Be careful how you bundle: Learning what’s significant
By Dean Rossiter
Senior Manager
Orion Consulting
Cleveland
Question: Can I bundle procedure codes under APGs, or do consolidation and packaging perform the same function?
Answer: Providers do not need to bundle their CPT-4 codes prior to submission because the APG grouper will automatically perform any bundling that is to occur.
There are two different mechanisms under APGs that essentially perform the bundling process. They include:
• Significant-procedure consolidation.
This type of bundling occurs when multiple, related significant procedures are performed during the same patient visit.
For example, a complex and a simple endoscopy of the upper airway performed during the same visit will be consolidated, or combined, for payment. The rationale is that the simple endoscopy should require minimal additional time and resources. After consolidation, you would only receive payment for the complex endoscopy.
Some payments will be discounted
Commercial payers such as Seattle-based Blue Cross of Washington and Alaska have been using significant-procedure consolidation. The Health Care Financing Administration (HCFA) does not plan to adopt significant-procedure consolidation for Medicare prospective payment.
HCFA will probably use the National Correct Coding Initiative (NCCI) instead of significant-procedure consolidation. The NCCI, implemented last year by HCFA, sets standards for Medicare carriers to use in identifying incorrect coding practices when several codes are used rather than a more comprehensive code that includes all components of a procedure.
(Editor’s note: For additional information on NCCI, see the article in the April 1997 issue of Outpatient Reimbursement Management’s Outpatient Coding Strategist.)
• Ancillary service packaging.
This second type of bundling occurs when common ancillary services such as chest X-rays or routine lab work are performed in conjunction with a significant procedure or medical visit. A payer will usually define which ancillary services can be bundled into the visit or significant procedure.
Usually, high-volume, low-cost ancillary services are bundled into the cost or relative weight associated with a significant procedure or medical visit APG.
The intent of ancillary packaging is to provide an incentive for providers to utilize resources efficiently. Each payer will make a decision on which ancillary service APGs will be packaged and which will be paid separately under its own respective APG.
If multiple significant-procedure APGs or multiple ancillary APGs remain after consolidation and packaging, they will be paid on a discounted basis. The highest weighted APG would be paid at 100%. The second-highest would be discounted by an amount set by the payer.
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