Corporate Compliance

Note from Hugh

Medicare Insider, June 3, 2008

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This week CMS released the July update to the Integrated Outpatient Code Editor. One change, which may result in significant claims delays for providers, relates to a change in the disposition for edit number 50 (“Non-covered based on statutory exclusion”). In the July OCE, the disposition for this edit was changed from a line item rejection to “RTP” or return to provider. This change may relate to recent changes to the revenue code 0637 for self administered drugs.
In the January OCE, CMS changed the status indicator for revenue code 0637 from “N” for packaged items or services to “E” for items or services not covered based on a number of reasons, including statutory exclusion. This change was discussed on the January 31, 2008 Hospital Open Door Forum when a caller reported that it was causing claims to be returned to them for addition of a HCPCS code on the items with revenue code 0637. Although not entirely clear from the OCE, this was apparently because edit number 48 (“Revenue center requires HCPCS code”) was being applied.
As promised in the January Open Door Forum, in the April OCE CMS added programming to bypass edit 48 for items under revenue code 0637 billed without a HCPCS code and trigger edit number 50 instead. This change would allow all items billed in revenue code 0637 to trigger edit number 50 and cause a line item rejection whether billed with or without a HCPCS code.

The change in the July OCE will now cause a claim to be RTP’d to the provider for correction when edit number 50 is triggered—which with the changes from January and April will include all self administered drugs under revenue code 0637 with or without a HCPCS code.[1] The change in the July OCE may result in significant impact to providers billing any items under revenue code 0637 to Medicare. The prior disposition of “line item rejection” allowed the remainder of the claim to be processed for payment with the exception of the line being rejected. By changing the disposition to RTP, the entire claim will now be returned to the provider for correction and resubmission. This will result in significant delay of any claims with items billed in the 0637 revenue code.

[1] It is unclear the application of this edit to claims with all non-covered charges on lines with revenue code 0637 or lines with the GY modifier (“Item or service statutorily excluded, does not meet the definition of any Medicare benefit”), although presumably in these cases the lines would be processed as non-covered rather than be subject to edit 50.

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