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.
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.
