Bilateral surgery Indicator for 77071 Changes from 3 to 2

Take a look at how a small status-indicator switch could cost you $46 per claim.


This month, you need to be sure your practice is up to speed on physician fee schedule news.


New: The bilateral surgery indicator for 77071has changed from 3 to 2.


While the effective date is January 1, 2011, the implementation date is April 4 this year; this means that the changes are retroactive to January 1, however your carrier's deadline for implementing the changes is April 4.


Previous way: '3' offered payment for two sides


77071 used to have a bilateral indicator of 3. Under the Medicare physician fee schedule, a bilateral surgery indicator of 3 basically means that when you report the procedure as bilateral, the carrier will pay you separately for each side.


Indicator 3 rule: When you report both sides on the same date, Medicare will base the payment for each side on whichever is lower -- the actual charge for each side or 100 percent of the fee schedule amount for each side. The rule is true irrespective of how you report the bilateral service such as using modifier 50, modifiers RT and LT or two units.


In addition, Medicare's policy for the 3 indicator is: "If the procedure is reported as a bilateral procedure and with other procedure codes on the same day, decide on the fee schedule amount for a bilateral procedure prior to applying any multiple procedure rules."


New way: According to '2', 1 code covers bilateral service


Since 77071 now has a 2 bilateral indicator, you will need to be sure your payment expectations are in line with the official fee schedule.


Indicator 2 rule: When CMS labels a code with a 2 bilateral indicator, relative value units are already based on the procedure being performed as a bilateral procedure, according to fee schedule documentation.


As a consequence, if you report the procedure two times on the same date, Medicare will base payment on the lower of:

The actual charge for both sides

Or 100 % of the fee schedule amount for a single code.


For instance: Think that you report 77071-LT with an actual charge of $50 and 77071- RT with an actual charge of $50. As such, the actual charge for both sides is $100.(remember that these dollar amounts are for illustrative purposes only).

Medicare lists $46.89 as the national rate for 77071 in both a facility as well as a non-facility setting.


In this example, Medicare will base payment on the fee schedule amount for a single code ($46.89) since it's lower than the actual charges ($100) for both the left and right sides.


Impact of the change: There could be a big drop for practices that were collecting double the reimbursement and now will get no payment adjustment. But then since the descriptor refers to inclusion of the contralateral joint, it would be difficult to argue the fact that the code is inherently bilateral.