In 2006, CMS (Centers for Medicare Services) established a National Coverage Determination for Bariatric Surgery that included coverage of the laparoscopic adjustable gastric band placement (CPT code 43770) as an inpatient procedure in Hospitals designated as Center of Excellence by the ASMBS or ACS level 1. Since then, this procedure has not been covered in outpatient basis until this year.

As of January 1, 2012, CMS has removed CPT code 43770 (Laparoscopy, surgical, gastric restrictive procedure; placement of adjustable gastric restrictive device) from the inpatient-only list. This means that now this procedure can be done in either an outpatient or inpatient basis in Medicare patients as medically indicated.

Medicare payments to facilities for inpatient procedures usually are based on DRG’s. The equivalent of DRGs in outpatient surgical procedures are called APCs or Ambulatory Payment Classifications.  APCs are the government’s method of paying for facility outpatient services for the Medicare program. APC only affects facilities and apply to outpatient surgery and other outpatient services. Each outpatient procedure CPT code that is approved for reimbursement is assigned a “level” of payment. For example, the laparoscopic fundoplasty for reflux (CPT code 43280) has an assigned APC Level III Laparoscopy payment for the facility that has a payment rate of approximately  $5,000. The CPT code 43770 for band placement was assigned an APC Level II Laparoscopy payment that has a payment rate of approximately $3,400 for the facility. As you can see, this low payment is not sufficient to pay for both the cost of the device and the facility cost for the procedure. The ASMBS will be sending a request to CMS to re-evaluate this decision to upgrade the payment for this procedure to a Level III Laparoscopy that has a work value similar to the laparoscopic fundoplasty, and also request additional payment for the device.

It is very important to remember that the band placement can still be performed as an inpatient procedure on Medicare patients and payments will be based on the appropriate DRG for bariatric surgery.  Consult your utilization review personnel to assure accurate status and prevent inadvertent overpayment.

ASMBS Insurance Committee