinction will determine whether to use CPT or HCPCS codes for Medicare. For diagnostic (medical) Medicare Paps and for most other third-party payer Pap tests, CPT codes are used exclusively. The designation of a Pap as diagnostic is based on information the referring physician provides. This may be in the form of ICD-9 codes, signs and symptoms, or a written narrative. These include the following: (1) prior or current cancer of cervix, uterus, or vagina; (2) previous abnormal Pap smear; (3) abnormal findings in lower abdomen or gynecologic tract; (4) complaint referable to female genital tract; and (5) any sign or symptom that the clinician deems to be related to a gynecologic disorder. Diagnostic Paps are not limited by frequency and are payable as submitted with information that documents medical necessity. In the absence of such information, it may be necessary to contact the clinician’s office. Use of archival laboratory results on a patient is not acceptable in lieu of this information.

For screening Medicare Paps, HCPCS codes are used (Table 2). A screening or routine Pap is that which is performed in the absence of signs and symptoms and is payable only when billed with certain ICD-9 codes. (See ICD section and Table 3.) These should be billed for payment with HCPCS codes. This includes the professional interpretation (for example, P3001 for conventional, G0124 for liquid-based). Confusion may arise over ICD-9 coding when a screening Pap has findings that prompt pathologist review. The correct protocol is to document the reason for the Pap—that is, screening as the first ICD code (for example, V76.2) with the interpretive findings (for example, 795.03 LGSIL) as the second code. The followup Pap will then be a diagnostic Pap billed with 795.03 as the primary ICD-9 and will not be subject to frequency limitations. The same is true for unsatisfactory Paps (ICD-9 795.08). It may be necessary to provide an advance beneficiary notice to allow for billing the patient if Medicare is expected to deny payment. Modifier –GA is appended to the code to indicate that the beneficiary was given notice and the service may be denied.

The CPT codes for interpretation and hormonal assessment are add-on codes and at present can be billed only when a simultaneous screening code is billed. CPT codes can be billed as Bethesda or non-Bethesda, conventional or liquid-based, and those inputs will determine ultimate coding.

For nongynecologic cytology, coding for payment is based entirely on CPT. Unlike Pap tests, in which the technical screening portion and the professional interpretive function have separate codes, each nongyn code is separable into a PC and a TC payment, or it can be billed as a global charge. They are divisible into code families: 88104–88112 for washings, brushings, and body fluids; 88160–88162 for specified specimen types with prepared smears; and 88172–88173 for fine-needle aspiration specimens.

In contradistinction to the primary surgical codes in which the specimen type defines the code, in non-gyn cytology the overall type of preparation determines the code. The same specimen (for example, bronchial washings) may be prepared as smears, direct or post centrifugation (88104); as direct filters mounted on a slide (88106; 88107 if smears also prepared); as cytospins (88108); or as cellular enhancement preparations, for example, ThinPrep, SurePath (88112). The use of technologies that employ a filter for concentration and enhancement of cytological preparations but transfer the cellular material to a glass slide before further processing and evaluation (that is, ThinPreps) should be coded as 88112, not 88106 or 88107.

88160–2 is a code family of exclusion used for sources other than washings, brushings, body fluids, FNA, or lower gyn tract. Sputums prepared as smears are coded with this family as are direct smears—for example, Tzanck preps and, currently, intraoperative touch preps from tissue prepared by the pathologist. Code 88162 can be billed if more than five slides are used or more than one stain is used. Direct evaluation of smears for cellular inclusions by microbiology is coded as 87207 when the evaluation is limited to mere reporting of the specific type of inclusion without consideration of etiology. National correct coding initiative edits prohibit use of these or any cytology code in combination with codes 88304–9. If performed on a separate specimen or intraoperatively on the same specimen, modifier –59 must be appended to the cytology code.

FNA code 88173 is used for all FNA definitive reports regardless of specimen submission, for example, smears or rinsings with cellular concentration/enhancement. Additional codes from the 88104–88112 family are not used regardless of the number of slides or preparations used. For material procured by clinicians as aspirated cysts, code according to the collection technique. If submitted as FNA, code as such; if as cyst aspiration, either clarify aspiration technique with the clinician or code from the 88104–88112 family. Code 88172 is used for the immediate evaluation of an FNA specimen. These are billable per number of passes and separate evaluations documented by the pathologist. Assessment of adequacy by a technologist is not billable as 88172. It is acceptable for the cytotechnologist to screen the specimen, which is then also immediately reviewed by a pathologist for coding 88172.

Edits govern a number of the cytology codes. In general, one cannot bill Medicare Pap codes with nongynecologic codes for the same patient, same date of service, without a modifier signifying it is a separate and distinct specimen. Likewise, FNA specimens and nongynecologic codes cannot be billed along with certain additional nongynecologic codes without –59. Cytology codes will be denied for payment by Medicare if billed along with consultation codes 88321–5 unless performed on a separate specimen.


Susan Spires, MD, a member of the CAP Economic Affairs Committee, is with AmeriPath, Lexington, Ky. Dr. Mody, chair of the CAP Cytopathology Committee, is director of cytopathology, The Methodist Hospital, Houston.

The authors would like to thank Mark Synovec, MD, chair of the CAP Economic Affairs Committee, for his significant input and Economic Affairs Committee staff Pam Johnson and Lisa Miller for their help in preparing this document. The authors also thank Diane Davey, MD, and William Tench, MD, for their valuable suggestions.