Physician Practice

CMS clarifies ICD-10 auditing of certain physician fee schedule claims

Physician Practice Insider, August 11, 2015

[Editor’s Note: CMS updated the Q&A referred to this article again on July 31 to address an announcement that Medicare audit contractors would not deny certain Part B physician fee schedule claims based solely on the specificity of the ICD-10 code for 12 months after ICD-10 implementation.]
 
CMS offered some clarity on what it considers to be a family of codes in ICD-10-CM.
 
You might remember that CMS worked with the American Medical Association (AMA) to get AMA on board with ICD-10. For the first year of ICD-10 use, CMS will not deny or audit claims based solely on the specificity of diagnosis codes, as long as the codes on such claims are from the correct family of codes.
 
Unfortunately, CMS didn’t specify at the time what it meant by “family of codes.” Apparently, a lot of people raised questions about just how CMS’ plan would work because the agency released Clarifying Questions and Answers Related to the July 6, 2015, CMS/AMA Joint Announcement and Guidance Regarding ICD-10 Flexibilities. The document includes 13 questions and answers, including three focused on the family of codes.
 
A “family of codes” is the same as the ICD-10 three-character category, according to the CMS Q&A.
 
Consider S31 (open wound of abdomen, lower back, pelvis, and external genitals). CMS says this is a family of codes. A total of 450 codes fall within that family. Those codes represent a wide range of injuries.
 
So theoretically, you could report S31.821D (laceration without foreign body of left buttock, subsequent encounter) when the patient really suffered S31.652A (open bite of abdominal wall, epigastric region with penetration into peritoneal cavity, initial encounter). CMS would not audit or deny that claim because you reported a valid code within the family.
 
However, here’s the catch—CMS never said it wouldn’t deny or audit claims for medical necessity.
 
Remember that seventh character A means active treatment, while D refers to routine aftercare.
 
Let’s say our patient with a bite wound develops an infection in the wound site and the physician decides the best course of treatment is to debride the tissue. S31.821D is not going to support the medical necessity of a wound debridement. CMS could deny the claim even though you reported a valid code within the family.
 
Question six provides another caveat. CMS can deny a claim if the code reported does not meet the requirements of a Local Coverage Determination (LCD) or National Coverage Determination (NCD). CMS even states: “current automated claims processing edits are not being modified as a result of the guidance.”
 
Move on to question seven for some additional information about the LCDs and NCDs. NCDs and LCDs often require you to report specific codes. The level of specificity required for ICD-10-CM will be the same as that required in ICD-9-CM. With one major exception—laterality. ICD-9-CM does not specify laterality. ICD-10-CM does.
 
If an LCD or NCD includes codes that specify laterality, coders cannot use a code for unspecified laterality to meet that requirement. So if your physicians aren’t documenting laterality, you aren’t meeting the LCD or NCD requirements. Auditors can go back and review those claims. You don’t get a pass just because you reported a code in the correct family.
 
Moral of the story—make sure you report the most specific code.

This article originally appeared on
HCPro’s ICD-10 Trainer blog.

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