Briefing: Cosmetic Surgery Billing Package and Cosmetic Surgery Estimator Date: 22 March 2007

1. Briefing: Cosmetic Surgery Billing Package and Cosmetic Surgery Estimator Date: 22 March 2007 Time: 1110 - 1200

2. Agenda • Overview of 2007 Proposed Changes • Rate Methodology • Revised Superbill • Issues • Questions

3. Overview – 2007 Proposed Changes • New Rate Methodology • Consolidated Facility Fees • Overnight stay option • Additional cosmetic surgery procedures • Updated Superbill

4. Current Rate Methodology • CY 2006 reimbursement rates (CMAC) • HCPCS/CPT codes mapped to CMAC using FY06 Adjusted Standardized Amount (ASA), locality 300* • Additional fee for Facility, APC or ASC rates • Based on TRICARE APC and ASC rates • Additional fee for anesthesia management • Discounted fee for additional procedures • This methodology will remain the same for CY07 with the exception of the new facility fee type – Consolidated Rate * Median locality rate is subject to change annually; this locality rate is used regardless of MTF location

5. Current Rate Methodology • Professional fee • CY 2006 national average rate (CMAC)* • HCPCS/CPT codes mapped to CMAC using locality number 300 • Facility fee • TRICARE ASC rates • TRICARE APC rates • Average FY06 Direct Care Inpatient reimbursement rates • DRG 283 – RWP 0.578 • Area Wage Index <1.00 • ASA Third Party Rate – $8,939.81 • Anesthesia fee • Anesthesia multiplier = $17.85 per unit *This locality rate is used regardless of MTF location

6. Current Rate Methodology – Facility Fee • Facility costs –The facility cost is based on two different rate categories depending on the location of the procedure. For cosmetic surgery conducted in a provider’s office, an institutional fee will not apply • The Ambulatory Payment Classification rate (APC) is applied for cosmetic surgery performed in a bedded MTF (e.g., hospital operating room) • The Ambulatory Surgical Center (ASC) rate is applied when cosmetic surgery is applied when performed in the operating room of a non-bedded MTF (e.g., a clinic) • Procedure location – Location where the procedure will be performed

7. Proposed Rate Methodology • Professional fee • CY 2007 national average rate (CMAC)* • HCPCS/CPT codes mapped to CMAC using locality number 300* • Facility fee • TRICARE ASC rates • TRICARE APC rates • Consolidated rates** • Average FY07 Direct Care Inpatient reimbursement rates • DRG 283 – RWP 0.5966 • Area Wage Index <1.00 • ASA Third Party Rate – $9,265.67 • Anesthesia fee • Anesthesia multiplier $xxx per unit *This locality rate is used regardless of MTF location ** For procedures that have more than a $200.00 price difference between the APC & ASC rates, the facility fee will be consolidated. The average dollar amount between the ASC & APC rates will be used

8. Proposed Rate Methodology – Facility Fee Facility fees will be reduced for procedures with a price difference of more than $200.00 between their APC and ASC rates (Note:The facility fee will be the same for bedded and non-bedded locations) APC rate + ASC rate/2 = Consolidated rate

9. Current Surgical procedure with the highest RVU Charged 100% of facility fee Each additional associated and/or bilateral procedure Charged 50% of facility fee CY07 changes under development Rate Methodology – Facility Fee Facility Fee for Multiple or Bilateral Procedures When more than one procedure is performed during an operative session (e.g., bilateral procedure and/or multiple associated procedures), a facility fee will be applied to each additional procedure at 50% of the facility fee

10. Current Rate Methodology – Professional Fee • CMAC CY06 has four categories* • “Facility” physician* • “Non-Facility” physician • “Facility” non-physician • “Non-Facility” non-physician • The “facility” category includes hospitals and ambulatory surgical centers • The “non-facility” category includes provider offices, and all other non-facility settings • For services rendered in the office/minor surgery room, the non–facility professional fee will apply for bedded and MTFs w/o beds *This will remain the same for CY07

11. Current Rate Methodology – Inpatient Charges Charges for inpatient surgical services are based on the cost per DRG = $5167.21 • The cosmetic procedures identified as inpatient are: • 15831 Abdominoplasty* • 21141 Reconstruction Mid-face LeFort • 21193 Reconstruction Mandib rami/w/o bone graft • 21194 Reconstruction Mandible rami w/bone graft • 21195 Reconstruction Mandible w/o fixation • 21196 Reconstruction Mandible w/fixation * Although abdominoplasty is usually performed as an outpatient procedure, the inpatient option only applies to overnight stays

12. Proposed Rate Methodology – Inpatient Charges Overnight stay option • When the overnight stay option is elected for procedures that are usually considered outpatient, the stay will be billed at the inpatient DRG rate • The DRG rate (short stay) of $5,527.89 will apply, which includes professional, anesthesia, and facility fees • The patient must pay in advance

13. Laser Procedures Hair Removal Skin Resurfacing Tattoo Removal Treatment of spider veins Microdermabrasion Breast-Reduction/Revision Nipple reduction Nipple enlargement Breast reduction for men (Gynecomastia) Pectoral augmentation (men) Immediate insertion of implant Other Revisions Lip augmentation Buttock augmentation Calf augmentation Umbilicoplasty Liposuction Ultrasound assisted Mircolipoinjection/fat transfer Chemical Restylane Zyplast Zyderm Radiance Proposed New Cosmetic Surgery Procedures

14. Cosmetic Surgery Procedures – Proposed Coding Changes 2007 CPT Changes • Code 15831 for Abdominoplasty • Deleted • Replaced with an unlisted code 17999 • Abdominoplasty use CPT code 17999 • CPT 17999 – unlisted skin procedure

15. Providers are coding “Cosmetic Procedures” as medically necessary Providers do not want to charge the patient Costs for high priced cosmetic fillers are being absorbed by the clinic (e.g., Restylane – $274.00) Patients are sent as “outpatient admissions” Issues

16. What Are They Charging Downtown?

17. Procedure Downtown – 2006 Physician Surgeon Fees*/** Military – 2007 Physician Proposed Surgeon Fees** Abdominoplasty (tummy tuck) $6,400 $967.70 Restylane  $575 per 1 cc $427 per 1cc Cosmetic Surgery Cost Comparison

18. Cosmetic Surgery Cost Comparison Based on *2005 Surgeon Fees Downtown vs. 2006 Surgeon Fees MHS *2005 ASAPS(American Society for Aesthetic Plastic Surgery) Procedure Quick Facts

19. CSET Version 3 – Under Development

20. Summary • CSET distributed to 61+ users • CSET training for users • UBU/UBO Conference March 2007 • Audio teleconference May 2007 • CSET version 3 under development • CSET version 3 will be distributed May 2007