Opinion ID: 212733
Heading Depth: 3
Heading Rank: 2

Heading: Billing Codes and Insurance Reimbursement

Text: The ability of physicians to profit from the use of any medical equipment device a significant factor in the device's market valuedepends largely upon reimbursement rates from insurers. Medical reimbursement across insurers begins with a physician's bill to an insurer under a standardized system, which uses five-digit, procedure-specific identifiers, called Current Procedural Terminology (CPT) codes. CPT codes are assigned by the American Medical Association (AMA). A number of relative value units (RVUs) is then recommended for each coded procedure. RVUs attempt to account for the work performed by a physician, the physician's training and expertise, the type of equipment used and the professional liability insurance required to perform a particular coded service. Insurers, including Medicare, assign a physician fee schedule based on a dollar-amount multiplier per approved RVU. [1] In short, in selecting a CPT code to bill for a particular procedure, a physician effectively knows of a determinative reimbursement rate for that procedure from each insurer during a given fiscal year. As part of fraud detection efforts, when use of a particular code increases by 10% or more during a given year, Medicare is alerted and usually commences an investigation. Id. at 17. When the NC-Stat was introduced to the market, it did not have a specific CPT code assigned to it. Instead, according to the allegations of the complaint, Neuro-Metrix instructed its sales personnel to actively promote the use of existing, neurology-based CPT codes to seek reimbursement for the NC-Stat procedure. Id. at 14; see also id. at 15-16. According to a confidential NeuroMetrix employee witness, the recommended codes were originally value weighted for neurologists to detect and diagnose neuropathies through combined use of invasive EMG needle tests and conventional nerve conduction studies involving highly calibrated multi-million dollar equipment.... Thus, under the RVUs assigned to the nerve conduction CPT billing codes, a neurologist could make between $700 and $900 per exam, ... because an expensive calibrated machine is utilized. In short, according to [the confidential witness], the expensive equipment used by a neurologist is one of the key factors in determining that the neurology-based CPT codes (95903 and 95904) reimburse at significantly higher dollar amounts than simple, automated procedures such as the NC-Stat System. Id. at 15 (emphasis in original).