907 KAR 3:010. Reimbursement for physicians' services

      Section 1. Definitions. (1) "Add-on code" or "add-on service" means a service designated by a specific CPT code which may be used in conjunction with another CPT code to denote that an adjunctive service has been performed.

      (2) "Assistant surgeon" means a physician who attends and acts as an auxiliary to a physician performing a surgical procedure.

      (3) "Average wholesale price" or "AWP" means the average wholesale price published in a nationally-recognized comprehensive drug data file for which the department has contracted.

      (4) "Biological" means the definition of "biologicals" pursuant to 42 U.S.C. 1395x(t)(1).

      (5) "CPT code" means a code used for reporting procedures and services performed by physicians and published annually by the American Medical Association in Current Procedural Terminology.

      (6) "Department" means the Department for Medicaid Services or its designee.

      (7) "Drug" means the definition of "drugs" pursuant to 42 U.S.C. 1395x(t)(1).

      (8) "Established patient" means one who has received professional services from the provider within the past three (3) year period.

      (9) "Global period" means the period of time in which related preoperative, intraoperative, and postoperative services and follow-up care for a surgical procedure are customarily provided.

      (10) "Incidental" means that a medical procedure is performed at the same time as a primary procedure and:

      (a) Requires few additional physician resources; or

      (b) Is clinically integral to the performance of the primary procedure.

      (11) "Integral" means that a medical procedure represents a component of a more complex procedure performed at the same time.

      (12) "Locum tenens" means a substitute physician:

      (a) Who temporarily assumes responsibility for the professional practice of a physician participating in the Kentucky Medicaid Program; and

      (b) Whose services are paid under the participating physician's provider number.

      (13) "Major surgery" means a surgical procedure assigned a ninety (90) day global period.

      (14) "Medicaid Physician Fee Schedule" means a list of current reimbursement rates for physician services established by the department in accordance with Section 3 of this administrative regulation.

      (15) "Minor surgery" means a surgical procedure assigned a ten (10) day global period.

      (16) "Modifier" means a reporting indicator used in conjunction with a CPT code to denote that a medical service or procedure that has been performed has been altered by a specific circumstance while remaining unchanged in its definition or CPT code.

      (17) "Mutually exclusive" means that two (2) procedures:

      (a) Are not reasonably performed in conjunction with one another during the same patient encounter on the same date of service;

      (b) Represent two (2) methods of performing the same procedure;

      (c) Represent medically impossible or improbable use of CPT codes; or

      (d) Are described in Current Procedural Terminology as inappropriate coding of procedure combinations.

      (18) "Physician assistant" is defined in KRS 311.840(3).

      (19) "Physician group practice" means two (2) or more licensed physicians who have enrolled both individually and as a group and share the same Medicaid group provider number.

      (20) "Professional component" means the physician service component of a service or procedure that has both a physician service component and a technical component.

      (21) "Relative value unit" or "RVU" means the Medicare-established value assigned to a CPT code which takes into consideration the physician’s work, practice expense and liability insurance.

      (22) "Resource-based relative value scale" or "RBRVS" means the product of the relative value unit (RVU) and a resource-based dollar conversion factor.

      (23) "Technical component" means the part of a medical procedure performed by a technician, inclusive of all equipment, supplies, and drugs used to perform the procedure.

      (24) "Usual and customary charge" means the uniform amount which a physician charges the general public for a specific medical procedure or service.

 

      Section 2. Reimbursement. (1) Reimbursement for a covered service shall be made to:

      (a) The individual participating physician; or

      (b) A physician group practice enrolled in the Kentucky Medicaid Program.

      (2) Except as provided in subsections (3) to (9) of this section, reimbursement for a covered service shall be the lesser of:

      (a) The physician’s usual and customary charge; or

      (b) The amount specified in the Medicaid Physician Fee Schedule established in accordance with Section 3 of this administrative regulation.

      (3) If there is not an established fee in the Medicaid Physician Fee Schedule, the reimbursement shall be forty-five (45) percent of the usual and customary billed charge.

      (4) Reimbursement for a service covered under Medicare Part B shall be made in accordance with 907 KAR 1:006, Section 3.

      (5) If cost-sharing is required for a service to a recipient, the cost-sharing provisions established in 907 KAR 1:604 shall apply.

      (6) Reimbursement for a service denoted by a modifier used in conjunction with a CPT code shall be as follows:

      (a) A second anesthesia service provided by a provider to a recipient on the same date of service and reported by the addition of the two (2) digit modifier twenty-three (23) shall be reimbursed at the Medicaid Physician Fee Schedule amount for the applicable CPT code;

      (b) A professional component of a service reported by the addition of the two (2) digit modifier twenty-six (26) shall be reimbursed at the product of:

      1. The Medicare value assigned to the physician’s work; and

      2. The dollar conversion factor specified in Section 3(2) of this administrative regulation;

      (c) A technical component of a service reported by the addition of the two (2) letter modifier "TC" shall be reimbursed at the product of:

      1. The Medicare value assigned to the practice expense involved in the performance of the procedure; and

      2. The dollar conversion factor specified in Section 3(2) of this administrative regulation;

      (d) A bilateral procedure reported by the addition of the two (2) digit modifier fifty (50) shall be reimbursed at 150 percent of the amount assigned to the CPT code;

      (e) An assistant surgeon procedure reported by the addition of the two (2) digit modifier eighty (80) shall be reimbursed at sixteen (16) percent of the allowable fee for the primary surgeon;

      (f) A procedure performed by a physician acting as a locum tenens for a Medicaid-participating physician reported by the addition of the two (2) character modifier Q six (6) shall be reimbursed at the Medicaid Physician Fee Schedule amount for the applicable CPT code;

      (g) An evaluation and management telehealth consultation service provided by a consulting medical specialist in accordance with 907 KAR 3:170 and reported by the two (2) letter modifier "GT" shall be reimbursed at the Medicaid Physician Fee Schedule amount for the applicable evaluation and management CPT code; and

      (h) A level II National HCPCS (healthcare common procedure coding system) modifier designating a location on the body shall be reimbursed at the Medicaid Physician Fee Schedule amount for the applicable code.

      (7) Except for a service specified in paragraphs (a) or (b) of this subsection, a physician laboratory service shall be reimbursed in accordance with 907 KAR 1:028.

      (a) Charges for a laboratory test performed by dipstick or reagent strip or tablet in a physician's office shall be included in the office visit charge.

      (b) A routine venipuncture procedure shall not be separately reimbursed if submitted with a charge for an office, hospital or emergency room visit or in addition to a laboratory test.

      (8) Reimbursement for placement of a central venous, arterial, or subclavian catheter shall be:

      (a) Included in the fee for the anesthesia if performed by the anesthesiologist;

      (b) Included in the fee for the surgery if performed by the surgeon; or

      (c) Included in the fee for an office, hospital or emergency room visit if performed by the same provider.

      (9) The department shall reimburse a flat rate of seventy-two (72) dollars per office visit for an office visit beginning after 5 p.m. Monday through Friday or beginning after 12 p.m. on Saturday or anytime Sunday.

 

      Section 3. Reimbursement Methodology. (1) Except for a service specified in subsections (3) through (7) of this section:

      (a) The rate for a nonanesthesia related covered service shall be established by multiplying RVU by a dollar conversion factor to obtain the RBRVS maximum amount specified in the Medicaid Physician Fee Schedule; and

      (b) The rate for a covered anesthesia service shall be established by multiplying the dollar conversion factor (designated as X) by the sum of each specific procedure code RVU (designated as Y) plus the number of units spent on that specific procedure (designated as Z). A unit shall equal a fifteen (15) minute increment of time.

      (2) The dollar conversion factor shall be:

      (a) Fifteen (15) dollars and twenty (20) cents for a nondelivery related anesthesia service; or

      (b) Twenty-nine (29) dollars and sixty-seven (67) cents for all nonanesthesia related services.

      (3) For the following services, reimbursement shall be the lesser of:

      (a) The actual billed charge;

      (b) A fixed fee of three (3) dollars and thirty (30) cents for:

      1. Administration of a pediatric vaccine to a Medicaid recipient under the age of twenty-one (21); or

      2. Administration of a flu vaccine;

      (c) For delivery-related anesthesia services, a fixed rate described as follows:

      1. Vaginal delivery, $215;

      2. Cesarean section, $335;

      3. Neuroxial labor anesthesia for a vaginal delivery or cesarean section, $350;

      4. Additional anesthesia for cesarean delivery following neuroxial labor anesthesia for vaginal delivery shall be twenty-five (25) dollars;

      5. Additional anesthesia for cesarean hysterectomy following neuroxial labor anesthesia shall be twenty-five (25) dollars;

      (d) A fixed rate of twenty-five (25) dollars for anesthesia add-on services provided to a recipient under age one (1) or over age seventy (70); or

      (e) A fixed rate of $150 for deep sedation or general anesthesia relating to oral surgery performed by an oral surgeon.

      (4) Except as established in subsection (5) or (7)(c) of this section, the department shall reimburse the following drugs at the lesser of the average wholesale price (AWP) minus ten (10) percent or the actual bill charge, or the actual billed charge if the drug is administered in a physician's office.

      (a) Rho (D) immune globulin injection;

      (b) An injectable antineoplastic drug;

      (c) Medroxyprogesterone acetate for contraceptive use, 150 mg;

      (d) Penicillin G benzathine injection;

      (e) Ceftriaxone sodium injection;

      (f) Intravenous immune globulin injection;

      (g) Sodium hyaluronate or hylan G-F for intra-articular injection;

      (h) An intrauterine contraceptive device;

      (i) An implantable contraceptive device;

      (j) Long acting injectable risperidone; or

      (k) An injectable, infused or inhaled drug or biological that:

      1. Is not typically self-administered;

      2. Is not excluded as a noncovered immunization or vaccine; and

      3. Requires special handling, storage, shipping, dosing or administration.

      (5) If long acting injectable risperidone is provided to an individual covered under both Medicaid and Medicare and administered by a physician employed by a community mental health center or other licensed medical professional employed by a community mental health center, the department shall provide reimbursement in an amount that is:

      (a) The same rate it reimburses for these drugs provided to Medicaid recipient; and

      (b) Reduced by the amount of the third party obligation.

      (6) Reimbursement for a covered service provided by a physician assistant shall be:

      (a) Made to the employing physician; or

      (b) Included in the facility reimbursement if the physician assistant is employed by a primary care center, federally qualified health center, rural health clinic, or comprehensive care center.

      (7)(a) Except for an item identified in paragraph (b) of this subsection or subsection (5) of this section, reimbursement for a service provided by a physician assistant shall be seventy-five (75) percent of the amount reimbursable to a physician in accordance with this section and Section 4 of this administrative regulation.

      (b) Except as established in subsection (5) of this section, the department shall reimburse the following drugs at the lesser of the average wholesale price (AWP) minus ten (10) percent or the actual billed charge, if the drug is administered in a physician's office by a physician assistant:

      1. Rho (D) immune globulin injection;

      2. An injectable antineoplastic drug;

      3. Medroxyprogesterone acetate for contraceptive use, 150 mg;

      4. Penicillin G benzathine injection;

      5. Ceftriaxone sodium injection;

      6. Intravenous immune globulin injection;

      7. Sodium hyaluronate or hylan G-F for intra-articular injection;

      8. An intrauterine contraceptive device;

      9. An implantable contraceptive device;

      10. Long acting injectable risperidone; or

      11. An injectable, infused or inhaled drug or biological:

      a. Is that not typically self-administered;

      b. Is not excluded as a noncovered immunization or vaccine; and

      c. Requires special handling, storage, shipping, dosing or administration.

 

      Section 4. Reimbursement Limitations. (1)(a) With the exception of chemotherapy administration to a recipient under the age of nineteen (19) years, reimbursement for an evaluation and management service with a corresponding CPT code of 99214 or 99215 shall be limited to two (2) per recipient per twelve (12) months.

      (b) Any claim for an evaluation and management service with a corresponding CPT code of 99214 or 99215 submitted in excess of the limit established in paragraph (a) of this subsection shall be reimbursed as an evaluation and management service with a corresponding CPT code of 99213.

      (c) A claim for an evaluation and management service of moderate or high complexity in excess of the limit established in paragraph (a) of this subsection shall be reimbursed at the Medicaid rate for the evaluation and management service representing medical decision making of low complexity.

      (2) Reimbursement for an anesthesia service shall include:

      (a) Preoperative and postoperative visits;

      (b) Administration of the anesthetic;

      (c) Administration of fluids and blood incidental to the anesthesia or surgery;

      (d) Postoperative pain management;

      (e) Preoperative, intraoperative, and postoperative monitoring services; and

      (f) Insertion of arterial and venous catheters.

      (3) With the exception of an anesthetic, contrast, or neurolytic solution, administration of a substance by epidural or spinal injection for the control of chronic pain shall be limited to three (3) injections per six (6) month period per recipient.

      (4) If related to the surgery and provided by the physician who performs the surgery, reimbursement for a surgical procedure shall include the following:

      (a) A preoperative service;

      (b) An intraoperative service;

      (c) A postoperative service and follow-up care within:

      1. Ninety (90) days following the date of major surgery; or

      2. Ten (10) days following the date of minor surgery; and

      (d) A preoperative consultation performed within two (2) days of the date of the surgery.

      (5) Reimbursement for the application of a cast or splint shall be limited to two (2) per ninety (90) day period for the same injury or condition.

      (6) Reimbursement for the application of a cast or splint associated with a surgical procedure shall be considered to include:

      (a) A temporary cast or splint, if applied by the same physician who performed the surgical procedure;

      (b) The initial cast or splint applied during or following the surgical procedure; and

      (c) A replacement cast or splint needed as a result of the surgical procedure if:

      1. Provided within ninety (90) days of the procedure by the same physician; and

      2. Applied for the same injury or condition.

      (7) Multiple surgical procedures performed by a physician during the same operative session shall be reimbursed as follows:

      (a) The major procedure, an add-on code, and other CPT codes approved by the department for billing with units shall be reimbursed in accordance with Section 3(1)(a) or (2)(b) of this administrative regulation; and

      (b) The additional surgical procedure shall be reimbursed at fifty (50) percent of the amount determined in accordance with Section 3(1)(a) or (2)(b) of this administrative regulation.

      (8) When performed concurrently, separate reimbursement shall not be made for a procedure that has been determined by the department to be incidental, integral, or mutually exclusive to another procedure.

      (9) Reimbursement shall not be made for the cost of a vaccine that is administered by a physician.

 

      Section 5. Supplemental Payments. (1) In addition to a reimbursement made pursuant to Sections 2 through 4 of this administrative regulation, the department shall make a supplemental payment to a medical school faculty physician employed by a state-supported school of medicine that is part of a university health care system that includes a:

      (a) Teaching hospital; and

      (b) Pediatric teaching hospital.

      (2) A supplemental payment plus other reimbursements made in accordance with this administrative regulation shall not exceed the physician’s charge for the service provided and shall be paid directly or indirectly to the medical school.

      (3) A supplemental payment made in accordance with this section shall be:

      (a) Based on the funding made available through an intergovernmental transfer of funds for this purpose by a state-supported school of medicine meeting the criteria established in subsection (1) of this section;

      (b) Consistent with the requirements of 42 C.F.R. 447.325; and

      (c) Made on a quarterly basis.

 

      Section 6. Appeal Rights. (1) An appeal of a department decision regarding a Medicaid recipient based upon an application of this administrative regulation shall be in accordance with 907 KAR 1:563.

      (2) An appeal of a department decision regarding Medicaid eligibility of an individual shall be in accordance with 907 KAR 1:560.

      (3) An appeal of a department decision regarding a Medicaid provider based upon an application of this administrative regulation shall be in accordance with 907 KAR 1:671. (23 Ky.R. 1309; eff. 9-18-96; Am. 25 Ky.R. 1739; 2575; eff. 5-19-99; 27 Ky.R. 2596; eff. 5-14-2001; 28 Ky.R. 985; eff. 12-19-01; 30 Ky.R. 750; 1543; eff. 1-5-04; 31 Ky.R. 646; eff. 1-4-05; 33 Ky.R. 1180; 2322; eff. 3-9-07; 34 Ky.R. 456; 1045; 1478; eff. 1-4-2008; TAm. eff. 1-27-2012; TAm. 4-11-12.)

Notation

      RELATES TO: KRS 205.560, 42 C.F.R. 440.50, 447 Subpart B, 42 U.S.C. 1396a, b, c, d, s

      STATUTORY AUTHORITY: KRS 194A.030(2), 194A.050(1), 205.520(3), 205.560

      NECESSITY, FUNCTION, AND CONFORMITY: The Cabinet for Health and Family Services, Department for Medicaid Services, has responsibility to administer the Medicaid Program. KRS 205.520(3) authorizes the cabinet, by administrative regulation, to comply with any requirement that may be imposed, or opportunity presented, by federal law for the provision of medical assistance to Kentucky's indigent citizenry. This administrative regulation establishes the method of reimbursement for physicians' services by the Medicaid Program.