Corporate Compliance

Note from the Instructor: Medicare Contractors Allowed to Up Code or Down Code

Medicare Insider, April 14, 2015

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This week’s note from the instructor is written by Debbie Mackaman, RHIA, CPCO, CCDS regulatory specialist for HCPro.  
CMS recently released Transmittal 585 adding language to Chapter 3 of the Medicare Program Integrity Manual. This chapter has gone through major changes in the last year or so and focuses on verifying billing and coding errors and the corrective actions that can be taken by CMS contractors. Section - Coding Determinations has new language that should be of interest to all providers.
Effective May 4, 2015, MACs, Comprehensive Error Rate Testing (CERT) contractors, Supplemental Medical Review Contractor (SMRC), Recovery Auditors, and Zone Program Integrity Contractors (ZPICs) may up code or down code a claim in certain situations. However, this excludes determinations made by contractors based on whether or not the item or service is “reasonable and necessary” under current CMS policy. It also instructs contractors not to substitute the payment amount for a different amount when the determination is based on the item or service not being medically necessary under the circumstances.
When the medical record supports a higher or lower level procedure or diagnosis code, the MAC, SMRC, CERT, ZPIC and Recovery Auditor will not deny the entire claim and instead will change the code and adjust the payment. CMS policy will continue to take precedence over coding guidelines listed in the Current Procedural Terminology-4 (CPT-4), Coding Clinic for ICD-9, and Coding Clinic for HCPCS. However, all of the appropriate coding guidelines for the procedure or diagnosis code must be met in order for the contractor to make the change.
Although this new guidance applies to certain situations, CMS did not provide any details on what those situations are other than providing the following examples. The examples provided appear to be more clerical in nature or errors based on clear documentation. I have added additional information to show the potential payment impact based on the national payment amounts.
  • CBC with differential (85025) was ordered and billed but CBC without differential (85027) was provided:
o   85025 = $10.58
o   85027 = $8.81
  • CT chest with contrast (71260) was ordered and billed but CT chest without contrast (71250) was provided:
o   71260 = $240.92
o   71250 = $120.02
  • DRG 193 was billed but the medical records supports DRG 195 (in the following example, wage index = 1.00 and no other payment adjustments made):
o   DRG 193 Simple Pneumonia with MCC (1.4491) = $8,510.30
o   DRG 194 Simple Pneumonia with CC (.9688) = $5,689.59
o   DRG 195 Simple Pneumonia without CC/MCC (.7044) = $4,136.81
  • ER E&M level 3 (99283) was billed but the medical record supports level 2 (99282):
o   99283 = $62.57
o   99282 = $41.48
o   The example provided would most like apply to professional services as CMS permits           hospitals to develop their own internal systems for assigning E/M levels for ED encounters.
The ability for a contractor to change the code and adjust the payment may or may not have an impact on reducing the number of appeals submitted by providers. In doing the math, the number of denials attributed to contractors will certainly decrease. Providers should watch for more information on the implementation of this change and how information will be provided on the Remittance Advice when these actions occur.

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