Pricing Codes Without RVUs - Medicare Advantage

Policy No: 113
Originally Created: 01/01/2018
Section: Administrative
Last Reviewed: 08/01/2024
Last Revised: 08/01/2024
Approved: 08/08/2024
Effective: 09/01/2024
Policy Applies to: Medicare Advantage

This policy applies to all physicians, other qualified health care professionals, hospitals and other facilities.

CMS Status C - Carrier priced codes - Carriers will establish RVUs and payment amounts for these services, generally on an individual case basis following review of documentation such as an operative report.

Establishing a Fee - Determining an allowance that will be used to pay all claims processed for dates of service on or after the date the fee is established until the next scheduled fee update.

RVU - Relative Value Unit - Our health plan uses RVUs (facility, non-facility) published by the Centers for Medicare & Medicaid Services (CMS) in the CMS National Physician Fee Schedule Relative Value File.

RVU-based - A reimbursement methodology where an allowed amount is defined and associated specifically with a Healthcare Common Procedure Coding System/Current Procedural Terminology (CPT/HCPCS) code. The allowed amount is determined using the RVU associated with the code and a conversion factor.

Unlisted Code - A CPT/HCPCS code with a non-specific description. It is used when a more specific code is not available. Unlisted code descriptions usually include the phrase "unlisted procedure", "not otherwise specified", "not otherwise classified" or "miscellaneous".

In situations where a fee has not been established for a CPT or HCPCS code having a specific description (i.e., CMS status C codes, new codes or codes for which CMS has not published an RVU or a clinical lab allowance), the following protocol will be followed:

1. Local Carrier published fee where applicable or;

2. RVUs published by Optum in The Essential RBRVS. For modifier 26 and TC codes, Optum RVUs will be used only when CMS has determined that the code-modifier combination is valid. If CMS has determined a code is invalid with 26 or TC, no pricing will be established for the combination.

When either of the above allowances are not available, one of the following comparable service methodologies is used.

• Base the allowance on a Medicare pricing source.
• Base the allowance on the most closely comparable code. For example, in the case of a laparoscopic procedure without a specific CPT or HCPCS code, base the allowance on the most closely comparable open code.
• Base the allowance on the most closely comparable code with modifier 22.
• Base the allowance on the appropriate combination of CPT or HCPCS codes or components of these codes when the procedure or service is a combination of two or more existing CPT or HCPCS codes or components.

• Base the allowance on a percentage of billed charges.

This process establishes the base fee for the service, and then is processed according to the applicable contract terms.

The established fee will not change unless CMS or Optum release an RVU for that code at which time our health plan will update that fee with the new RVU rate on a prospective basis.

CPT or HCPCS codes without a published CMS RVU will be priced using the methodology described above, and the code will be attributed not only to the RVU but the associated indicators in the National Physician Fee Schedule Relative Value File.

Our health plan reserves the right to set a fee schedule amount for any code, whether or not that code has a published CMS fee.

Unlisted Codes
Unlisted codes are assigned a CMS Status “C” which means pricing is up to the carrier. Due to the wide variance of services that an unlisted code can represent, a set fee cannot be established, therefore, unlisted codes will be reviewed on an individual case basis. Once the appropriate documentation is reviewed, the following protocol will be used to price an unlisted code:

One of the following comparable service methodolgies is used:

• Base the allowance on a Medicare pricing source or other recognized source.
• Base the allowance on the most closely comparable code. For example, in the case of a laparoscopic procedure without a specific CPT or HCPCS code, base the allowance on the most closely comparable open code.
• Base the allowance on the most closely comparable code with modifier 22.
• Base the allowance on the appropriate combination of CPT or HCPCS codes or components of these codes when the procedure or service is a combination of two or more existing CPT or HCPCS codes or components.

• Base the allowance on a percentage of billed charges.

Claim lines billed with an unlisted or not otherwise classified code must be submitted with a description of services provided; claim lines submitted without a description, with a generic description or with an incomplete description may be denied.

Appropriate medical records, such as an operative report, may additionally be required to adjudicate the claim. Medical records not submitted upon request may result in denial of all or a portion of a claim.

None

Medicare-Based Fee Effective Dates

DME Purchase and Rental Limitations and Reimbursement

Drugs, Immunizations/Vaccines, Radiopharmaceuticals, and Skin Substitutes Reimbursed Under Medical Coverage