Welcome to the new Outpatient Surgery website! Check out our login FAQs.
7 Keys to Adding Pain Management Services
What you need to know to begin hosting this high-demand specialty at your facility.
Amy Mowles
Publish Date: October 10, 2007   |  Tags:   Pain Management

Why are more and more surgical facilities treating the same patients over and over? Two words. Pain management. One benefit that pain management offers that other specialties lack is the repeat business that comes your way. Most surgeries are single events at your facility, whereas most pain management patients require multiple visits to your facility.

Above all else, pain management depends on a strong referral base and a good payer mix to succeed - even more so than other specialties. But done right, adding pain management can be a great revenue-enhancer. Here are tips on patient selection, reimbursement, equipment strategies and more.

Case volume
Volume considerations include types as well as the complexity and time involved in procedures performed. Usually anywhere from 1,700 to 2,200 separately billable procedures (not patient encounters) per year will support the expenses of one OR. As many pain procedures involve bilateral injections and/or multiple levels, each encounter can yield several full facility fees. The volume count starts with billable equivalents rather than patient encounters. Profitability increases dramatically as procedure volume goes beyond the break-even point.

Financial benefits and advantages of case cost versus reimbursement for surgery centers offering pain management can be significant. Most pain management procedures fall into Medicare Payment Group 1, which currently yields an unadjusted national allowance of $333. Medicare currently pays 100 percent of the highest payment for multiple procedures in a single session and 50 percent for each additional procedure. Most pain management procedures in an outpatient facility are well-paid - quick turnaround and relatively low cost per case with only a short recovery time needed. A pain management physician is generally able to perform as many as four procedures per hour with nursing and ancillary staff time being brief as well. A busy pain management physician typically tops 3,000 billable procedures in a year.

For other payers as well, centers that offer pain management often have an advantage. Managed care payers typically reimburse some percentage of Medicare's fee schedule. Off-list procedures are often paid at a percentage of billed charges or a flat rate that is often far more than a grouper 1 reimbursement.

To ballpark potential revenue, run a payer-mix report. Whenever you add services, review all your managed care contracts to identify the current fee schedule and list of covered services. Negotiations on the facility contract should incorporate exclusions as applicable. Determine payer policies on what's included in the facility fee rate. Some payers may reimburse for the technical component of fluoroscopy and drugs and supplies in addition to the flat rate for the facility fee. Commercial and workers' compensation plans can allow up to 300 percent of the Medicare facility fee schedule. However, some states have set facility fee schedules for workers' comp cases; Texas is now at 213 percent of the Medicare facility fee schedule while California is at 125 percent of the HOPD OPPS payment system.

Managing contracts
Get ready for lots of legwork here. You'll have to deal extensively with insurers who expect to pay for only one procedure per patient encounter regardless of the type of procedure. During the same encounter, physicians treat pain both bilaterally and at additional levels to get better results (and to avoid having to bring back the patient a month or even a day later to fit insurer requirements). This approach is both better for the patient and cost-effective for the carrier, which doesn't have to pay at 100 percent when the patient returns.

Those pain procedures that aren't on Medicare's payment list for ASC facility reimbursement fall under Medicare's site-of-service differential rule, meaning that professional fees are paid at the higher office site-of-service differential. As for facility fees, you can't bill a Medicare patient or ask him to sign an advanced beneficiary notice (ABN) or notice of exclusion of medicare benefits (NEMB) for facility fees when the procedures aren't on the approved list for a Medicare-covered procedure. Payment to the surgeon is inclusive of the entire procedure.

Physicians who don't own an interest in a surgical facility may wish to enter into a contractual agreement with the facility whereby they compensate the facility a market value fee to allow them to perform services on Medicare beneficiaries that aren't on the ASC covered list. Healthcare counsel should review all contractual agreements to ensure that they comply with all federal and state laws.

All commercial managed care contracts state how you may bill the patient for non-covered services. The contractual agreement usually requires that the provider notify the patient in writing before the procedure that his insurance plan won't cover a service and that the patient is expected to pay.

Your major expense when adding pain services is staffing, which typically accounts for 45 percent to 50 percent of overall operational costs. Your choice of staffing significantly affects your break-even point - even a 10 percent change in staff can yield a 4 percent to 5 percent change in profit.

For example, some state regulations let the surgeon operate the C-arm. This may save communications time and personnel costs. Those few minutes added to physician time could cost far less than having a certified X-ray technician remain in the OR throughout the procedure. Alternatively, many facilities find that a well-trained tech saves procedure time and enhances overall efficiency both pre-, intra- and post-procedure by positioning the patient and C-arm, setting the parameters of the machine, taking the films as well as turning over the room.

During the procedure, the RN who is monitoring the conscious sedation can't have any other duties. From cost and efficiency standpoints, a trained medical assistant or tech can help with supplies, prepare the room for the next patient, assist patients and take phone calls.

While monitored anesthesia care by a separate provider may be desirable in some procedures, local coverage determinations from Medicare carriers may preclude payment for such care for most patients. Some managed care facility contracts include anesthesia. If the contract proposal for the facility is inclusive of anesthesia, and most of your cases require the use of a separate anesthesia provider, this an opportunity for negotiation.

In adding pain services to an existing center, the only significant capital costs are for the C-arm and fluoroscopy table - if they're not already on site for other specialties and procedures. Many companies re-manufacture demo or used models and provide them with a good warranty for about half the cost of new ones.

Direct costs per pain management case might only relate to the epidural tray, injected drugs and contrast material. About $125,000 would cover

  • refurbished C-arm,
  • fixed-height basic imaging table,
  • RF unit,
  • patient monitoring equipment,
  • transportable stretcher,
  • recovery recliners,
  • crash cart package,
  • IV poles and
  • physician/nurses stools.

A change to the physical environment is unlikely if your facility is already certified to perform anesthesia services at a higher level than required for procedures performed with IV conscious sedation.

To calculate the costs associated with adding pain mitigation procedures, start with the cost of major medical equipment. Then include all drugs and supplies needed per case. Include costs of anesthesia type and coverage. Determine extra staffing additions such as more RN coverage or an X-ray tech. Then consider procedure time allotment for both the pre-op area, OR and recovery room. This is especially important when combining new specialties. For instance, a facility devoted to GI procedures that's accustomed to doing only two cases per hour will have to adjust to setting up for and scheduling a new specialty like pain management, which typically turns over four cases per hour.

Case selection
Things can get complicated here with certain invasive procedures that aren't covered in a group or when reimbursement is below actual cost. One such example is percutaneous disc decompression (CPT 62287), which is in Medicare Payment Group 9 with a national total reimbursement average of $1,366. The problem is that this procedure calls for a consumable percutaneous lumbar discectomy probe pass through code for the decompressor device (C-2614) that will be used once and costs up to $1,900. Medicare won't pay additional reimbursement for the device in any setting other than a hospital outpatient department. Otherwise, you'll have to negotiate a carveout for the device itself with other payers if the payment is less than the cost of performing the procedure. It's also imperative to review your Medicare carriers' local coverage determinations and other payers for their non-coverage policies. Insurers such as Aetna, Cigna and the majority of the Blues consider nucleoplasty investigational and have published non-coverage decisions. Trailblazers and Noridian Medicare Carriers for several states also don't cover this, believing it's inappropriate to bill the nucleoplasty. They require you to report nucleoplasty using the unlisted procedure code 64999. The result is a long delay to receive payment, if ever paid. Another procedure not on Medicare's covered list is vertebroplasty.

Another arena fraught with coverage difficulty is implantables, which are in Medicare Payment Group 2 with a national reimbursement average allowance of $446 for a 40-minute to 60-minute procedure, not to mention recovery room costs plus reimbursement for the cost of the device. Since patients who undergo an implant usually require more sedation for the procedure, a longer recovery period is required, usually more than 30 minutes. Your facility will likely spend more than it gets back for physician time and ancillary staff resources. Who pays for the device is questionable. Although the Medicare Coverage Manual lists drug-infusion pumps as durable medical equipment and codes 0783 appear on a DME fee schedule, CMS officials have stated that you should bill both drug-infusion pumps and spinal cord-stimulator devices to the Part B Carrier, not the DME carrier. Some pain pump manufacturers will provide and bill for the equipment, which is perhaps the best administrative option.

Decide the kinds of cases you want to take on. What are your revenue expectations per work hour or per work year? Imagine doing four cases in an hour that can generate multiple facility fees versus one case that generates a single facility fee with longer OR and recovery time. Some of those longer cases, while satisfying to complete, will bring in far less per hour than several short ones.

Block the same and similar procedures back to back. Set your goals for sets of four injections or blocks per hour, for example. Schedule a longer or more complicated case as the last case of the day with enough staff time allotted for recovery monitoring.

Patients are out there
What was once considered a mere inconvenience to the sufferer is now recognized as a serious national problem. Chronic pain - that lasts at least six months and doesn't respond to conventional medical treatments - not only reduces the quality of life for sufferers but also costs our economy more than $70 billion each year in lost productivity and medical costs. When you're ready to offer such services, marketing targeted to bone fide referral sources will produce all the patients you can handle.