Corporate Compliance

Note: Medically Unlikely Edits and ABNs

Medicare Insider, April 21, 2009

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This was an especially light week for items from CMS for hospitals. This is, perhaps, because shortly we should see the FY2010 Inpatient Prospective Payment System Proposed Rule.

I did want to discuss a new FAQ on Medically Unlikely Edits (MUEs) that brings up some questions. The new FAQ focuses on Advanced Beneficiary Notices (ABNs), pointing out that a beneficiary can not be billed for units in excess of an MUE even if the provider issues an ABN to the beneficiary. CMS explains that an MUE denial is a coding denial, and that ABN provisions only apply to medical necessity denials.

However, CMS also recently updated FAQ 8736 related to reporting medically necessary units in excess of an MUE.  They discussed the use of several modifiers to report medically necessary excess units on separately lines. This implies that there are excess units that are medically necessary and other instances where the excess units are not medically necessary. The excess units provided, but judged as not medically necessary, would presumably not be reportable with the indicated modifiers and would be subject to the MUEs. The reason they fail the edit then, seems to be a lack of medical necessity rather than a coding error. This seems to indicate that perhaps there are some services in excess of MUEs that are legitimately provided, but not medically necessary; however, CMS has categorized them as “coding denials.” 

I do want to caution providers that, normally, denials that are outside of the ABN provisions result in the service then being billable to the patient without an ABN, as they are only protected from liability for services within the ABN provisions.  However, CMS has previously stated in Program Integrity Manual Transmittal 178 that excess units may not be billed to the patients. Further, CMS stated in that same transmittal, as well as in FAQ 8737, that there is no appeal process for these MUEs. This is the only time I am aware of that the hospital can not be paid by anyone, under any circumstances, for services they legitimately provided. 

CMS has provided two contacts for giving feedback and making inquiries about the MUEs. If a provider wants to request a change to the value of an MUE, they would do so through National Correct Coding Initiative, Correct Coding Solutions, LLC, P.O. Box 907, Carmel, IN,  46082-0907. The fax number is 317/571-1745. For general inquiries, they have provided the following contact at CMS in FAQ 8741:

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