Practice Economics

Due Diligence: Denials


 

Before submitting a claim, hospitalists should ensure that the service is rendered, that it is completely and accurately documented in the medical record, that the correct information is entered on the claim form, and that it is a covered benefit and eligible for payment.

Although the latter two elements typically are delegated to the billing team, hospitalists should encourage or request feedback regarding payment and denials. The ensuing open dialogue between physicians and billers might prove helpful in understanding and resolving future billing issues. Less-experienced billers first respond to claim denials by submitting documentation (i.e. “appeal with paper”) despite the inappropriateness of this action. If the denial is upheld, this attempt is viewed as unsuccessful and, without further consideration, “written off.” However, careful examination of the payor’s initial claim determination could elicit a more suitable response.

Service Provider

Provider enrollment issues can sidetrack claim submissions. Physicians must register their NPI (national provider identifier) with the correct practice location and group assignment, particularly when previously practicing physicians join a new group practice. Failure to do so is an infrequent, yet valid, cause for denial.

Alternatively, enrollment issues play a greater role when services involve nurse practitioners (NPs) and physician assistants (PAs) who are enrolled with Medicare but might be prohibited from enrolling with other payors. For example, an NP independently provides subsequent hospital care (e.g. 99232) to a Medicare beneficiary. The claim is submitted in the NP’s name and reimbursed at the correct amount by Medicare as the primary insurer. The remaining balance is submitted to the secondary insurer, who does not enroll NPPs. The claim is rejected. If the physician group has a contractual agreement to recognize NPP 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.

Practice Reminder: Open Line of Communication

One of the key elements for successful charge capture and reimbursement is communication. If the physician does not provide complete and accurate information to the biller, the payment is at risk.

Physicians consistently fail to provide the information needed for successful claim submission. If a biller has never asked for clarification of information involving diagnosis or procedure codes, the physician should not assume that “no news is good news.” Get involved with the billing. Open the lines of communication with the billers so that they feel the physician is approachable. Ask for feedback on rejections, denials, and appeals. Hold a quarterly meeting to discuss recurring problems and other issues.

Taking interest in the revenue cycle can foster better relationships with billers, highlight pertinent coding and documentation issues requiring physician improvement, and raise awareness of what is required for all parties involved.—CP

Location

The place of service (POS) must match the reported service/procedure code. For example, a hospitalist is asked to see a patient in the ED. The patient requires further testing but does not meet the criterion for an inpatient stay. The hospitalist admits the patient to observation, treats him, and discharges him to home.

Hospitalists need to avoid the common mistake of mismatching the service code with the location/POS. Observation services performed by the “physician of record” should be reported with the corresponding codes: initial observation care (99218-99220), subsequent observation care (99224-99226), or observation discharge (99217), as appropriate.1 The correct POS should be reported as outpatient hospital (POS 22), not inpatient hospital (POS 21). Trying to report outpatient codes with an inpatient POS will result in claim denial.

A similar denial occurs when trying to report inpatient codes (99231-99233) in an outpatient location (e.g. 23-ED). These denials require claim resubmission with the correct POS and/or service/procedure code. A complete list of POS codes and corresponding definitions can be obtained from Chapter 26, Section 10.5 of the Medicare Claims Processing Manual, available at www.cms.hhs.gov/manuals/downloads/clm104c26.pdf.

Diagnosis

Denials involving diagnoses produce issues of “medical necessity.”1 Examine these denials carefully. Consider the service/procedure code when trying to formulate a response to the denial. The diagnosis code represents the reason for the service or procedure and might be a sign, symptom, or condition with which the patient presents. Medicare reimburses for procedures and services that are deemed “reasonable and necessary.”

In an effort to unify standards, Medicare has developed national coverage determinations (NCDs) to identify coverage requirements for frequent or problematic procedures or services. These coverage requirements can identify specific conditions (i.e. ICD-9-CM codes) for which the services or procedures are considered medically necessary. In the absence of a national coverage policy, an item or service could be covered at the discretion of Medicare contractors based on a local coverage determination (LCD), which varies by contractor.

Medical necessity denials often involve a mismatched or missing 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 “medically necessary” diagnosis for cardiopulmonary resuscitation, as this is the direct reason necessitating the procedure. After reviewing the documentation to ensure that the documentation supports the diagnosis, the claim can be resubmitted with a confirmed and corrected diagnosis code.

Common Denials Checklist

Presuming the patient demographics are entered without error, the patient provided the correct insurance information and is eligible for coverage, and any necessary pre-certifications/authorizations are obtained, check for these common errors that result in claim denials:

  • Correct provider is identified on the claim form;
  • Correct location;
  • Correct reason for the reported procedure/service (if applicable payor policy exists);
  • Correct response to a pre-denial request for additional information;
  • Correct documentation to support the reported service/procedure(s) and diagnosis(es) involved in the pre-denial request; and
  • Correct modifier is appended, when appropriate.

Initial-Request Response

While diagnoses can lead to medical necessity issues, not all medical necessity denials are due to incorrect diagnoses. Some “medical necessity” denials result from a failure to respond to a payor request. More specifically, if the “medical necessity” denial involves a covered evaluation and management visit, the denial is more likely the result of a failure to respond to a prepayment request for documentation.

Medicare typically issues prepayment requests for documentation for the following inpatient CPT codes: 99223, 99233, 99232, 99239, and 99292.1 If the documentation is not provided to the Medicare review department within a designated time frame (e.g. 30-45 days), the claim is automatically denied. The reason for denial is cited as being “not deemed a medical necessity.” These claims do not require electronic resubmission, and instead require submission of documentation to the Medicare appeals department. Once the supporting documentation is reviewed, reimbursement is issued.

Supportive Documentation

There are times when payor requests for additional information or documentation is handled in a timely fashion. However, the paper submission might have been incomplete, as the encounter note itself might not contain the cumulative information representing the reported service.

For example, other pieces of pertinent information may be obtained from the data or order section of the chart. If the individual responsible for gathering the requested documentation does not review it before submission, important or referenced entries may be missed, and the complexity of the billed service might be sacrificed. The provider should submit any entry with the same date as the requested documentation in support: labs, diagnostic testing, physician orders, patient instructions, nursing notes, resident notes, notes by other physicians in the same group, discharge summaries, etc.

Legibility of the encounter note is crucial when the documentation is sent for review. Most reviewers will seek another reviewer’s assistance in translating, but they are not obligated to do this. If the note is deemed incomprehensible, the service is denied, resulting in a nonpayment or a refund. Electronic medical records (EMRs) are assisting physicians and other providers with legibility issues and improving review findings. If a physician is still writing notes by hand, a transcription might be sent along with the documentation to prevent unnecessary denials. Only consider this for requests involving providers with problematic handwriting. A legible signature is required. If a denial ensues in absence of a signature, the provider can submit an appeal with an acceptable attestation.

Modifier Considerations

Some services are denied for being “incidental/integral” to another reimbursed service (i.e. bundled). Payors implement electronic payment edits that disallow separate payment for “related” services. The industry standard, known as the National Correct Coding Initiative (NCCI), identifies 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.

When a claim is denied for this reason, billers tend to automatically and erroneously resubmit the claim with a modifier appended to the disallowed or “bundled” procedure code. Documentation should be reviewed to determine if the denied service is separately reportable from the paid service. The biller might append the appropriate modifier and resubmit the claim only when well supported by documentation.

For example, the 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 catheter, both the visit (99233) and the procedure (36556) can be reported. If submitted without modifiers, some payors will deny payment for the visit for being integral to the catheter placement. In this case, the claim should be resubmitted with modifier 25 appended to the visit. Payors might still require documentation review to ensure legitimacy of this modifier before the claim is paid. TH

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

Reference

  1. Abraham M, Ahlman J, Boudreau A, Connelly J, Evans D. Current Procedural Terminology Professional Edition. Chicago: AMA Press; 2011.

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