Health and Human Services Commission
FREW Medical Initiative
Proposal Attachment 1: Current Procedural Terminology (CPT) Codes for Which
There is No Current Policy or Pricing
(Draft as of February 23, 2009)
Healthcare insurers in the United States process over five billion claims each year.
To ensure orderly and consistent claims processing, a standardized coding system
is essential. The Healthcare Common Procedure Coding System (HCPCS), which
is based on the American Medical Association’s Current Procedural Terminology
(CPT), is the standard coding system in the U.S. today. The CPT taxonomy was
developed in 1966 and is updated annually.
The HCPCS was established in 1978 to provide a standardized coding system for
describing the specific items and services provided in the delivery of health care.
Initially, use of the codes was voluntary, but, with the implementation of the Health
Insurance Portability and Accountability Act of 1996, use of the HCPCS for
transactions involving health care information became mandatory
There are approximately 26,000 active HCPCS procedure codes in the Medicaid
fee-for-service and PCCM claims processing system. Texas Medicaid has
Background: developed pricing and policy for approximately 20,000 of these codes. However,
the absence of pricing and policy for any specific code does not mean that the
service is not a benefit of Texas Medicaid. Consistent with federal law, Texas
Medicaid provides all medically necessary services that fall within the scope of the
Medicaid act (specifically, section 1905(a) of the Social Security Act).
Texas Medicaid is proposing a research initiative to determine which of the
remaining 6,000 HCPCS codes to select for individual policy and pricing
consideration. The research will rely on medical resources such as Medicare
guidelines, private carrier benefit structures, clinical experts, evidence-based
research from health-related journals and associations, and other states’ Medicaid
coverage. A second initiative will address medical policy development and pricing
recommendations for the selected codes.
Conduct a study of all procedure codes for which policy and reimbursement rates
Description of have not yet been established. Based on the research, identify those codes for
Proposal: which policy and reimbursement rates should be developed.
For the EPSDT population, Texas Medicaid reimburses all medically necessary
services that are eligible for section 1905(a) federal matching funds.
Current Texas Currently, if a service is medically necessary but no policy or reimbursement rates
Medicaid Policy: have been established for the specific procedure code, the healthcare provider must
submit a claim for service using a non-specific code. The non-specific procedure
code is reimbursed at a specifically determined price for the service requested.
1 of 4 February 2009
Health and Human Services Commission
FREW Medical Initiative
Proposal Attachment 1: Current Procedural Terminology (CPT) Codes for Which
There is No Current Policy or Pricing
(Draft as of February 23, 2009)
This process may be time intensive for the provider. The ultimate activation of
additional specific codes will, among other things, clarify for providers what
services are available under Texas Medicaid and lessen administrative burdens on
providers.
The projected fiscal cost for the project is $1,380,424 all funds in FY2009, FY2010
and FY2011.
These costs include $96,000 GR and $192,000 All Funds for dedicated clinical and
project staff time to provide expertise in researching medical documents to
formulate recommendations. The estimated completion of the review is February
2009.
Workload assumptions for the $192,000 all funds fiscal impact include:
• 90% of reviewed procedure codes may be recommended for policy and pricing,
• HHSC will conduct a study of procedure codes to determine medical
appropriateness for policy and pricing development consideration, and
• the review will be completed by clinical staff.
The costs also include $471,704 GR and $1,188,424 All Funds for 5 FTE to
develop the associated policy and rates and maintain policy and rates after review is
completed. Areas of HHSC that support the benefits implementation process
include Medicaid/CHIP Division, HHSC Rate Analysis and HHSC Strategic
Fiscal Decision Support.
Assumptions and
Impact: Medicaid CHIP Division Office of the Medical Director—Nurse IV (2)
SFY 2009 $29,582 GR and $118,323 All Funds
SFY 2010 $46,465 GR and $185,858 All Funds
SFY 2011 $46,465 GR and $185,858 All Funds
Medicaid CHIP Division Claims Administrator Operations—Prog. Spec. V (1)
SFY 2009 $28,359 GR and $56,717 All Funds
SFY 2010 $44,020 GR and $88,039 All Funds
SFY 2011 $44,020 GR and $88,039 All Funds
HHSC Strategic Decision Support—Research Specialist V (1)
SFY 2009 $28,359 GR and $56,717 All Funds
SFY 2010 $44,020 GR and $88,039 All Funds
SFY 2011 $44,020 GR and $88,039 All Funds
HHSC Rate Analysis—Rate Analyst (1)
SFY 2009 $28,359 GR and $56,717 All Funds
SFY 2010 $44,020 GR and $88,039 All Funds
SFY 2011 $44,020 GR and $88,039 All Funds
SFY 2009 $210,658 GR and $480,474 All Funds
2 of 4 February 2009
Health and Human Services Commission
FREW Medical Initiative
Proposal Attachment 1: Current Procedural Terminology (CPT) Codes for Which
There is No Current Policy or Pricing
(Draft as of February 23, 2009)
SFY 2010 $178,525 GR and $449,975 All Funds
SFY 2011 $178,525 GR and $449,975 All Funds
The review will include information about other states’ policies on covering certain
Other States: CPT codes for which Texas Medicaid has not yet developed policy or
reimbursement rates.
Advantages:
Administrative improvement for providers and enhances timeliness of
Application to
service delivery.
Texas –
Advantages & Disadvantages:
Disadvantages to
Funding this
Proposal: Implementing any recommendations from the study may be time intensive
and the advantage of the proposal may not be visible to clients/families in
the short term.
Increase
Increase the participation of Improve
Meets FREW number of children medical and Appropriate
Improve
who receive dental providers Utilization of
related Objective THSteps medical who serve Medically X Coordination of X
Care
and dental check- children in the Necessary
up Texas Medicaid Services
Program
This Option should be considered in conjunction with other
Stand Alone Option X FREW Strategic Initiatives
Other
Considerations
State and Federal 1115 Waiver Rules ?
Approval(s) Federal Other Waiver(s) State Legislation
Required: State Plan Amendment X
Affected Stakeholders
Medicaid clients and providers.
Implementation
Considerations & Implementation Timeframes (in months)
Timeframes:
Estimated timeframe for completion of the study is February 2009.
3 of 4 February 2009
Health and Human Services Commission
FREW Medical Initiative
Proposal Attachment 1: Current Procedural Terminology (CPT) Codes for Which
There is No Current Policy or Pricing
(Draft as of February 23, 2009)
The internal Frew Workgroup provided unanimous support for this proposal.
Numerous HHSC divisions commented on the possible staffing impact once
HHSC Interagency
recommendations are received and recommended for implementation. Staff also
Workgroup
recommended that the proposal be further clarified that the codes being reviewed
Recommendation:
are current Medicaid benefits not “non-covered” benefits.
The Frew Advisory Committee provided unanimous support for this proposal.
FREW Technical Select members questioned the benefit this proposal will have on children’s access
Advisory to professional services and suggested that most codes that will be reviewed by
Committee HHSC or its contractor will be Medicaid benefits related to experimental medical
Recommendation: services, durable medical equipment, and physician administered drugs that are not
commonly used by children under the age of 21, outdated, or very rare and unique
services.
4 of 4 February 2009