Published 9/1/2009
Margaret M. Maley, BSN, MS

Reporting complications does not need to be complicated

Treating surgical complications can be difficult, but reporting them can be straightforward—particularly if you have a thorough understanding of modifier 78. The definition of modifier 78 is an “unplanned return to the operating/procedure room by the same physician following initial procedure for a related procedure during the postoperative period.”

The following example can provide a better understanding of how to use modifier 78.

A dislocated THA
Dr. Joint performs a total hip arthroplasty (THA) on MM, a Medicare beneficiary, on Jan. 10, 2009. On April 20, 2009, the hip dislocates as MM is rising from a chair. Dr. Joint returns MM to the operating room and performs a closed reduction of the artificial hip under general anesthesia. This treatment should be reported using code 27266, “Closed treatment of post hip arthroplasty dislocation; requiring regional or general anesthesia.”

No modifier is appended because the reduction—while unplanned, done in an operating room, and directly associated with the performance of the initial procedure—was performed outside the global period of the original THA. The surgeon can expect to receive 100 percent of the allowable reimbursement for 27266, which includes related follow-up care for a designated number of days (90-day global period for Medicare).

If the dislocation had occurred on March 10, 2009, however, Modifier 78 would have been required because the associated treatment was within the global period of the original THA. This scenario would be reported as 27266-78.

Impact on reimbursement
Conventionally, modifier 78 results in a decrease in reimbursement assigned to the “intraoperative” portion of the case. For example, Medicare reduces reimbursement by 69 percent, but other payors may use a different percentage.

The other issue to remember is that appending modifier 78 to a procedure ties the global period to the original case. In the example above, the global period finishes 90 days from the original THA (performed on Jan. 10, 2009), not 90 days from the subsequent relocation (performed on March 10, 2009). This means that reporting follow-up care for reimbursement would begin on April 11—90 days from the original procedure.

Breaking down the definition
Modifier 78 is used to report the performance of a “related” procedure during the postoperative period, which means that the subsequent procedure is directly associated with the performance of the initial operation. In 2008, the American Medical Association added the word “unplanned” to the original description of modifier 78 to further differentiate it from modifier 58, which describes a planned return to the operating room. (See “
Ins and Outs of Modifier 58,” AAOS Now, May 2009.)

Because the use of Modifier 78 is not limited to inpatient procedures, the phrase “procedure room” was also added to the definition in 2008. Medicare only reimburses for complications treated in an operating room, which it defines as follows:

    “a place specifically equipped and staffed for the sole purpose of performing procedures. The term operating room includes a cardiac catheterization suite, a laser suite and an endoscopy suite. This does not include a patient room, a minor treatment room, a recovery room or an intensive care unit (unless the patient’s condition was so critical there would be insufficient time for transportation to an operating room.”

Although other payors may have different definitions, modifier 78 cannot be appended if treatment occurred in the patient’s hospital room. If, for example, MM dislocated her THA while getting out of her hospital bed on postoperative day 3 and Dr. Joint pulled the hip back into place at her bedside without regional or general anesthesia, treatment would not be reimbursable under Medicare.

Other payors may reimburse Dr. Joint, based on code 27265—closed treatment of post hip arthroplasty dislocation; without anesthesia. Modifier 78 would not be appended because this service was not performed in an operating/procedure room. Remember that Medicare includes the treatment of complications in the global period unless that complication is treated in an operating room and that modifier 78 does not reset the global period (ie, the global period does not start over because you are using modifier 78).

Under the Current Procedural Terminology definition of global package, “typical follow-up care is included in the global package.” The treatment of a post-arthroplasty dislocation is not typical follow-up care, but payment from non-Medicare carriers will vary depending on each carrier’s rules for inclusion in the global payment.

The phrase “by the same physician” was added to the definition of modifier 78 in 2008 to show that this modifier is only appropriate if the same physician (or one of the original physician’s partners) returns the patient to the operating room during the global period for an unanticipated, related procedure.

Finally, the definition of modifier 78 indicates that the related procedure must occur “during the postoperative period.” In the example above, if the THA is performed at 7 a.m., and the patient dislocates the implant at 4 p.m., modifier 78 is still appropriate. According to the CPT Assistant (February 2008), modifier 78 is appropriate to report the performance of another related procedure on the same day or during the postoperative period of the initial procedure. The CPT Insiders View 2008 agrees, noting that it is “appropriate use of modifier 78 to report a procedure performed on the same day (often occurring in emergent type complications).”

Use it correctly to avoid an audit
Understanding the correct use of modifier 78 is important for both orthopaedic surgeons and their staffs. Neglecting to append modifier 78 when appropriate could cause the entire procedure to be bundled into the global payment for the original surgery, resulting in no reimbursement at all. A clear understanding of how to use modifier 78 takes the confusion out of reporting the treatment of complications. Ignoring the correct use of modifiers—including modifier 78—can open the door to an audit under the Comprehensive Error Rate Testing, Office of the Inspector General, or Recovery Audit Contractor programs.

Margaret M. Maley, BSN, MS, is a consultant with KarenZupko & Associates. The information in this article has been reviewed for accuracy by AAOS Coding, Coverage, and Reimbursement Committee member Richard J. Friedman, MD, who also serves as AAOS advisor to the CPT Editorial Panel. If you have coding questions or would like to see a coding column on a specific topic, e-mail aaoscomm@aaos.org