HCPCS Level I Modifiers

HCPCS Level I (CPT) Modifiers:

Modifier - as the name implies these are the two digit code that modifies a service / procedure or an item under certain circumstances. Modifiers may add information or change the description according to the physician documentation to give more specificity for the service or procedure rendered. Appending of an appropriate modifier will effectively respond to reimbursement.

Level I Modifiers: Normally known as CPT Modifiers and consists of two numeric digits and are updated annually by AMA - American Medical Association. 

The above levels of Modifiers are recognized nationally.

Modifier -21 Prolonged Evaluation and Management Services (Deleted, please use CPT 99354 to 99359)

Modifier -22 Unusual Procedural Services

Modifier -23 Unusual Anesthesia

Modifier -24 Unrelated Evaluation and Management Service by the Same Physician during a Postoperative Period

Modifier -25 Significant, Separately Identifiable Evaluation and Management Service by the Same Physician on the Same Day of the Procedure or Other Service

Modifier -26 Professional Component 

Modifier -27 Multiple Outpatient Hospital E/M Encounters on the Same Date. 

Modifier -29 Global procedures, those procedures where one provider is responsible for both the professional and technical component. This modifier has been deleted. If a provider is billing for a global service, no modifier is necessary.

Modifier -32 Mandated Services

Modifier -33 Preventive Service

Modifier -47 Anesthesia by Surgeon

Modifier -50 Bilateral Procedure

Modifier -51 Multiple Procedures

Modifier -52 Reduced Services

Modifier -53 Discontinued Procedure

Modifier -54 Surgical Care Only

Modifier -55 Postoperative Management Only

Modifier -56 Preoperative Management Only

Modifier -57 Decision for Surgery

Modifier -58 Staged or Related Procedure or Service by the Same Physician During the Postoperative Period

Modifier -59 Distinct Procedural Service

Modifier -62 Two Surgeons

Modifier -63 Procedure Performed on Infants less than 4kg

Modifier -66 Surgical Team

Modifier -73 Discontinued Outpatient Hospital/Ambulatory Surgery Center (ASC) Procedure prior to the Administration of Anesthesia

Modifier -74 Discontinued Outpatient Hospital/Ambulatory Surgery Center (ASC) Procedure after Administration of Anesthesia

Modifier -76 Repeat Procedure by Same Physician

Modifier -77 Repeat Procedure by Another Physician

Modifier -78 Return to the Operating Room for a Related Procedure During the Postoperative Period

Modifier -79 Unrelated Procedure or Service by the Same Physician During the Postoperative Period

Modifier -80 Assistant Surgeon

Modifier -81 Minimum Assistant Surgeon

Modifier -82 Assistant Surgeon (when qualified resident surgeon not available)

Modifier -90 Reference (Outside) Laboratory

Modifier -91 Repeat Clinical Diagnostic Laboratory Test

Modifier -92 Alternative Laboratory Platform Testing

Modifier -99 Multiple Modifiers

Please note: It is also necessary to check the respective insurance guidelines for appropriate usage of Modifiers to avoid denials. 

           

HCPCS Level II Modifiers

HCPCS Level II Modifiers:

Modifier - as the name implies these are the two digit code that modifies a service / procedure or an item under certain circumstances. Modifiers may add information or change the description according to the physician documentation to give more specificity for the service or procedure rendered. Appending of an appropriate modifier will effectively respond to reimbursement.

 Level II Modifiers: Normally known as HCPCS Modifiers and consists of two digits (Alpha / Alphanumeric characters) in the sequence AA through VP. These modifiers are annually updated by CMS - Centres for Medicare and Medicaid Services.

The above levels of Modifiers are recognized nationally.

AA - Anesthesia services personally performed by anesthesiologist.

 

AD - Medical supervision by a physician: More than 4 concurrent anesthesia procedures.


AE - Registered Dietician


AF - Specialty Physician


AG - Primary Physician


AH - Clinical Psychologist


AI - Principal Physician of Record


AJ - Clinical Social Worker


AK - Non Participating Physician


AM - Physician, team member service


AP - Determination of refractive state was not performed in the course of diagnostic ophthalmological examination.


AQ - Service performed in a Health Professional Shortage Area


AR - Physician providing services in a physician scarcity area


AS - Physician Assistant, Nurse Practitioner, or Clinical Nurse Specialist services for assistant-at-surgery, non-team member.


AT - Acute treatment (chiropractic claims) - This modifier should be used when reporting CPT codes 98940, 98941, 98942 or 98943 for acute treatment.


AX - Item furnished in conjunction with dialysis services


AY - Item or service furnished to an ESRD patient that is not for the treatment of ERSD


AZ - Physician providing a service in a dental Health Professional Shortage Area for the purpose of an Electronic Health Record Incentive Payment


A1 - Dressing for one wound


A2 - Dressing for two wounds


A3 - Dressing for three wounds


A4 - Dressing for four wounds


A5 - Dressing for five wounds


A6 - Dressing for six wounds


A7 - Dressing for seven wounds


A8 - Dressing for eight wounds


A9 - Dressing for nine or more wounds


BA - Item furnished in conjunction with parenteral enteral nutrition (PEN) services


BL - Special Acquisition of blood and blood products


CA - Procedure payable only in the inpatient setting when performed emergently on an outpatient who expires prior to admission.


CB - Services ordered by a dialysis facility physician as part of the ESRD beneficiary's dialysis benefit.


CC - Procedure code change- CARRIER USE ONLY - Used by carrier to indicate that the procedure code submitted was changed either for administrative reasons or because an incorrect code was filed. 


Automated Multi-Channel Chemistry (AMCC) Tests Modifiers - Effective date: Claims processed on or after April 5, 2010


CD – AMCC test has been ordered by an ESRD facility or MCP physician that is part of the composite rate and is not separately billable.


CE – AMCC tests has been ordered by an ESRD facility or MCP physician that is a composite rate test but is beyond the normal frequency covered under the rate and is separately reimbursable based on medical necessity.


CF – AMCC tests has been ordered by an ESRD facility or MCP physician that is not part of the composite rate and is separately billable.


Reference: http://www.cms.gov/MLNMattersArticles/downloads/MM6683.pdf


CR - Catastrophe/Disaster Related


CS - Item or service related, in whole or in part, to an illness, injury, or condition that was caused by or exacerbated by the effects, direct or indirect, of the 2010 oil spill in the Gulf of Mexico, including but not limited to subsequent clean-up activities.


DA - Oral health assessment by a licensed Health Professional other than a dentist


EA - Erythropetic stimulating agent (ESA) administered to treat anemia due to anti-cancer chemotherapy.


EB - Erythropetic stimulating agent (ESA) administered to treat anemia due to anti-cancer radiotherapy.


EC - Erythropetic stimulating agent (ESA) administered to treat anemia not due to anti-cancer radiotherapy or anti-cancer chemotherapy.


ED - Hematocrit level has exceeded 39% (or Hemoglobin level has exceeded 13.0 G/DL) for 3 or more consecutive billing cycles immediately prior to and including the current cycle


EE - Hematocrit level has not exceeded 39% (or Hemoglobin level has not exceeded 13.0 G/DL) for 3 or more consecutive billing cycles immediately prior to and including the current cycle.


E1 - Upper left, eyelid


E2 - Lower left, eyelid


E3 - Upper right, eyelid


E4 - Lower right, eyelid


EJ - Subsequent claims for a defined course of therapy, e.g., EPO, sodium hyaluronate, infliximab.


EM - Emergency reserve supply (for ESRD benefit only)


ET - Emergency treatment - Use to designate a dental procedure performed in an emergency situation.


FA - Left hand, thumb


F1 - Left hand, second digit


F2 - Left hand, third digit


F3 - Left hand, fourth digit


F4 - Left hand, fifth digit


F5 - Right hand, thumb


F6 - Right hand, second digit


F7 - Right hand, third digit


F8 - Right hand, fourth digit


F9 - Right hand, fifth digit


FB - Item provided without cost to provider, supplier or practitioner, or credit received for replaced device (examples, but not limited to covered under warranty, replaced due to defect, free samples)


FC - Partial credit received for replaced device


G7 - Pregnancy resulted from rape or incest or pregnancy certified by physician as life threatening


GA - Waiver of liability statement on file - Use to indicate that the physician's office has a signed advance notice retained in the patient's medical record.The notice is for services that may be denied by Medicare.


GC - This service has been performed in part by a resident under the direction of a teaching physician.


GD - Units of service exceeds medically unlikely edit value and represents reasonable and necessary services.


GE - This service has been performed by a resident without the presence of a teaching physician under the primary care exception.


GG - Diagnostic Mammography - Use to indicated performance and payment of a screening mammography and diagnostic mammography on same patient, on the same day.


GH - Diagnostic mammogram converted from screening mammogram on same day


GJ - Opted Out physician or practitioner - Use to indicate services performed in an emergency or urgent service.


GM - Multiple patients on one ambulance trip


GN - Services delivered under an outpatient speech language pathology plan of care.


GO - Services delivered under an outpatient occupational therapy plan of care.


GP - Services delivered under an outpatient physical therapy plan of care.


GQ - Telehealth services via asynchronous telecommunications system


GR - This service was performed in whole or in part by a resident in a department of Veterans Affairs Medical Center or clinic supervised in accordance with VA policy.


GS - Dosage of EPO or Darbepoietin Alfa has been reduced and maintained in response to hematocrit or hemoglobin level.


GT - Telehealth services via interactive audio and video telecommunication systems


GU - Waiver of liability statement issued as required by a payer policy, routine notice


GV - Attending physician not employed or paid under agreement by the patient's hospice provider.


GW - Service not related to the hospice patient's terminal condition.


GY - Use to indicate when an item or service statutorily excluded or does not meet the definition of any Medicare benefit.


GZ - Use to indicate when an item or service expected to be denied as not reasonable and necessary.Used when no Advanced Beneficiary Notice (ABN) signed by the beneficiary.


J1 - Competitive Acquisition Program, no-pay submission for a prescription number


J2 - Competitive Acquisition Program, restocking of emergency drugs after emergency administration


J3 - Competitive Acquisition Program, (CAP) drug not available through CAP as written, reimburse under ASP Methodology


JA - Administered intravenously


JB - Administered subcutaneoulsly


JC - Skin substitute used as a graft


JD - Skin substitute NOT used as a graft


KB - Beneficiary requested upgrade for ABN, more than 4 modifiers identified on claim 


KC - Replacement of special power wheelchair interface


KD - Drug or Biological infused through implanted DME


KE - Bid under round one of the DMEPOS competitive bidding program for use with non-competitive bid base equipment


KF - Item designated by FDA as Class III device


KM - Replacement of facial prosthesis - including new impression/moulage


KN - Replacement of facial prosthesis - Using previous master model


KX - Specific required documentation on file (used for DMERC providers)


KZ - New Coverage not implemented by managed care


LC - Left circumflex coronary artery


LD - Left anterior descending coronary artery


LR - Laboratory Round Trip.


LT - Left Side - Used to identify procedures performed on the left side of the body.


M2 - Medicare Secondary Payer


NB - Nebulizer system, any type, FDA-Cleared fo ruse with specific drug


NU - New equipment (DME)


P1 - A normal healthy patient


P2 - A patient with mild systemic disease


P3 - A patient with severe systemic disease


P4 - A patient with severe systemic disease that is a constant threat to life


P5 - A moribund patient who is not expected to survive without the operation


P6 - A declared brain-dead patient whose organs are being removed for donor purposes 


PA - Surgery Wrong Body Part


PB - Surgery Wrong Patient


PC - Wrong Surgery on Patient


Please refer http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM6718.pdf for proper usage of PA, PB and PC Modifiers


PD - Diagnostic or related non-diagnostic item or service provided in a wholly owned or wholly operated entity to a patient who is admitted as an inpatient within 3 days, or 1 day. (New modifier for the year 2012, Check for Usage and reimbursement)


PI - PET Tumor init tx strategy


PS - PET Tumor subsq tx strategy


PT - Colorectal cancer screening test; converted to diagnostic test or other procedure


Q0 - Investigational clinical service provided in a clinical research study that is in an approved clinical research study.


Q1 - Routine clinical service provided in a clinical research study that is in an approved clinical research study.


Q3 - Liver Kidney Donor Surgery and Related Services.


Q4 - Service for ordering/referring physician qualifies as a service exemption -


Q5 - Service furnished by a substitute physician under a reciprocal billing arrangement


Q6 - Service furnished by a locum tenens physician


Q7 - One CLASS A finding


Q8 - Two CLASS B findings


Q9 - One CLASS B and two CLASS C findings


QA - FDA Investigational device exemption (IDE) - The IDE project number must be included on the claim when modifier QA is billed.


QB - Physician service in a rural HPSA.


QC - Single channel monitoring.


QD - Recording and storage in solid state memory by a digital recorder.


QJ - Services/items provided to a prisoner or patient instate or local custody.


QK -  Medical direction of 2, 3 or 4 concurrent anesthesia procedures involving qualified individuals.


QL - Patient pronounced dead after ambulance called

QM - Ambulance service provided under arrangement by a provider of services


QN - Ambulance service furnished directly by a provider of services

QP - Panel test - Documentation is on file showing that the laboratory test(s) was ordered individually or ordered as a CPT-recognized panel other than automated profile codes.


QS - Monitored anesthesia care


QT - Recording and storage on tape by an analog tape recorder.


QU - Physician service in an urban HPSA.


QV - Item or service provided as routine care in a medical qualifying clinical trial


QW - CLIA Waived Test - Effective October 1, 1996, all new waived tests are being assigned a CPT code (in lieu of a temporary five-digit G- or Q-code).


QX - CRNA service with medical direction by physician.


QY - Medical direction of one certified registered nurse anesthetist (CRNA) by an anesthesiologist.


QZ - CRNA service without medical direction by a physician.


RA -  Replacement of a DME item, Orthotic or Prosthetic Item
 

RB - Replacement of a Part of DME, Orthotic or Prosthetic Item furnished as Part of a Repair


RC - Right coronary artery


RD - Drug provided to beneficiary, but not, administrated incident-to


RE - Furnished in full compliance with FDA-Mandated Risk Evaluation and Mitigation Strategy (REMS)


RP - Replacement and repair


RT  - Right Side - Used to identify procedures performed on the right side of the body. 


RR - Rental (use the RR modifier when DME is a rental)


SC - Medically necessary service or supply (w.e.f Jan 1, 2012)

SF - Second opinion ordered by a Professional Review Organization (PRO) per section 9401, P.L. 99-272 (100 % reimbursement – no Medicare deductible or coinsurance)

SG - Ambulatory Surgical Center (ASC) modifier 
 

SK - Member of high risk population (Use only with codes for immunization)

SS - Home infusion services provided in the infusion suite of the IV therapy provider


SW - Services provided by a certified diabetes educator

TA - Left foot, great toe

T1 - Left foot, second digit

T2 - Left foot, third digit

T3 - Left foot, fourth digit

T4 - Left foot, fifth digit

T5 - Right foot, great toe

T6 - Right foot, second digit

T7 - Right foot, third digit

T8 - Right foot, fourth digit

T9 - Right foot, fifth digit

TC - Technical component only - Use to indicate the technical part of a diagnostic procedure performed.

TS - Follow-up service

UE - Used durable medical equipment

UN - Portable X-ray Modifiers; two patients

UP - Portable X-ray Modifiers; three patients

UQ - Portable X-ray Modifiers; four patients

UR - Portable X-ray Modifiers; five patients

US - Portable X-ray Modifiers; six patients 

V1 Level of MMI for Treating Doctor - This modifier would be added to the "Work related or medical disability examination by the treating physician..." CPT code 99455 when the office visit level of service is equal to a "minimal" level. 


V2 Level of MMI for Treating Doctor - This modifier would be added to the "Work related or medical disability examination by the treating physician..." CPT code 99455 when the office visit level of service is equal to "self limited or minor" level. 


V3 Level of MMI for Treating Doctor - This modifier would be added to the "Work related or medical disability examination by the treating physician..." CPT code 99455 when the office visit level of service is equal to "low to moderate" level. 


V4 Level of MMI for Treating Doctor - This modifier would be added to the "Work related or medical disability examination by the treating physician..." CPT code 99455 when the office visit level of service is equal to "moderate to high severity" level and of at least 25 minutes duration. 


V5 Level of MMI for Treating Doctor - This modifier would be added to the "Work related or medical disability examination by the treating physician..." CPT code 99455 when the office visit level of service is equal to "moderate to high severity" level and of at least 45 minutes duration.


V5 - Any Vascular Catheter (alone or with any other vascular access) - Part A only modifier

V6 - Arteriovenous Graft (or other vascular access not including a vascular catheter) - Part A only modifier

V7 - Afteriovenous Fistula (or other vascular access not including a vascular catheter) - Part A only modifier

V8 - Dialysis related infection present during the billing month - Part A only modifier

V9 - No dialysis related infection present during the billing month - Part A only modifier

VR - Review report - This modifier shall be added to the "Work related or medical disability examination by the treating physician..." CPT code 99455 to indicate that the service was the treating doctor's review of report(s) only. 

Modifier ZA - (Anesthesia modifier especially used for Medi-cal insurance of California) denotes prone position or surgical field avoidance. To be used only for procedures that have a base value of three (3) units. These techniques are included in the anesthesia base value of surgical procedures with a base value of more than three.

Modifier ZE - (Anesthesia modifier especially used for Medi-cal insurance of California) To be billed with the appropriate five-digit CPT-4 anesthesia code to identify a normal, uncomplicated anesthesia provided by a Certified Registered Nurse Anesthetist (CRNA).

Please note: It is also necessary to check the respective insurance guidelines for appropriate usage of Modifiers to avoid denials. 

General Coding References

General coding References on the Web:

Online Pathophysiology references

Knowing pathology and disease processes and treatments is crucial for coding and Part I

of the CCS exam; this site is Merk Manual online and it specifies pathophysiology,

symptoms/signs, treatment and more for a myriad of conditions.

http://www.merck.com/mrkshared/mmanual/tables/296tb2.jsp

Anatomy: (there are plenty of sites including Gray’s Anatomy)

http://www.bartleby.com/107/

http://mywebpages.comcast.net/wnor/homepage.htm

http://www.netterimages.com

Pharmacology References:

www.pdr.net

www.rxlist.com

http://www.nlm.nih.gov/medlineplus/druginformation.html

Abbreviation/Acronym website:

http://www.acronymfinder.com

Online Medical Dictionary websites:

http://www.medlineplus.com

(this site is rich with great sources: encyclopedia, medical dictionary, etc.)

and there is an online Dorland’s

 http://www.dorlands.com/wsearch.jsp

General Surgery/Procedure references:

http://www.mercksource.com/pp/us/cns/cns_hl_adam.jspzQzpgzEzzSzppdocszSzuszSzcnszSzcontentzSzadamzSzencyzSzarticlezSzsurgidxazPzhtm

http://www.yoursurgery.com

http://www.vesalius.com

http://www.or-live.com/upcomingBroadcasts.cfm

http://www.nlm.nih.gov/medlineplus/surgeryvideos.html

Medical Terminology: Knowing medical terminology is very crucial to medical coding;

one can figure out the meaning of a complex procedural term just by breaking down the

term into the prefix, suffix, etc and applying the meaning of each; check the full list of

prefix's & suffix's.

http://www.mtworld.com/tools_resources/root_words.php?letter=all

CCS Exam Cancelled in India

CCS Exam Cancelled in India

We're reaching out to you today with important information about the CCS
exam you have scheduled/ are authorized to test.

The Commission on Certification for Health Informatics and Information
Management (CCHIIM) is suspending administration of the Certified Coding
Specialist (CCS) examination in your country. CCHIIM has sole and independent authority in all matters pertaining to the certification of Health Informatics and Information Management professionals.

This action has been taken due to concerns over exam security and will continue until the security and integrity of the CCS exam is once again ensured. 

As a result, your upcoming CCS exam appointment is being cancelled, but
your exam fee will be completely refunded. 

In addition, you will be contacted once the CSS exam is again made
available so you can reschedule your test. 

As always, if it is determined that any individuals have been involved in a breach of exam security or any other exam-related irregular behavior, CCHIIM will take appropriate action-which may include cancellation of exam scores, revocation of certification, permanent denial of future eligibility for certification, and legal action.

We regret any inconvenience to you resulting from this action. However, we're taking these measures to ensure that the CCS credential maintains its value within the healthcare industry and continues to represent our commitment to protecting public health. 

For more information about this matter, you may contact:
certification@ahima.org

New ICD-10 deadline will be Oct. 1, 2014

New ICD-10 deadline will be Oct. 1, 2014

Washington Federal health officials are using an administrative simplification rule to propose delaying by one year the implementation of new diagnosis coding sets used for billing medical services.

ICD-10 diagnosis codes would be required for billing physician services starting on Oct. 1, 2014, according to the April 9 proposed rule from the Dept. of Health and Human Services. Currently, doctors and hospitals use the ICD-9 standard, which contains far fewer individual codes but also permits less specificity when making diagnoses. The proposed rule is expected to be finalized this year after a 30-day comment period.

The American Medical Association led the movement to push off the ICD-10 implementation deadline, citing concerns about doctors’ ability to be compliant by Oct. 1, 2013. The substantial number of new codes that must be learned, combined with initial problems with implementing the new 5010 electronic transaction standards that are a prerequisite for taking on the new code sets, presented a substantial burden for physician offices, the AMA said.

Physicians also were being asked to meet several other quality and health information technology initiatives at the same time as the coding upgrade, including adoption of electronic health records and participation in the physician quality reporting system. The October 2013 deadline would have come at a particularly inopportune time, the Association has said.

Marilyn Tavenner, acting administrator of the Centers for Medicare & Medicaid Services, signaled to physicians that HHS was re-evaluating the ICD-10 deadline during the AMA National Advocacy Conference in Washington on Feb. 14, but she did not indicate how long the implementation delay would be. The proposed rule formalizes the one-year delay and a plan to establish a unique identifier for health plans.

The proposed rule is the latest in a series of administrative simplification policies authorized by the national health system reform law. HHS estimates that cutting red tape for health professionals and plans will save them up to $4.6 billion in administrative costs during the next decade.

Requiring each health plan to have a single, unique identifier is designed to eliminate problems that arise when plans and other third-party administrators use different identifiers that lack a standard length or format. This can result in processing, payment or eligibility mix-ups, HHS said.

“These important simplifications will mean doctors can spend less time filling out forms and more time seeing patients,” HHS Secretary Kathleen Sebelius said in a statement.

ICD-10 to ICD-11

Why we can't skip ICD-10 and go straight to ICD-11 

Since the recent announcement by CMS that ICD-10 implementation will be delayed for certain healthcare entities, some industry pundits have argued, "Let's just skip ICD-10 and go straight to ICD-11."

Skipping ICD-10 assumes that we haven’t started implementing ICD-10. Well, the U.S. did start—19 years ago.

What have we been doing for the last 19 years?

Federal agencies kicked off ICD-10 implementation in 1993 by preparing to develop a clinical modification of ICD-10 (a U.S. version), then getting a grant and assigning a contractor to develop a clinical modification. Ditto for a procedure coding system.

There were extensive comment periods for both systems, testing of both systems, more comment periods, preliminary crosswalks, adoption of the WHO version of ICD-10 for mortality reporting in 1999, pilot studies, cost analysis studies, coding guidelines and references published, letters urging the adoption of ICD-10 as a HIPAA standard, hearings, and public domain mappings.

There were programs launched to train ICD-10 trainers and a CMS pilot project to convert MS-DRGs, more letters and ICD-10 industry conferences.

Then came the proposed rule, final rule, adoption of HIPAA 5010 in part to accommodate ICD-10 codes, then extensive government outreach programs, and ICD-10 MS-DRG grouper pilot software released for testing, followed by many, many payment, code edit, and care management systems converted to ICD-10.

The quality measures were converted; there was 5010 preparation, more outreach and education, and modifications to both ICD-10 code sets via public process every year since 2003.

And, of course, don’t forget advocacy or resistance from one or another sector of the industry at and between every step taken above and still going on.

Changing from ICD-9 to ICD-10 is not something that just happens on a certain date. To drag this lumbering, squabbling bunch of groups that form the U.S. healthcare system to undertake a change of this magnitude takes time. We can’t skip ICD-10 because we have already spent 19 years getting this close to implementing ICD-10. (2013 would have made it an even 20, a milestone for an effort that began the year the World Wide Web was born!)

It has taken us 19 years to get this far. Unless we willfully ignore our own human nature, we should expect the same slow-mo street fight to implement ICD-11, lasting roughly two decades. This letter (PDF) from the National Committee on Vital and Health Statistics contains an excellent 20-year history of ICD-10 in this country.

We could have skipped ICD-10 in 1993—it’s a bit late now.

Let’s go ahead and implement ICD-10 in 2013 or 2014, and decide now to implement ICD-11 in 2024. Maybe if the healthcare industry sets the timeline up front, we could cut the implementation timeline in half. Planning now for ICD-11 would have the added benefit of establishing a new expectation in the industry—that regular upgrades to any system that facilitates the exchange of data is normal and expected. Postponement as a strategy for doing nothing will not fly any more.

Sutherland, Genpacte Eye Apollo BPO

Sutherland, Genpact eye Apollo BPO

MUMBAI: Back office majors Sutherland Global Services and Genpact are in the final race to acquire Apollo Health Street, the healthcare business process outsourcing (BPO) arm of Apollo Hospitals, in a deal valued at over Rs 1,100 crore ($220 million), said two separate sources briefed on the matter.

Sutherland, which has put in a higher bid, may be the front-runner to buy the asset even though both contenders are completing the due diligence process. Apollo Hospitals and associates hold about 54% stake, while Temasek Holdings, One Equity Partners and other financial investors have the remaining shares in the 12-year-old BPO firm. Barclays and Kotak Mahindra Capital are advising the promoters on the potential sale process.

The transaction is expected to value Apollo Health Street at about two times revenue , which is estimated at a little over $100 million. Apollo counts the BPO unit as a noncore investment and has been open to divesting its interest, though in the past it has stated intention to retain part of the shareholding. "We are open to strategic partnerships but there is nothing as yet," said a top Apollo executive, who didn't want to come on record. One of the sources mentioned earlier said Apollo may decide to fully exit or retain a stake.

"It can still swing both ways," he added.

Apollo Health Street takes up the outsourced financial and technology work for the big healthcare service providers , helping them to run profitable and efficient operations . It has 12 delivery locations , including four in India. The Prathap C Reddy family owned Apollo Hospitals is India's largest healthcare service provider with a network of 54 hospitals.

A Genpact spokesperson declined to comment on speculation, while an emailed query to Sutherland remained unanswered at the time of going to press.

The acquisition may help players like Sutherland and Genpact to scale up in the healthcare BPO market, which is expected to benefit from US president Barack Obama's reforms extending insurance cover to more Americans and the transitioning to an advanced classification of disease coding. The combined opportunity pool could be as big as $20 billion in the next five years.

BPO biggies like the $1.6-billion Genpact have been on the prowl for buyouts to bolster business verticals like healthcare and insurance. Last year, the NYSE-listed firm acquired Headstrong and EmPower Research, as part of a plan to expand consulting and business research practices.

The privately-held Sutherland , backed by Standard Chartered Private Equity and Oak Investment Partners, was founded by ex-Xerox employee Raj Vellodi in 1986. Its clients are from the retail, banking, insurance, healthcare, telecommunications and travel & hospitality sectors, and have global delivery centres in United States, Canada, Mexico, Philippines, United Kingdom and India, employing 25,000 people.