Corporate Compliance

Note from the Instructor: Review of CMS rules on application of Medically Unlikely Edits

Medicare Insider, April 28, 2015

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This week’s note from the instructor is written by Judith L. Kares, JD, regulatory specialist for HCPro.  
 
Under the NCCI, CMS has implemented three types of edits designed to promote correct coding and to discourage incorrect coding. Unfortunately, incorrect coding often leads to inappropriate payments, primarily overpayments. Currently, the following three types of NCCI edits are updated and maintained by CMS contractor Correct Coding Solutions, LLC:
 
  • Procedure to Procedure Edits;
  • Medically Unlikely Edits; and
  • Add-on Code Edits.
 
The NCCI edits only apply to Medicare services covered under Part B. The NCCI policy manual and edits may be downloaded from the CMS website, which instructs providers to address concerns regarding specific NCCI edits to the current NCCI administrator. During a recent MBC-H class, participants had a number of questions and concerns regarding the application of the Medically Unlikely Edits, more commonly referred to as MUEs. 
 
Background on MUEs
 
The MUEs are unit of service limitations which have been introduced incrementally since 2008. Prior to implementation of the MUEs, CMS declined to disclose to providers the limitations for specific services. Following implementation, providers only learned they had exceeded an MUE limitation for a particular service when they billed units in excess of that limitation. After repeated requests for disclosure, CMS began to release MUE limitations for specific services. It is still not clear, however, whether CMS has released the MUE limitations for all services subject to these edits. Currently, CMS has released MUEs for more than 10,800 Medicare-covered services. 
 
Initial application of MUEs
 
One of the most troubling areas surrounding the MUEs is how they are applied. Initial guidance from CMS indicated that the MUE limitations were to be applied on a per line item basis, so that the number of units on a single line did not exceed the limitation. If providers furnished what they believed to be medically necessary units (to the same beneficiary on the same date of service (DOS)) in excess of the limitation, they were told to bill those excess units on separate line items, with an appropriate modifier, so no single line item for that service contained units in excess of its MUE. In many cases, that methodology appeared to work. For those cases, as long as no line item exceeded the MUE, there was no denial of units in excess of the limitation when billed on a separate line with an appropriate modifier.
 
In other cases, however, CMS appeared to be applying the limitation on a DOS basis. That is, CMS appeared to be adding together all units of that service performed for the same beneficiary on the same date of service. If the sum of all units exceeded the limitation, then CMS either denied all line items on the claim with the HCPCS code for that service or denied the entire claim. At that point, there was considerable confusion as to how CMS was applying MUEs.
 
Introduction of MUE adjudication indicators
 
In response to this confusion and requests for clarification, CMS introduced three MUE adjudication indicators (MAI), which identify how CMS will apply MUEs to each specific service. These three MAIs are designated, defined and applied as follows:
 
  • MAI 1—applied by claim line
o   Each line reporting services is subject to MUEs edited against the MUE separately
o   For codes subject to MUE limitations, providers should report medically appropriate units in excess of the limit on separate lines, with an appropriate modifier, so no single line exceeds the limitation
o   MUEs with MAI of 1 denied for units in excess of the MUE are generally appealable to the MAC
 
  • MAI 2—applied by date of service
o   If billed in error, the provider may request reopening to correct
o   All claim lines with the same HCPCS code, regardless of modifier, and the same DOS will be summed and compared to the MUE value
o   All claim lines with that specific code will be denied if the total units exceed the MUE
o   The edit is based on statute, regulation, or subregulatory guidance and the MAC is bound by these rules for both initial decisions and redeterminations
§ Higher-level appeal adjudicators may not be bound by these rules, but should give deference to them
 
  • MAI 3—applied by date of service
o   If billed in error, the provider may request reopening to correct
o   All claim lines with the same HCPCS code, regardless of modifier, and the same DOS will be summed and compared to the MUE value
o   All claim lines with that code will be denied if the total units exceed the MUE
o   The edit is based on clinical information, and the provider may be able to successfully appeal denial to the MAC if there is adequate documentation of medical necessity
 
Additional questions and concerns
 
As noted above, the MUE edit tables are available for download from the CMS website. In the edit tables, CMS has identified each service subject to an MUE by HCPCS code. Beside each HCPCS code, CMS has listed the applicable MUE unit limitation and MAI designation, indicating the basis upon which the MUE is applied to that service. CMS encourages providers to contact the current NCCI administrator, Correct Coding Solutions, if they have questions or concerns about specific MUE limitations. In prior guidance, CMS also suggested that providers contact the national societies whose members order services subject to MUE limitations if they believe certain limitations are too restrictive based upon accepted medical practice. 
 
One area of particular concern is CMS’ decision to deny all line items for services with an MAI of 2 or 3 (indicating the MUE is applied on a DOS basis) when the sum of the units exceeds the limitation, rather than only denying the units in excess of the limitation. This seems unnecessarily punitive, particularly when providers believe the excess units are medically appropriate. This concern might be an area where a coordinated, concerted approach would be more effective than individual action.



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