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Impact of HCFA's Revised Billing Instructions for Kinetic Modeling and Recirculation Tests
Arthur F. Rosenthal, PhD - Kent F. Mahlke
The following commentary is in response to revised HCFA regulations released last September regarding laboratory billing. It was published in the February 1998 issue of Nephrology News & Issues.
The recent revision of Medicare reimbursement rules1 relating to kinetic modeling and by extension to recirculation testing poses a serious source of concern for laboratories and dialysis clinics. Although the underlying rule is not new (it is in fact obsolete relative to today's practice), the interpretation by the Health Care Financing Administration is novel. It should be remembered that the promulgation of this interpretation is occurring in an atmosphere of greatly increased funding for, and activity of, the HCFA enforcement agency, the Office of the Inspector General (OIG).
In order to appreciate the nature of the problem this creates, it is interesting to note that the original reimbursement rules were enacted at the time when kinetic modeling was nonexistent. Patients were typically' monitored simply by a weekly blood urea nitrogen (BUN) test, and no real measure of the adequacy of dialysis was used. These weekly BUN tests were then included in the treatment composite reimbursement.
It comes as no surprise to anyone in the dialysis community that the days of weekly, random BUN testing are long gone. Instead of 12 or 13 BUN tests per quarter, National Kidney Foundation/DOQI 2 recommendations and End-Stage Renal Disease Network requirements involve six or nine appropriately-drawn BUN tests per quarter. But these give much more information about the adequacy of dialysis when subjected to kinetic mathematics. In other words, rather than obtaining only a general idea of the patient's status as given by weekly BUNs, one specific treatment is now being quantitatively and definitively evaluated for adequacy as a sampling of all the 12 or 13 monthly treatments. HCFA has nonetheless chosen to enforce the obsolete rules in the setting of a completely different modern kinetic clinical practice.
It is evident with weekly BUNs in the composite rate, the total number of such tests which are not separately billable to Medicare will be 13 or less per quarter. Three kinetic BUNs per quarter in the absence of weekly BUNs will thus not be separately billable, because they amount to 6 or 9 tests only. Even if a quarterly recirculation set is thrown in, the total number of BUN tests will only be 12 and none of these will be billable to Medicare.
It has been common practice for laboratories to bill separately for the kinetic BUN post and 2nd-day pre-BUNs, having convinced most Medicare carriers that they are used for the specific purpose of determining adequacy of dialysis and not for the general monitoring of the patient's condition. The same is also true of the recirculation BUNs.
This has tended to provide some compensation from Medicare for the significant amount of time spent in patient and dialyzer data collection in order to provide calculations and prescriptions under the more sophisticated kinetic models. In fact, BUN analysis itself occupies less than 5% of the time and effort involved in obtaining kinetic results by any but the simplest default formulas.
Given the requirement that the clinic-laboratory relationship be free of any inducement / kickback, this leads to a significant problem. If the Network-required and DOQI-recommended kinetics and the recirculation evaluation now cannot be charged to Medicare, who is to pay for it? Even if the laboratory wished to absorb the cost, performing free services or testing for the clinic constitutes the essence of an inducement / kickback. The only alternative is then to charge the clinic for the kinetics and recirculation calculations, either as a direct charge or as an increase to fair market value of the laboratory's composite charge. The clinics must be careful not to fall into the trap of believing that this charge is optional and think they can get a "good deal" with free service.
Typically the composite charges appear minimally to meet fair market value definition, since the tests included are all done on automated instruments which require a minimum of technical intervention. A kinetics calculation can give Kt/Vs, URRs, and dialysis prescription data, but it is a highly labor-intensive process. The time required to reach a final set of results may exceed 15 minutes per patient, even if all the data is in-house. This labor expense cannot be charged below cost, and the charge can be significant.
The bottom line effect of these changes is that laboratories can no longer bill Medicare for kinetic / recirculation BUNs, and to maintain compliance they must bill the clinics at fair market value (certainly not below cost) for these calculations. Alternatively, the clinics may elect to perform the calculations themselves.
References:
1. Medicare Carriers Manual, Part 3 - Claims Process. HCFA Pub. 14-3, Rev. 1572, 6/97.
2. Dialysis Outcomes Quality Initiative (DOQI). Guidelines for Hemodialysis Adequacy. National Kidney Foundation, New York 1997; pp.23 ff.
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