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Department of Health and Human Services
Medicare Appeals Council
The Hand Care Center

Supplementary Medical Insurance Benefits  



National Heritage Ins. Co.

(Docket Number)


On October 29, 2002, the Medicare Appeals Council advised The Hand Care Center ("HCC") that it had decided, on its own motion, to review the Administrative Law Judge's August 30, 2002 decision in this case. Because that decision contains an error of law, the Council hereby reverses the August 30, 2002 decision and finds that Medicare payment may not be made for the services at issue.

In deciding to review the August 30, 2002 decision, we considered the record that was before the Administrative Law Judge, as well as the October 25, 2002 memorandum (with attachments) from the Centers for Medicare & Medicaid Services (CMS). The CMS memorandum is hereby entered into the record in this case as Exhibit AC-1. In addition, we considered correspondence -- dated September 30 and November 18, 2002 -- filed by HCC in response to our notice of own motion review and proposed decision in another case (Shirley J. Chaplin, et al., Docket Numbers 999-19-0242 et al.) that addresses issues identical to those in this case. (1) HCC's November 18, 2002 correspondence consisted of a letter (with attachments) from Julio Taleisnik, M.D. Finally, we considered Dr. Taleisnik's February 28, 2003 letter in response to our Notice of Own Motion Review and Proposed Decision in this case.

The beneficiary, Sandra Fisher, underwent hand surgery on March 2, 2000. (Exh. 3 at 1). The surgery was performed by a primary surgeon and an assistant surgeon. (Id.). HCC billed Medicare for the surgery under the following HCPCS codes: 25810 (arthrodesis, wrist; with iliac or other autograft); 25248 (exploration with removal of deep foreign body, forearm or wrist); 64721 (neuroplasty and/or transposition; median nerve at carpal tunnel), and 25116 (radical excision of bursa, synovia of wrist, or forearm tendon sheaths; extensors, with or without transposition of dorsal retinaculum). In addition to seeking payment for the services of the primary surgeon, HCC requested payment for the services of the assistant surgeon (also known as an "assistant-at-surgery") by appending modifier "-80" to each of these codes.

With respect to HCPCS code 25810, the carrier allowed payment for both the primary and assistant surgeon's services. The carrier (or its hearing officer) also authorized payment for the primary surgeon's services under HCPCS codes 25248 and 64721. However, it denied payment for the assistant surgeon's services under procedure codes 25248 and 64721. In addition, the carrier determined that no payment could be made (for either the primary or assistant surgeon's services) under HCPCS code 25116 because it was a component of (i.e., "bundled" with) the procedure designated by HCPCS code 25810.

Thus, there are two issues before us: first, whether payment can be made the services of an assistant-at-surgery under HCPCS codes 25248 and 64721; and second, whether payment can be made for the services billed under HCPCS code 25116. As explained below, we find that no additional payment may be made under these codes.

Issue 1: Whether payment can be made for the assistant-at-surgery services billed under HCPCS codes 25248 and 64721.

Medicare's denial of payment for the assistant surgeon's services was based on section 1848(i)(2)(B) of the Social Security Act (Act), (2) which provides:

If the Secretary determines, based on the most recent data available, that for a surgical procedure (or class of surgical procedures) the national average percentage of such procedure performed under this part which involve the use of a physician as an assistant at surgery is less than 5 percent, no payment may be made under this part for services of an assistant at surgery involved in the procedure.

Based on consultations with the medical community and nationwide utilization data, CMS has identified the procedures that involve the services of assistants-at-surgery in less than five percent of cases nationally. See 56 Fed. Reg. 59502, 59603-04 (Nov. 25, 1991); 57 Fed. Reg. 36006, 36008 (Aug. 12, 1992). These CMS determinations are listed in the Medicare Physician Fee Schedule Database (MPFSDB). See Medicare Carriers Manual �� 4828(D) & 15900.1. For each procedure listed in the MPFSDB, there are several fields that designate, among other things, Medicare's payment policies with respect to the procedure. If the numeric indicator in the "assistant surgeon" field (field 23) is 1, then the procedure is subject to the statutory payment limitation in section 1848(i)(2)(B), and no payment may be made for an assistant-at-surgery. Id. � 15900.1.

For each of the above-listed procedures, the numeric indicator in field 23 of the MPFSDB is "1". (See Exh. AC-2, attached to this decision). These procedures are therefore subject to the statutory prohibition on payment for the services of an assistant-at-surgery.

The Administrative Law Judge determined that applying section 1848(i)(2)(B) of the Act was inappropriate here because the procedures in question are performed mostly in teaching hospitals, using residents as surgical assistants, and thus are not reflected in the national utilization statistics for assistants-at-surgery. However, the file contains no data or other evidence (except for the assertion of a HCC employee) that these procedures are performed mostly in teaching hospitals. In addition, we note that, in the preamble to the final rule implementing section 1848(i)(2)(B) of the Act, CMS rejected a recommendation that the services of teaching hospital residents be counted in determining whether a procedure is subject to the payment limitation, saying:

We do not believe Congress intended to count interns and residents as physicians for purposes of the 5 percent threshold. Moreover, we would note that section 4107 of OBRA '90 [which enacted the statutory payment limitation] states that no payment may be made under part B for services of an assistant-at-surgery when the national average percentage of such procedures "performed under this part" involving the use of a physician as an assistant-at-surgery is less than 5 percent. The phrase "under this part" refers to part B. Since the services of interns and residents are almost always part A services and are not part B physicians' services, they would not be counted for purposes of the assistants-at-surgery provision in most cases. We would modify our list of services if data were presented to show that interns and/or residents provide assistant-at-surgery services on an outpatient (part B) basis and would increase the percent to 5 percent or more nationally.

57 Fed. Reg. 36006, 36008 (August 12, 1992). We find nothing in the statute, legislative history, regulations, or agency policy statements that is inconsistent with CMS's interpretation of section 1848(i)(2)(B), or with its reasons for not counting the assistant-at-surgery services performed by teaching hospital residents in determining whether a particular procedure is performed more than five percent of the time.

As indicated, Medicare has determined that the statutory payment limitation in section 1848(i)(2)(B) is applicable to each of the codes at issue. In an apparent attempt to challenge the limitation's applicability, HCC submitted (as attachments to Dr. Taleisnik's November 18, 2002 letter) excerpts from a report entitled Physicians as Assistants at Surgery. The report contains the results of a study performed by the American College of Surgeons and 15 specialty organizations concerning the need for a physician as an assistant-at-surgery for all procedures listed in the "Surgery" section of the American Medical Association's Current Procedural Terminology. Each participating organization was asked to review codes applicable to their specialty and determine whether the operation requires the use of a physician as an assistant-at-surgery: (1) almost always, (2) almost never; or (3) some of the time. However, no numerical values were assigned to these categories. Moreover, the study does not purport to reflect actual nationwide utilization rates. Under the circumstances, we do not have sufficient grounds to disturb the Medicare program's determination that, for the procedures in question, an assistant-at-surgery is used in less than five percent of outpatient cases nationwide.

Dr. Taleisnik asserts that the care rendered by the assistants-at-surgery in this case was medically necessary and appropriate, and that the "decision making of a Surgeon, who has all the facts when determining to use an Assistant at Surgery, cannot be ignored." However, as we indicated in our November 8, 2002 letter to HCC, medical necessity is not an issue in this case. The issue is the applicability of a statutory payment limitation and, more specifically, Medicare's determination that the services of assistants-at-surgery are, for the procedures in question, used in less than five percent of cases nationally. For procedures in which an assistant-at-surgery is used less than five percent of the time, Congress has directed the Medicare program not to pay for the services of the assistant surgeon, regardless of whether the services are medically necessary. Neither the Medicare program nor the Medicare Appeals Council has the legal authority to ignore this statutory limitation when it applies (as it does here).

Issue 2: Whether separate payment can be made for services billed under HCPCS code 25116.

Section 1848 of the Social Security Act authorizes the Medicare program to establish a fee schedule that sets payment amounts for physician services. Pursuant to that statutory authority, Medicare has established uniform national policies to implement the fee schedule, including a requirement that physicians utilize the HCFA Common Procedures Coding System (HCPCS) when billing for services provided to Medicare beneficiaries. See 42 C.F.R. 414.40. With respect to a physician's surgical services, a key national policy is that "[a]ll services integral to accomplishing a procedure are considered bundled into that procedure and, therefore, are considered a component part of the comprehensive [HCPCS] code." (See Medicare Carriers Manual (MCM) � 15068(A)). These "integral" services are assumed to represent the standard of care in accomplishing the comprehensive procedure, and accordingly payment for them is bundled into the payment for the comprehensive procedure. (Id. �� 4630(F), 4824(A) 15010 & 15068).

In 1996, the Health Care Financing Administration (now known as the Centers for Medicare and Medicaid Services) implemented a national "Correct Coding Initiative" (CCI), the aim of which was to clarify or develop national coding and payment policies and to promote and ensure accurate billing by physicians. (See MCM � 4630). The CCI established the following principles for determining when payment for a component service is included in the payment for a more comprehensive procedure:

  • The service represents the standard of care in accomplishing the overall procedure;

  • The service is necessary to successfully accomplish the comprehensive procedure; failure to perform the service may compromise the success of the procedure
  • The service does not represent a separately identifiable procedure unrelated to the comprehensive procedure performed.

(MCM � 15068(A)).

As part of the CCI, HCFA published the National Correct Coding Policy Manual (NCCPM), which identifies "comprehensive" and "component" codes for surgical services. Comprehensive codes relate to procedures that may include multiple services which, when performed together, should be billed only under that code. NCCPM 5.2 (July 1999), Chapt. 1, Part K. Component codes identify procedures that can be billed separately when performed separately, but when performed as part of a comprehensive procedure should be billed only under the comprehensive code. Id.

The NCCPM identifies HCPCS code 25116 as a component of HCPCS code 25810 (arthrodesis, wrist; with iliac or other autograft). (See NCCPM 5.2 (1999)). According to the policy statement associated with this pair of codes, the service designated by HCPCS code 25116 is integral to accomplishing the procedure designated by HCPCS code 25810 under accepted standards of medical and surgical practice. Consequently, the service designated by HCPCS code 25116 is considered to be bundled with the comprehensive procedure (HCPCS code 25810) and is generally not separately payable. (Id. Chapt. 1, Part B).

Under billing modifier -59, Medicare permits separate payment to be made for an otherwise bundled service if it constitutes a distinct and independent service unrelated to the other services performed on the same day. See MCM � 4630(D)(4). As noted, the CCI indicates that a synovectomy (CPT code 25116) is, under accepted standards of surgical practice, performed as a necessary or integral component of the fusion procedure described in CPT code 25810. Consequently, separate payment may be made under modifier -59 only if the synovectomy constitutes a distinct and independent procedure unrelated or not integral or necessary to the successful completion of the fusion. This issue was not addressed by Dr. Taleisnik, the beneficiary's surgeon, in his correspondence with the Council. In particular, he did not assert that the synovectomy was not essential or integral to accomplishing the fusion. Nor did he show that accepted standards of surgical practice required that the synovectomy be considered a separately payable procedure, rather than a component of the fusion, in view of the beneficiary's condition. We therefore cannot find that HCC is entitled to separate payment for the synovectomy under modifier -59.

In his February 28, 2003 letter, Dr. Taleisnik asserted that CPT code 25810 was intended to report a wrist fusion procedure for patients with posttraumatic changes, and not for fusions performed on patients, like the beneficiary, who have rheumatoid arthritis or other inflammatory synovitis. Dr. Taleisnik also asserted that fusions performed on patients with rheumatoid arthritis and synovitis are typically more complex and time consuming. We accept this assertion as true but note that HCC's payment for the fusion reflected the added time and complexity because CPT code 25810 was billed with modifier -22. (See Exh. 1). Modifier -22 is properly used when a procedure involves greater than normal complexity or other unusual circumstances. MCM �� 4822(A)(10) and 15028.


Based on the analysis above, the Medicare Appeals Council finds that no payment may be made under Medicare Part B for (1) the services of an assistant-at-surgery under HCPCS codes 25248 and 64721, or (2) the services billed under HCPCS code 25116.


Date: July 1, 2003


Thomas E. Herrmann
Administrative Appeals Judge

Bruce Gipe
Administrative Appeals Judge


1. In response to our notice of own motion review in the Chaplin case, HCC requested the opportunity to present oral argument. We denied the request in a November 8, 2002 letter. In a November 18, 2002 letter, HCC asked us to reconsider our decision to forego oral argument. We gave further consideration to the request but again concluded that oral argument was not necessary to help us reach a proper decision. Our reasons for denying oral argument apply to this case as well.

2. This provision is codified in the regulations at 42 CFR 411.15(n).