Supporting healthcare professionals for over 150 years

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1 US Reimbursement Guide Supporting healthcare professionals for over 150 years 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 2017 American Medical Association.

2 VISIONAIRE Cutting Guides US Reimbursement Guide VISIONAIRE Patient Matched Cutting Guides VISIONAIRE patient matched cutting guides 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. Patient specific, single-use distal femoral and proximal tibia cutting guides are based off the patient s mechanical axis. Can be used with LEGION, GENESIS II and JOURNEY II Total 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-10 codes, which must be supported by documentation in the patient record. The ICD-10 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-10 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 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. 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. Per diem rate covers all costs and is based on case-mix classification system (RUG III). Home care facility Payment for patient stay in a home care setting Case-Mix Groups Skilled nursing facility Payment for patient stay in a skilled nursing facility RUG Physicians (inpatient, outpatients) Payment for services provided by physician Payment for services provided by a non-physician to an outpatient 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. 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. Non-physician providers (outpatient) HCPCS Level II For coding, payment, coverage and sample letters, please visit the Reimbursement website at Or you can contact us directly at reimbursement@smith-nephew.com or

3 Knee replacement 2017 Medicare Coding, Coverage and Payment Reference Sheet Visit the site at to obtain specific geographic payment information. Current Procedural Terminology (CPT) is copyright 2017 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 CY2017 Medicare Physician Fee Schedule national payment rates are as follows: CPT Code Description Payment Computer-assisted surgical navigational procedure for musculoskeletal procedures, image-less (List $153 separately in addition to code for primary procedure) resurfacing (total knee arthroplasty) Arthroplasty, knee, condyle and plateau; medial AND lateral compartments with or without patella resurfacing (total knee arthroplasty) $1,403 Common inpatient coding The International Classification of Disease tenth revision Procedure Coding System (ICD10-PCS) is a system of medical classification used for procedural codes that track various health interventions taken by medical professionals effective October 1, Below you will find the ICD10-PCS that may apply to patients undergoing the Knee Replacement procedure is: ICD10 Description Medicare DRG Payment 8E0YXBZ Computer Assisted Procedure of lower extremity N/A 0SRC 0SRD 0SRT 0SRU 0SRV 0SRW Replacement/Knee joint, right Replacement/Knee joint, left Replacement/Knee joint, femoral surface, right Replacement/Knee joint, femoral surface, left Replacement/Knee joint, tibial surface, right Replacement/Knee joint, tibial surface, left 469, 470 The fifth character on the ICD10-PCS will represent approach (open, external approach or percutaneous endoscopic) The sixth character indicates whether any device was used and remained at the end of the procedure (e.g., synthetic substitute, metal, e.g.) 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 CY2017 Medicare DRG national payment rates are as follows: DRG Description DRG Cross Reference 469 Major joint replacement or reattachment of lower extremity w mcc $17, Major joint replacement or reattachment of lower extremity w/o mcc $11,252 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.

4 VISIONAIRE Cutting Guides US Reimbursement Guide Knee replacement (continued) 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 CY2017 Medicare Imaging Fee Schedule national payment rates are as follows: CPT Code Description IDTF & Physician Payment OPPS Magnetic resonance (e.g. Proton) imaging, any joint of lower extremity; w/o contrast material $240 $ Professional component $70 $ TC Technical component $170 $ Radiologic examination, knee; 3 views $36 $ Professional component $10 $ TC Technical component $26 $ Radiologic examination, knee; complete, 4 or more views $40 $ Professional component $11 $ TC Technical component $29 $ Radiologic examination, knee; both knees, standing, anteroposterior $36 $ Professional component $9 $ TC Technical component $27 $ Bone length studies (orthoroentgenogram, scanogram) $36 $ Professional Component $15 $ TC Technical Component $22 $60 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. All VISIONAIRE Patient Match Instrument inquires should be directed to VISIONAIRE Support at Option 1 or mail to: visionairesupport@smith-nephew.com For coding, payment, coverage and sample letters, please visit the Reimbursement website at Or you can contact us directly at reimbursement@smith-nephew.com or

5 ICD10-PCS Description CPT Crosswalk BQ37Y0Z Magentic Resonance Imaging (MRI) of Right Knee using Other Contrast, Unenhanced and Enhanced BQ37YZZ Magentic Resonance Imaging (MRI) of Right Knee using Other Contrast BQ37ZZZ Magentic Resonance Imaging (MRI) of Right Knee BQ38ZZZ Magentic Resonance Imaging (MRI) of Left Knee BQ38Y0Z Magentic Resonance Imaging (MRI) of Left Knee using Other Contrast, Unenhanced and Enhanced BQ38YZZ Magentic Resonance Imaging (MRI) of Left Knee using Other Contrast BQ07ZZZ Plain Radiography of Right Knee 73562, 73564, 73565, BQ08ZZZ Plain Radiography of Left Knee 73562, 73564, 73565, BQ0DZZZ Plain Radiography of Right Lower Leg BQ0FZZZ Plain Radiography of Left Lower Leg 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 or reimbursement@smith-nephew.com. Medicare MRI Disclaimer 1 : 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. Coverage varies from Payer to Payer. Please contact your payer for coverage information. 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 or contact CMS. 3 See page 28, 4 Ibid. VISIONAIRE Cutting Guides US Reimbursement Guide continued on next page

6 VISIONAIRE Cutting Guides US 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:

7 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 patient s potential benefits. You may request a predetermination before your patient s 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. 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 as to how your patient s benefits may be paid. Pre-certification is a process still used by health insurance companies to control healthcare 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. 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. For coding, payment, coverage and sample letters, please visit the Reimbursement Website at Or you can contact us directly at reimbursement@smith-nephew.com or The information in this document was obtained from third party sources and is subject to change without notice, including as a result of changes in reimbursement laws, regulations, rules and policies. All content in this document is informational only, general in nature and does not cover all situations or all payers rules or policies. The service and the product must be reasonable and necessary for the care of the patient to support reimbursement. Providers should report the procedure and related codes that most accurately describe the patients medical condition, procedures performed and the products used. This document represents no promise or guarantee by Smith & Nephew regarding coverage or payment for products or procedures by Medicare or other payers. Providers should check Medicare bulletins, manuals, program memoranda, and Medicare guidelines to ensure compliance with Medicare requirements. Inquiries can be directed to the hospital s Medicare Part A fiscal intermediary, the physician s Medicare Part B carrier, or to appropriate payers. Smith & Nephew specifically disclaims liability or responsibility for the results or consequences of any actions taken in reliance on information in this document

8 Supporting healthcare professionals for over 150 years Smith & Nephew, Inc Brooks Road Memphis, TN USA Telephone: Information: Orders/inquiries: Trademark of Smith & Nephew Smith & Nephew V6 05/17