Financial impact of third-party reimbursement due to changes in the definition of ICD-9 arthroscopy codes 29880, 29881, and 29877

Background: The relative value units (RVUs) of the International Classification of Diseases, Ninth Revision (ICD-9) codes 29880 (partial medial and lateral meniscectomy) and 29881 (partial medial or lateral meniscectomy) were decreased from 2011 to 2012, and codes 29877 (debridement or shaving articular cartilage) and G0289 (debridement of articular cartilage or removal of foreign/loose body in a separate compartment) were bundled with codes 29880 and 29881. Our goal was to quantify the decrease in physician reimbursement in 2012 and to determine if there was an increase in the use of codes 29875 (limited synovectomy), 29876 (major synovectomy), and 29879 (abrasion arthroplasty or microfracture).

Methods: We analyzed a structured query language database for ICD-9 coding and third-party reimbursement of a large group practice. All knee arthroscopy cases were identified, and codes 29880, 29881, and 29877 were specifically assessed and compared between the years 2011 and 2012. The data were analyzed for number of cases, changes in code utilization, reimbursement per individual code and combinations of codes, and change in Medicare reimbursement between years. Statistical analyses were performed with chi-square tests to determine the difference in cases per year, and independent t tests were used to evaluate differences in reimbursement rates by insurance provider per year.

Results: Mean surgeon third-party reimbursement for code 29880 decreased from $734.33 in 2011 to $630.40 in 2012 and from $709.17 to $639.18 for code 29881. Comparing the combination of codes 29880/29877 in 2011 to 29880 in 2012, mean reimbursement decreased from $995.07 to $630.40 (-36.65%, p < 0.001); 29881/29877 in 2011 to 29881 in 2012 (-37.39%, p < 0.001) had a similar decrease. Mean Medicare reimbursement decreased from $749.58 for 29880/29877 in 2011 to $532.71 for 29880 in 2012 and from $704.11 for 29881/29877 in 2011 to $527.04 for 29881 in 2012. When referenced to the total number of knee arthroscopy cases each year, overall use of code 29877 decreased from 2710 times in 2011 to 348 times in 2012 (-28.12%). In 2012, the use of code 29875 increased from 247 to 467 times (5.25%), the use of code 29876 increased from 852 to 874 times (4.88%), and the use of code 29879 increased from 119 to 143 times (1.06%).

Conclusion: Third-party reimbursement rates for cases in 2011 dropped by over 35% for similar cases in 2012. The percentage drop in Medicare payment has been similar to other payers, but the absolute reimbursements are lower. Codes 29875, 29876, and 29879 were used more often in 2012, but the absolute numbers do not balance the decrease in use of code 29877.