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David McGill Blogger

Code Cracking

Posted by David McGill | September 07, 2012

CMS. PDAC. HCPCS. Enough acronyms exist in the world of Medicare to confuse even experienced O&P professionals. The purpose of this post is to clarify two closely related but separate processes: (1) how codes get created; and (2) how that’s different from what the Pricing, Data Analysis & Coding (PDAC) group does.

How Codes Get Created

Based upon a variety of factors, Medicare can choose to create a code for a new prosthetic or orthotic device when the already-existing code set doesn’t adequately describe it. Medicare does not initiate this process. Rather, a product manufacturer submits an application setting forth what the new product is and why it believes a new code is warranted. A specific workgroup within Medicare – the HCPCS Coding Workgroup – reviews these applications. Every spring, the HCPCS Coding Workgroup publishes its initial decisions regarding the submissions made the previous year. Those decisions are finalized in November, and any new codes that are deemed payable by Medicare are added to the fee schedule effective January 1 of the following year.

So, for example, Össur submitted a request for a new code describing its POWER KNEE in December, 2011. This past spring, the HCPCS Coding Workgroup published a favorable initial decision indicating that it had decided to create a new code to describe this product. In November, the Workgroup will issue its final decision.

The Difference Between Code Creation and What PDAC Does

Unlike the HCPCS Coding Workgroup, the PDAC isn’t involved in new code creation. Rather, the PDAC assigns already-existing codes to devices. This can happen in two ways.

First, the PDAC can require that entire classes of devices come to it for review. For example, in 2011, the PDAC notified manufacturers that all products claiming L0174 had to be submitted to it. In order for a supplier to continue billing Medicare for a L0174 device, it had to be formally reviewed and listed on the PDAC website as qualifying for that code.

Second, a manufacturer can voluntarily go to the PDAC and request a coding verification. For example, Össur chose to do this for its Re-Flex Shock and Re-Flex Rotate feet, requesting L5987 for the former and L5987+L5984 for the latter. The PDAC issued coding verifications that confirmed the correct code for Re-Flex Shock was L5987 and the correct codes for Re-Flex Rotate were L5987+L5984.

One other thing about the PDAC: whenever the HCPCS Coding Workgroup creates a new code, the PDAC lists the product giving rise to that code on its website (e.g., PROPRIO FOOT and L5973). The PDAC does this because the creation of a code by the HCPCS Coding Workgroup acts as Medicare’s confirmation that the new code applies to that new product. The PDAC doesn’t have to review that product separately, because the creation of a new code for it by the HCPCS Coding Workgroup serves as verification of the code’s correctness.

Summary: What You Need to Know

The HCPCS Coding Workgroup creates new codes. The PDAC assigns already-existing codes to products. It’s that simple.

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