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Investigate Claim Denials

From: The Hospitalist, August 2009

It’s often the simple things that interfere with payment

by Carol Pohlig, BSN, RN, CPC, ACS

In order to recover the appropriate payment for services provided by hospitalists, the following must occur:

  • The billing provider renders service fully, or jointly with a resident under the teaching physician guidelines or nonphysician provider under the shared/split billing rules;
  • The service is completely and accurately documented in the medical record;
  • The correct information is entered on the claim form that is submitted to the payor; and
  • The service is determined to be a covered benefit and eligible for payment.

Claims frequently are rejected or denied. Even more frequently, the physician or billing staff does not understand the reason for the denial. The typical reaction to claim denial is twofold: “appeal with paper” and “write off.” In other words, send a copy of the physician notes to the payor and consider the claim unsuccessful and payment unable to be obtained.

Examining and understanding the payor’s initial claim determination might prompt a more successful response. Presuming the patient demographics are entered without error, the insurance information is correct, the patient is eligible for coverage, and all precertifications and authorizations were obtained, check for these other common errors.

Denials for “medical necessity” are not always what they seem. Individuals often assume that the physician reported an incorrect diagnosis code. Consider the service/procedure code when trying to formulate a response to the denial.

Medical Necessity

Denials for “medical necessity” are not always what they seem. Individuals often assume that the physician reported an incorrect diagnosis code. Consider the service/procedure code when trying to formulate a response to the denial. When dealing with procedure codes, it is likely the denial is received for a mismatched diagnosis.

For example, a payor might deny a claim for cardiopulmonary resuscitation (92950) that is associated with a diagnosis code of congestive heart failure (428.0), despite this being the underlying condition that prompted the decline in the patient’s condition. The payor might only accept “cardiac arrest” (427.5) as the diagnosis for cardiopulmonary resuscitation because it was the direct reason for the procedure. After you ensure that the documentation supports the diagnosis, the claim should be resubmitted with the corrected diagnosis code.

If the “medical necessity” denial involves a covered evaluation and management (E/M) visit, it is less likely that the diagnosis code is the issue. When dealing with Medicare in particular, this type of denial likely is the result of a failure to respond to a prepayment request for documentation. Medicare issues prepayment requests for documentation for the following inpatient CPT codes: 99255, 99254, 99233, 99232, 99223, 99239, and 99292. If the documentation isn’t provided to the Medicare review department within the designated time frame, the claim is automatically denied. The reason for denial is cited as “not deemed a medical necessity.” Some providers misunderstand this remittance remark and assume that the physician assigned an incorrect diagnosis code. Although that might be true, it probably is due to a failure to respond to the prepayment documentation request. Appealing these claims requires the submission of documentation to the Medicare appeals department. Once the supporting documentation is reviewed, reimbursement is granted.

Claim Rejection Checklist

  • Correct POS (place of service);
  • Correct procedure/service code;
  • Diagnosis code recognized by payor (if payor policy is available);
  • Appended modifier, if appropriate;
  • If Medicare, the claim doesn’t involve an electronically triggered visit code 99255, 99254, 99233, 99232, 99223, 99239, or 99292;
  • Documentation supports the service(s)/procedure(s) and diagnosis(es) reported; and
  • The correct provider is identified on the claim form.

Bundling

The National Correct Coding Initiative (NCCI) identifies edits that ultimately affect claims submission and payment. The Column One/Column Two Correct Coding Edits and the Mutually Exclusive Edits list code pairs that should not be reported together on the same date by either a single physician or physicians of the same specialty within a provider group. Under some well-documented circumstances, the physician is allowed to “unbundle” the services by appending the appropriate modifier.

When services are denied as being “incidental/integral” to another reimbursed service (e.g., bundled), the claim should not automatically be resubmitted with a modifier appended to the “bundled” procedure code.

Documentation should be reviewed to determine if the denied service is separately reportable from the paid service. Only when supported by documentation can the physician append the appropriate modifier and resubmit the claim. For example, a hospitalist evaluated a patient with congestive heart failure and pleural effusions. The hospitalist determined that the patient requires placement of a central venous catheter (36556). Because the patient’s underlying condition was evaluated and resulted in the decision to place a central venous catheter, both the visit (99233) and the procedure (36556) can be reported. If submitted without modifiers, some payors may deny payment for the visit because it was not “integral” to the catheter placement. You should resubmit those claims with modifier 25.

Communication Reminder

One of the key elements of a successful charge capture and reimbursement is communication. If the physician does not provide complete and accurate information to the biller, payment is at risk. If a biller has never asked for clarification of information involving diagnosis or procedure codes, the physician should not assume “no news is good news.” Here are some suggestions to get involved with the billing:

  • Open the lines of communication with the billers so they feel the physician is approachable.
  • Ask for feedback on rejections, denials, and appeals.
  • Hold quarterly meetings to discuss recurring problems.

Place of Service

Ensure that the place of service (POS) matches the service/procedure code. For example, say a hospitalist performs a consultation in the ED and determines that the patient does not need to be treated as an inpatient but provides recommendations for ED care and outpatient followup. Avoid a mismatch of the service code and the location. Consults performed in the ED should be reported with outpatient consultation codes (99241-99245) as appropriate. The correct POS should be the ED, not the inpatient hospital. Reporting outpatient codes with an inpatient POS (e.g., 21: inpatient hospital, 31: skilled nursing facility) will result in claim denial.

The same is true when trying to report inpatient consultation codes (99251-99255) in an outpatient location (e.g., 23-ED). The appropriate response for this type of denial is to resubmit the claim with the correct the POS and service/procedure code. A complete list of POS codes and corresponding definitions can be found in Chapter 26, Section 10.5 of the Medicare Claims Processing Manual, available at www.cms.hhs.gov/manuals/downloads/clm104c26.pdf.

Provider Enrollment

Provider enrollment issues occur when a physician’s national provider identifier (NPI) is not properly linked to the group practice. More often than not, the group practice receives claim rejections for enrollment issues when services involve nurse practitioners or physician assistants who have not enrolled with Medicare or cannot enroll with non-Medicare payors.

For example, a nurse practitioner independently provides a subsequent hospital-care service (e.g., 99232). The claim is submitted and Medicare reimburses the service at the correct amount as a primary insurer. The remaining balance is submitted to the secondary insurer. Because the submitted claim identifies the service provider as a nonphysician provider, who likely is not enrolled with the non-Medicare payor, the claim is rejected.

If the physician group has a contractual agreement to recognize nonphysician provider services by reporting them under the collaborating physician’s name, the claim can be resubmitted in the physician’s name. In absence of such an agreement, the claim should be written off. TH

Carol Pohlig is a billing and coding expert with the University of Pennsylvania Medical Center in Philadelphia. She is faculty of SHM’s inpatient coding course.

Reference

  1. Beebe M, Dalton J, Espronceda M, Evans D, Glenn R. Current Procedural Terminology Professional Edition. Chicago: American Medical Association Press; 2008.

This copy is for your personal, noncommercial use only. No part of this article can be reproduced without the written permission of the publisher. Order presentation-ready copies for distribution to your colleagues, clients, or customers by contacting our reprints department at reprints@wiley.com. Copyright © 2009 Society of Hospital Medicine, administered by John Wiley & Sons Inc.

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