Corporate Compliance

Note from the Instructor: Updates on Related Claims Denials and Settlement Process

Medicare Insider, September 23, 2014

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This week’s note from the instructor is written by Kimberly Anderwood Hoy Baker, JD, CPC,regulatory specialist for HCPro.  
This week I thought I would cover a couple updates to information in the last couple Medicare Insider Note from the Instructor columns. CMS has rescinded and replaced the transmittal on related claims three times since I wrote my column two weeks ago. Also the website with information on the settlement process for outstanding appealed claims, discussed by Debbie Mackaman in last week’s note, was updated late last week with new information.
Two weeks ago, I reported on Transmittal 534 to the Program Integrity Manual allowing denial of related claims when an inpatient claim in denied. Subsequently, CMS published Transmittal 537 rescinding and replacing Transmittal 534, but it has now been removed from their website. Even though Transmittal 537 no longer appears on the CMS website, the substantive portion still appears as the attachment to Transmittal 534. And even though Transmittal 534 makes no indication it has been rescinded and replaced, Transmittal 540 purports to do just that and itself has been rescinded and replaced with Transmittal 541, although again Transmittal 540 makes no reference to having been rescinded and replaced.
So what does all this mean? Even though Transmittal 534 and Transmittal 540 still appear on CMS’ website in their entirety and do not state they have been rescinded, they do not appear to contain current CMS policy on related claims. It appears that Transmittal 541 is the most current CMS policy on review of related claims when inpatient services are denied. 
Just what did CMS change? Most importantly, they appear to have limited the policy currently to inpatient surgical claims that are denied as not reasonable and necessary. If the hospital documentation, including history and physical and progress notes, doesn’t support medical necessity of an inpatient surgical procedure, the physician’s Part B claim for performing the procedure would be denied. The new transmittal continues to allow the denial of the physician’s claim without requesting records from the physician, meaning the physician’s claim may be denied based on the hospital record.
The transmittal still applies to just MAC and ZPIC reviewers, although Recovery Auditors can request approval to review related claims through their standard issue approval process. Even the MACs and ZPICs, however, must get approval from CMS before starting these reviews and the MACs must post their intention to do so on their website 30 days prior to starting the reviews.
Also updated this last week was the Inpatient Hospital Reviews website where CMS published information about a settlement process for providers to resolve outstanding appealed claims related to patient status by accepting 68% of the amount in dispute. Debbie reported last week on a set of Frequently Asked Questions posted on September 16 as well as other details about the settlement process.
Subsequently, CMS posted the recording of the teleconference they held on September 9discussing the settlement process. Another conference will be held October 9 and readers can register at the MLN Connects website. Additionally, on September 16 they also published a revised Administrative Agreement related to the process for settlement.
For more information on review of related claims, please see the September 9 Note from the Instructor and for more information on the settlement process, please see the September 16 Note from the Instructor.

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