Podiatry Medical Billing for Medicare: Unbundling

When a medical biller sends a bill to Medicare, there are a number of guidelines that the biller — sometimes the physician, sometimes an outsourced medical biller — must follow. One of the guidelines involves a technique called ‘unbundling’, which is the trick of breaking a procedure down into its component parts in order to increase the amount of money the procedure will pay out. One classic example of unbundling often cited is called the hammertoe procedure.

A hammertoe procedure is coded 28285. A hammertoe correction consists of:

  • Anesthesia, usually local but sometimes general if other procedures are scheduled for the same operation.
  • An excision of a portion of the toe bone.
  • Possibly, the fusion or fixation of the toe with a K-wire or pin.
  • Skin and/or soft tissue correction, repair, incision, or excision at the joints — many times several such operations in rapid succession.
  • Possibly a matrix correction or a interphalangeal implant.

Now, each of these component parts has its own medical code. For example, the matrix correction, if performed alone, would usually be coded 11750. Derotation of the 5th toe is often coded as 14040. But if you were to separate out these individual parts and code them separately from the overall hammertoe procedure code (28285), you would be breaking the law. All of the above procedures are considered part and parcel of a ‘proper’ hammertoe procedure, and all of them are billed under the hammertoe code.

Of course, Medicare bills first and audits later, which means if you did unbundle those procedures and bill thusly, you would still get paid, and you’d get overpaid because of your unbundling. What happens next is the painful part: Medicare will come back and audit your records some months later, and you (or the podiatry specialist you billed for, if you’re a professional medical biller) will have to pay back all of the money that Medicare paid out for the entire hammertoe procedure, plus a hefty fine to make sure you don’t do it again.

The rule is simple: find the procedure code that best encompasses all of the exact techniques that were used in your patient’s treatment, and bill for that. The only exception: if multiple substantially different and unrelated procedures are performed in a single operation, they can be billed separately — otherwise, send one code for one procedure, plain and simple.

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