Multiple Procedure Payment Reductions: How to Stop Them from Draining Provider Revenue

With healthcare organizations operating on thin and even negative margins, CFOs and revenue cycle directors must scrutinize every threat to revenue. 

Multiple procedure payment reductions (MPPRs) threaten provider revenue. Medicare and some commercial payers enact MPPRs to pay less for a group of services than they would with those services tallied individually. 

Radiologists, cardiologists, physical therapists, and ophthalmologists are most at risk for MPPR revenue hits because they administer multiple services to the same patient, often during the same day. Still, to protect revenue, all healthcare providers need to watch how payers are grouping their services and applying MPPRs. 

Get clear on how you can find the multiple procedure payment reductions in your contracts, unleash best practices for limiting them, and use advanced contract management software to support your staff in getting the most revenue from your grouped procedures. 

What are multiple procedure payment reductions?

Multiple procedure payment reductions are the reimbursement decreases that payers apply when multiple services are performed for the same patient during the same session or on the same day. Payers make the assumption that providers achieve cost efficiencies when they perform services together. The MPPR is that if you provide multiple services in one visit, the payer should not be required to pay the practice expense at full rate for every service in the visit, since the first service covers their obligation. 

MPPR applies to both the technical component (TC) and professional component (PC). MPPRs can lower reimbursements from 7% to over 20% depending on the specific procedures and specialties involved. 

Medicare and Multiple Procedure Payment Reductions

Medicare calculates reimbursements based on CPT codes and their associated relative value units (RVUs), which include three components: practice expense, relative work, and malpractice expense. CMS reduces payment of the practice expense portion of all services by 50% for everything after the first unit (not the first CPT code) is paid in full.  The reduction can vary widely depending on the specific procedures and specialties involved. For example, a one-hour timed visit could face 15-20% reductions in reimbursement due to MPPR.

Private payers and Multiple Procedure Payment Reductions

Commercial insurance companies also apply MPPRs but have different rules. 

For instance, after paying in full for the first unit, some commercial insurance companies only pay 50% for the first additional procedure, and 25% for each additional procedure after two. Private payers also have different limits to the number of procedures that can be reimbursed in one session. Before signing a managed care contract, physician groups and MSOs should be fully aware of a payer's MPPR policy.

10 best practices to limit MPPRs

While multiple procedure payment reductions (MPPRs) can impact healthcare providers' revenue, there are effective strategies to mitigate their effects. By implementing these best practices, you optimize your billing processes, ensure compliance, and maximize reimbursements. The following key strategies help:

1. Appoint a compliance officer - Designate an individual to oversee MPPR compliance and coordination efforts across departments. The Health Care Compliance Association has a job board where you can find candidates. 
2. Develop Written Policies and Procedures - Create comprehensive guidelines that outline MPPR regulations and establish expectations for staff and leadership.
3. Optimize procedure ordering - Make sure clinical and RCM staff know to list the highest-value procedure first, followed by others in descending order of value. MPPR regulations can be intricate, with different payers having varying policies, making it challenging for staff to keep track of all the nuances. 
4. Implement robust auditing - Regularly audit billing practices to ensure compliance and maximize reimbursement under MPPR rules.
5. Leverage technology - Utilize advanced, AI- and automation-driven contract management software that can analyze payer contracts and automatically apply MPPR rules to reduce errors and optimize reimbursement. Be careful, however. Some billing software may not automatically list billed codes from most-to-least valued, requiring manual intervention that can introduce errors.
6. Educate staff - Ensure that all relevant staff members understand MPPR and its implications for coding and billing.
7. Stay updated on payer policies - Different payers may have varying MPPR rules. Be aware of these differences when negotiating managed care contracts. 
8. Use appropriate modifiers - While some Medicare carriers don't require modifier 51,  you should append it when applicable. Modifier 51 is applicable when multiple procedures (not E/M) are performed at the same session by the same provider. It should be appended to the second and subsequent procedures, with the most resource-intensive (highest-paying) procedure listed first, to indicate that multiple services were provided during a single treatment session.
9. Conduct Risk Assessments - Regularly evaluate processes to identify potential MPPR compliance vulnerabilities and implement mitigation strategies.
10. Monitor the impact - Use reporting tools to track the impact of MPPR on reimbursements. It takes this data to make informed decisions about adjustments to care plans and billing strategies.

With these best practices in place, you can start to view MPPR not as a regulatory hurdle but as an opportunity for greater revenue cycle efficiency. By accurately applying MPPR rules, organizations can minimize unnecessary revenue losses and maintain financial stability.

Most importantly, close MPPR management improves revenue by reducing claim denials via improved coding accuracy. Finally, the data from reporting tools tracks the impact of MPPR on reimbursements so that you can make effective, data-driven adjustments to care plans and billing strategies.

Contract management software and MPPRs

CFOs and revenue cycle directors would love to enjoy the above benefits if only they had the staff to implement best practices. With a rampant RCM staffing shortage and a wide variety of payer MPPR policies, many healthcare organizations turn to contract management software to stay current on payer contract changes as well as agreed-upon MPPR contract rates and terms. The contract management software you select to address MPPRs should have these features: 

1. Automated analysis - Your software should be able to automatically analyze payer contracts, including MPPR rules, ensuring providers know how these reductions apply to their services.

2. Real-time feedback - Get contract management systems that provide real-time feedback through smart log messages, helping staff understand and apply MPPR rules correctly. Real-time visibility into contract performance also allows for the immediate identification of issues like underpayment, contract violations, and missed opportunities for optimization. The Healthcare Financial Management Association (HFMA) and McKinsey urge providers to make use of real-time visibility to help optimize the revenue cycle.  
3. Modeling - Contract modeling tools measure the impact of payers’ proposed rate and term changes on provider revenue. Providers can also use contract modeling to enter their own preferred terms to determine their most favorable choices. This data gives providers the confidence and clarity to negotiate better rates with payers.
4. Compliance monitoring - Your contract management software should be able to automatically track regulatory updates and contract renewals, ensuring providers remain compliant with current MPPR policies.
5.  Underpayment identification - By comparing expected reimbursements against actual payments, the software can MPPRs, allowing providers to address healthcare underpayments promptly.
6. Streamlined workflows - The automation driving contract management software reduces manual intervention and the likelihood of human errors in applying MPPR rules, leading to more accurate billing. After identification, this software also automatically delegates tasks to the appropriate staff for reconciliation, avoiding manual, and time-intensive spreadsheet processes.

By leveraging contract management software, healthcare providers can better understand, track, and optimize their reimbursements in the face of MPPR policies, ultimately minimizing revenue loss and improving financial performance. 

Take a quick, self-guided tour through a powerful contract management and underpayments identification tool:

Multiple procedure payment reduction rules and contract negotiations

Understanding the nuances of MPPR rules across different payers is essential for healthcare organizations to secure favorable terms. As mentioned above, practices should thoroughly understand each payer's specific rules before signing a contract. These policies directly affect reimbursement rates, a key focus in negotiations. 

MPPR rules are often included in contract terms, and contract terms are often generated by payers. All terms require careful review and potential negotiation to ensure fair reimbursement. An MGMA Stat poll shows that 33% of providers fail to review their contracts yearly. In fact, 17% NEVER review them, and 16% review them every 2 to 3 years or more. Healthcare organizations have told us that they haven’t seen their contracts for five years. 

58% do review contracts annually – not bad. Still, most do not work up the critical insights that contract management software comes up with within minutes. 

Knowledge of competitor rates and payer-specific MPPR policies can provide valuable leverage during negotiations, allowing providers to justify competitive reimbursement rates. When negotiating, providers should consider their long-term goals, as this can influence how they approach MPPR-related terms in the contract. By thoroughly understanding and addressing payer-specific MPPR rules during contract negotiations, healthcare providers can work towards more favorable terms and optimize their reimbursements.

How to analyze MPPR rules’ impact on your revenue

MPPRs’ impact can vary depending on the specialty and procedure mix. For example, CT-heavy subspecialties like neuroradiology have seen substantial benefits from recent adjustments to MPPR regulations. A study from the American Journal of Neuroradiology showed that the rollback of MPPR from 25% to 5% for subsequent imaging resulted in a 12.1% increase in revenue, with neuroradiology experiencing the most significant gain. 

To analyze the financial impact of MPPRs on your practice, follow these steps:

1. Calculate the overall revenue reduction due to MPPR, which can be up to 7% for typical therapy practices.
2. Analyze your payer mix, focusing on Medicare and private insurers that have adopted MPPR policies.
3. Examine your procedure mix, identifying which services are most frequently subject to MPPR.
4. Assess the frequency of multiple procedures performed in a single session for individual patients.
5. Compare reimbursement rates before and after MPPR implementation for commonly performed procedures.
6. Evaluate the impact of MPPR on different specialties or divisions within your practice.
7. Consider the effect of MPPR on high-volume procedures, such as CT and MRI scans for radiology practices.
8. Analyze the percentage of procedures affected by MPPR for each imaging modality or service type.
9. Calculate the revenue loss for different numbers of procedures performed in a single day for individual patients.
10. Project the annual revenue impact based on historical data and current MPPR rates.

Use an MPPR calculator to make projections

As you examine the revenue impact of MPPRs, you may want to see (spreadsheet-free!) how your reimbursements change based on various factors. 

There’s an app for that!

The American Physical Therapy Association has developed a handy MPPR calculator that makes it easy to enter CPT codes – highest-cost first – and all subsequent CPT codes. We were able to quickly discover that, in Iowa, three commonly grouped physical therapy services (97110, 97140, 97116) entered individually would amount to a reimbursement of $83. When entered under the MPPR designation, reimbursement dropped to $71.23. Create an account to access this resource.

Broadriver Rehab of North Carolina has also devised an MPPR Calculator that doesn’t require account creation.  

Let MD Clarity help you limit your multiple procedure payment reductions

In an era of rising costs and labor shortages, optimizing reimbursements through effective MPPR management is not just a financial necessity but a key component of maintaining high-quality patient care. Healthcare leaders who proactively address MPPR challenges will be better positioned to navigate the complex healthcare landscape and ensure their organizations' financial sustainability.

RevFind, a contract performance solution by MD Clarity, thoroughly assesses MPPR and all payer stipulations, alerting you to those that threaten revenue. With all contract rates and terms digitized and analyzed, it compares them to each actual payment to make sure the two figures match. Should discrepancies occur, these are listed in a convenient, user-friendly dashboard for staff attention. This approach provides valuable insights for proactive negotiations and underpayment recovery. By identifying the root causes of payment issues, RevFind helps prevent future revenue losses.

The solution also empowers managed care contracting teams with advanced revenue modeling capabilities. Modeling allows providers to evaluate the financial impact of proposed rate changes and simulate various scenarios to understand how different combinations of rates and terms impact revenue. With modeling, you don’t have to trust the payer’s word. You can see what a 1% rate change really means. This data-driven approach strengthens negotiating positions and helps avoid unfavorable contract terms.

Get a demo to see how RevFind can assist you examine MPPR rules and request the right changes to limit them.  

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