Financial impact of third-party reimbursement changes for CPT Code 29826: experience of a large group practice

Background: On January 1, 2012, the Centers for Medicare & Medicaid Services converted Current Procedural Terminology (CPT) code 29826 (arthroscopic acromioplasty) from a stand-alone code to an add-on code and reduced the relative value units from 19.58 to 5.24. The goal of this study was to quantify the financial impact of this change on a large single-specialty orthopaedic surgery practice.

Methods: Custom software was used to query the database that harbors billing data for a large single-specialty orthopaedic group. Data were independently generated based on patient identification data and insurance class, and compared between 2011 and 2012. Codes 29826, 29827 (shoulder arthroscopy, rotator cuff repair), 29822 (shoulder arthroscopy, debridement, limited), 29823 (shoulder arthroscopy, debridement, extensive), and 29824 (shoulder arthroscopy, distal claviculectomy) were all searched independently for each year and cross-referenced with each other and all other shoulder codes. Modifier codes for surgical assistants were analyzed separately and subsequently combined with primary surgeon data for financial analysis. This included assessment of surgeon reimbursement per occurrence of code 29826 and surgeon reimbursement by Medicare compared with non-Medicare payers.

Results: Code 29826 was used 1536 times in 2011 and 1410 times in 2012 (-2.59% after correcting for all shoulder arthroscopy cases per year). Code 29822 was used significantly more in 2012 both alone (1.45%, p = 0.001) and in total (2.45%), but the use of 29823 did not change (p = 0.17). A combination of three of the five selected codes was used significantly less in 2012 (p < 0.001), while the use of any combination of four codes was used significantly more in 2012 (p < 0.001). Assistant use did not appreciably change between years. Average reimbursement for code 29826 by all payers in 2011 was $456.84 and $441.64 in 2012. Average payment by Medicare was $268.58 in 2011 and $171.02 in 2012 (-36.3%). Medicare paid 54.3% of other payers per case in 2011 and 33.1% of other payers in 2012.

Conclusions: Reimbursement for code 29826 by non-Medicare payers did not decrease dramatically between 2011 and 2012. However, Medicare reimbursement fell substantially.