Health Information Management

Two years later, MUEs are still a puzzle

JustCoding News: Outpatient, October 7, 2009

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A patient comes into a hospital with a major head injury. The physician orders an MRI to evaluate a subdural hematoma. Soon, the hospital submits the claim, reporting four units of code 70553 for an MRI of the brain with and without contrast material.

But it isn’t long before the claim comes back to the hospital as return to provider (RTP). Why? Code 70553 is on CMS’ list of medically unlikely edits (MUE). Medicare allows its contractors to pay hospitals for only one MRI per patient on a single date of service. After determining that the radiology department provided only one MRI, the hospital resubmits the bill with code 70553 at one unit. Medicare pays the claim.

When CMS implemented MUEs in 2007, the above scenario is the type of error the agency hoped to prevent. Although CMS put MUEs in place to ensure that providers do not report excessive units of service on Medicare Part B claims, they’ve been a source of frustration for many hospitals. The MUEs have been controversial from the start—initially kept secret by CMS and now involving a new modifier the agency has yet to turn on.

For HCPCS and CPT codes that have an MUE, a provider can report only a maximum number of units of service under most circumstances for a single beneficiary on a single date of service, CMS states. In other words, the MUE limits the number of units an FI or MAC will pay a hospital for certain services, even if the hospital actually provided units of service in excess of the MUE limit.

Not all of the MUEs are as clear-cut as the MRI scenario above. For example, a hospital might bill for a pathology evaluation at four units because the lab performed the test on four different specimens. The contractor would reject the claim because the MUE does not allow it to pay for four units, even though the hospital provided the services.

“There’s been a major amount of frustration,” says Judith L. Kares, JD, CPC, regulatory specialist at HCPro, Inc., in Marblehead, MA.

Unraveling the MUE mystery
CMS kept MUE values confidential when it first introduced them, fearing that revealing the values would enable providers to game the system. In October 2008, CMS decided to publish many—but not all—of the MUEs on its Web site, stating that this would improve the accuracy of claims payments. Hospitals can find approximately 6,000 of the current edits on the CMS Web site. Initially, CMS said there were an estimated 10,000 MUEs.

CMS added to the MUE puzzle in January 2008 when it created a new -GD modifier for use when “units of service exceeds [MUE] value and represents reasonable and necessary services.” However, CMS has not issued any guidance on when or how hospitals can use the modifier to override MUE edits.

Some billers have attempted to bypass the current edits by using the -GD modifier. Although it is valid, it is apparently still not recognized for use by hospitals. CMS has repeatedly said it is not activated in its system, so it’s not clear whether hospitals can or should use it, says Kimberly Anderwood Hoy, Esq, CPC, director of Medicare and compliance at HCPro.

Consider MUE strategies
Given the continuing confusion, what can facilities do to handle MUEs? There are several options.

Become familiar with the MUEs that CMS has published. For example, although CMS doesn’t publish all the MUEs, seeing a CPT/HCPCS code on the list will tell you that you shouldn’t bill more than 10 units of a particular service, says Jennie L. Bryan, MBA, RHIA, CCS, compliance auditor at Baptist Healthcare System, Inc., in Louisville, KY. Bryan says her hospitals see MUEs on laboratory and radiology services, as well as EKGs and cardiology services.

Kares also confirms that many MUEs are associated with clinical diagnostic laboratory services.

Check whether you provided the number of units in question. “The first thing we do is check to see if the units are correct,” says Bryan. “The business office sends it back to whichever department charged it and will say, for instance, ‘Did you really do 20 of these?’”

CMS’ initial focus on MUEs was to identify circumstances in which providers were billing units in error, says Kares. So CMS believes that in most circumstances when an MUE occurs, the facility has not actually provided the units claimed, she says.

When a line item on a claim has units in excess of what CMS allows, the contractor won’t process the claim. It will show up as RTP, and the contractor won’t process the line item until the hospital decreases the number of units. Check with the department that provided the service, return to the medical record, and see how many of these units your facility provided, says Kares.

Be prepared to resubmit edited claims. After determining that your facility provided the number of units you billed, go to the MUE list on the CMS Web site. If CMS publishes the edit for that particular code, you know what the cut-off number is. You can then resubmit the claim for the number of units you know the contractor will pay.

If CMS has not disclosed that particular value, it is trial and error for facilities. “Sometimes, we just play with it,” says Bryan, resubmitting the claim for various units until the hospitals get paid. Sometimes, the business office will break the claim into more than one line item or make it a different line item. “We keep submitting it until it goes through,” she says, a frustrating and costly process.

Review CMS FAQs
Follow CMS’ guidance on separate line items and modifiers. CMS recognizes that units in excess of MUE limits might be medically necessary and therefore covered in certain circumstances. The agency has published several FAQs about this on its Web site.

In FAQ 8736, CMS instructs hospitals to report units in excess of the MUE limits by placing the same code on separate claim lines, with an appropriate modifier, so that the number of units on each line is within the MUE limit.

Hospitals can use the following modifiers, according to the FAQ:

  • -76 (repeat procedure by same physician)
  • -77 (repeat procedure by another physician)
  • anatomic modifiers (e.g., -RT, -LT, -F1, -F2)
  • -91 (repeat clinical diagnostic laboratory test)
  • -59 (distinct procedural service) but only when no other modifier describes the service

In prior guidance (FAQ 8735), CMS indicated that contractors should apply MUE limits against each line of a claim, rather than the entire claim. Therefore, if a hospital reports a HCPCS or CPT code on more than one line of a claim by using modifiers, the contractors should separately adjudicate each line with that code against the MUE, CMS states.

But Kares says she has heard from hospitals that have followed CMS’ guidance on billing medically necessary units in excess of MUE limits that have had their FI or MAC return claims because it applied the edits on a per claim, rather than a per line, basis. “The FIs and MACs are still looking at the total,” she says. “Hospitals aren’t receiving payment.”

All hospitals can do in this case is resubmit the claim and decrease the number of units reported to be within the limit allowed by CMS, Kares says.

CMS updates the MUEs each quarter. According to FAQ 9842, posted August 13, CMS temporarily suspended laboratory/pathology MUEs first implemented January 1, effective April 1. CMS reimplemented 36 of those MUEs with their original MUE values on July 1. It will reimplement an additional 57 MUEs with their original MUE values October 1. The additional five MUE values are under consideration and remain temporarily suspended.

Track your losses. Even when hospitals report medically necessary units in excess of MUE limits as instructed by CMS, they may ultimately receive no reimbursement for those services. “I encourage people to track the dollars they are losing,” says Kares. “It’s important that hospitals determine how much money is involved and that they try to identify those situations that involve high-dollar amounts or where MUEs occur frequently.”

CMS suggests that providers concerned about the rationale for an MUE value contact the appropriate national specialty healthcare organization for that procedure. Those organizations, as well as providers, can submit a request for reconsideration of an MUE value through the National Correct Coding Initiative. “At some point, it may be worthwhile, if there are enough claims where you’re receiving less than what you believe you’re entitled to, to pursue that option,” Kares says.

Don’t bill the beneficiaries
Hospitals cannot bill beneficiaries for services denied due to MUEs, Kares says.

In FAQ 9697, which CMS released in April, the agency restates its position that hospitals cannot bill beneficiaries for units of service in excess of MUE limits, even when the hospital has provided an advance beneficiary notice (ABN) to the beneficiary prior to the hospital providing those services.

“An MUE denial is an initial determination based on a coding denial, not a medical necessity denial. By statute, an ABN may be applied only if the initial determination on a claim results in a denial due to medical necessity,” CMS states.

The purpose of an ABN is to notify the beneficiary that Medicare is unlikely to pay for certain services and the beneficiary is liable if Medicare does not pay. Generally, when a physician orders services in excess of what the hospital believes to be medically necessary under Medicare guidelines, the hospital can provide the patient with an ABN prior to the performance of those services, Kares says.

If Medicare denies coverage, the hospital can bill the beneficiary for those noncovered services. But that’s not how it works with MUEs.

“Medicare’s position is you don’t deserve any more money than the money for the maximum number of units,” Kares says.

In the absence of medical necessity, the hospital can decide to not provide the excess units, despite a physician’s order, or reconcile itself that it is not going to get paid for all the services it provides a patient, she says. “There’s no protection for the hospital.”

Editor’s note: This story was published in the October issue of Briefings on APCs.
E-mail Bryan at

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