Everyone is familiar with the way Medicare and many other payers reduce the allowed amount for surgical procedures when more than one procedure is performed in the same session. The second procedure is allowed at 50% of the usual amount. Did you know that Medicare has a similar, but not identical, reduction for ophthalmic diagnostic tests? Known as the Multiple Procedure Payment Reduction (MPPR),¹ this became effective for dates of service beginning January 1, 2013.

Q. What is the MPPR for diagnostic tests?

A. Medicare implemented a payment reduction when more than one test is performed at the same encounter. This payment policy reduces the technical component of the second and any subsequent ophthalmic diagnostic tests by 20% when more than one eligible diagnostic test is performed at a patient encounter on the same day by the same physician or group.

Q. Does this apply to all tests?

A. No. The list of tests² includes ultrasounds, imaging, and visual fields. Tests not on the list are not subject to the MPPR reduction. For example, any test that is personally performed by the physician, such as extended ophthalmoscopy, is excluded. Only tests listed in the Medicare Physician Fee Schedule (MPFS) with separate technical (-TC) and professional (-26) components are affected by the MPPR.

Q. How does it work?

A. Medicare looks at multiple tests for the same patient on the same day, identifies the test(s) with the lesser technical component value and applies the reduction.

Let’s look at an example.

Your colleague asks you to evaluate a 68-year-old man with blurred vision in both eyes; he is a type 1 diabetic and takes insulin. Your dilated fundus exam identifies proliferative diabetic retinopathy in both eyes, but no DME in either eye. You order fundus photography (FP) and fluorescein angiography (FA) of both eyes and document your findings in your report.

In 2017, Medicare payment for these 2 tests when done in the office would be as follows:

The payment reduction is taken only on the lesser of the two technical portions — which is the FA in this example. The professional component of the FP is lower than the FA — but professional services are unaffected by MPPR and paid in full for each test.

Q. How does this work if there are 3 tests on the same day?

A. If there were also a visual field test (VF) performed, the breakdown would look like this:

The payment reduction is applied to both the FA and VF, because they are the tests with lower-valued technical components. The FP is allowed in full.

Q. What should we look for on our Medicare Remittance Advice?

A. When the MPPR has been applied, the affected test(s) will show modifier 51 to indicate it was the test(s) on which the reduction was taken. Do not submit your claim with modifier 51; Medicare only shows this on the RA to show you how the MPPR was applied.

Q. Do we have to separate the TC/26 components of a test on our claim?

A. Fortunately, no. Medicare contractors do this automatically for all affected tests. RP

REFERENCES

1. CMS. Medicare Learning Network, MLN Matters MM7848, Eff. January 1, 2013. https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM7848.pdf . Link here. Accessed Aug. 28, 2017.
2. CMS Transmittal 1149, dated November 6, 2012, identifies the specific tests, by CPT code, that are subject to the MPPR. The Medicare Physician Fee Schedule multiple procedure indicator also identifies these codes each year (multiple procedure indicator 7). https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R1149OTN.pdf Link here. Accessed Aug. 28, 2017.