Health Information Management

Appeal MUE denials to prevent revenue loss for your facility

JustCoding News: Outpatient, April 7, 2010

Want to receive articles like this one in your inbox? Subscribe to JustCoding News: Outpatient!

Add one more thing to your list of items to track: medically unlikely edit (MUE) denials and appeals.

An MUE for a HCPCS/CPT code is triggered by the maximum units of service that a provider would report under most circumstances for a single beneficiary on a single date of service. Not all HCPCS/CPT codes have an MUE.

CMS will now deny claim lines with units of service in excess of the MUE for that code. Previously, it either rejected these lines or returned to the provider.

“This change is significant because a return or rejection cannot be appealed, but a denial is appealable,” says Kimberly Anderwood Hoy, Esq., CPC, director of Medicare and compliance at HCPro, Inc., in Marblehead, MA. “This change will allow hospitals to appeal denied units in excess of the MUE, and as long as the services are supported by records, the excess units should be paid.”

However, the change will require staff members to track MUE denials and appeals. Developing a process to manage this new appeals category will be important, says LeAnn R. Kai, CPC, compliance/chargemaster manager and privacy officer at Iowa Health System (IHS) in Des Moines.

Since CMS initiated the MUEs January 1, 2007, Kai’s nine facilities have struggled with MUE denials, in part because their local contractor wouldn’t pay claims even when they appended the appropriate modifiers.

The change will be a blessing for the IHS, says Kai. “I know the facilities within our health system really want to do appeals and show the documentation that shows that this is appropriate. So for us, we’re excited about it because it’s going to give us an opportunity to fight back.”

Manage your denials
At IHS, the central billing office (CBO) receives all denials. After the remittance advice comes in, the 120-day appeals clock starts ticking. If the denial can be appealed, IHS billing staff members reach out to a facility contact to ask whether he or she wants to appeal. If yes, the billing office faxes the denial documentation to the facility, highlighting what it needs to include.

The CBO has one contact at each facility, which streamlines the process, Kai says. That way, the same person is always answering the queries, submitting documentation, and providing any other necessary information. “We have one person that we go to so we aren’t dealing with 40 or 50 other people,” she says. “That’s helped tremendously.”

Also, because of recovery audit contractor (RAC) audits, IHS has already made changes to ensure that it sends the complete medical record with the appeal. “With the RACs coming in, we have tightened up some of our processes, so the medical records are looked at prior to them being mailed out,” Kai says.
Tracking requirements don’t end when the appeal leaves your facility. Staff members at IHS also follow up with the local contractor to make sure that it received the appeal.

“If they say no, we follow up with a second appeal,” Kai says, adding that the second submission represents an additional cost to IHS. They send the second submission by certified mail so they have a record that the contractor received the information.

The IHS billing office also has various tools available to track where claims are in the appeals process. It uses a combination of its RAC tracking software and a spreadsheet to stay aware of when IHS staff members sent in the appeal and what the deadlines are.

“I think keeping your hands around it is going to be a challenge, but I think it’s an important one,” Kai says.

Accurate, complete documentation will be important to successfully appeal MUE denials. If the documentation is insufficient, staff members may need to contact the physician to obtain “something that says this is why he had to do X, Y, Z above what the government says is medically allowable,” Kai says.

Overcome staffing challenges
Appealing a denial can result in additional proper reimbursement for a facility, but it also requires a time commitment from staff members. “The staffing challenge is going to be huge,” Kai says, pointing out that they also handle Medicare Administrative Contractor (MAC), RAC, Medicaid Integrity Contractor (MIC), and managed care requests.

Staff members need to know the different audits and appeals and be able to handle their workload. They need to know what kind of denial it is, whether they can appeal, and where the claim is in the appeal process.

“Everyone is constrained because they can’t add staff to their offices,” Kai says. So you need to find a process that works for your facility and staff members.

“It’s going to cause a lot of anxiety for the leadership because we’ve got to stay on top of everything and we’ve got to track everything between RACs, MICs, and MACs,” Kai says.
At IHS, Kai and other members of management are working to build better lines of communication with staff members. “One of the things that we struggled with for a while was staff wasn’t bringing things to us,” she says. “They weren’t saying, ‘I’m having a problem with this,’ or ‘We’re getting these kinds of denials.’ ”

The management team is training staff members to contact the leadership team, which includes department supervisors, managers, and the director of the CBO, so everyone can get together to formulate a plan for what they are going to do and be prepared. “We’re trying to be more proactive than reactive,” Kai says.

Additional tips for handling MUE denials
In Transmittal 652 in the One-time Notification Manual, CMS points out that organizations can report reasonable and necessary units of service in excess of the MUE edit on separate lines with appropriate modifiers. MUE edits are set to trigger only if a line item has excess units, not the entire claim. According to CMS, a provider can report reasonable and necessary units on separate lines and avoid triggering the edits.

If hospitals have internal edits that are adding these lines together and reporting them on one line, they should explore with their software vendors how to turn this editing off in the case of MUEs, Hoy says.

Hospitals should also watch closely to ensure that contractors have updated their systems and are applying the guidance related to MUEs correctly, Hoy advises.

“In the past, it has been my experience that the claims contractors also will not allow identical lines and will automatically group them onto one line for processing, even if the hospital reported them on separate lines,” Hoy says. Hospitals that continue to experience difficulty submitting identical lines should bring this to their contractor’s attention, along with the guidance from this Transmittal.

Similarly, hospitals should monitor claim lines that trigger MUEs to ensure that they are getting denials, rather than returns or rejections. In addition, look at your chargemaster setup. IHS’ chargemaster is programmed with a maximum quantity, so when a department enters in charges greater than the CMS limit, this triggers an error message. This change resulted in fewer MUE denials.

“They do have ways they can charge above and beyond that if they need to, because they have the documentation or they needed to run that lab test again,” Kai says.

IHS uses a vendor that has set up pre-bill edits on the back end to ensure that the facility actually provided the extra services or items. “There is a lot of front-end work we do before we get the claim to Medicare,” Kai says.

Editor's note: This article was originally published in the May issue of Briefings on APCs. E-mail your questions to Managing Editor Michelle Leppert at

Want to receive articles like this one in your inbox? Subscribe to JustCoding News: Outpatient!

Most Popular