Preventing payment appeals

By Alexander Miller, MD, October 3, 2016

Prior Cracking the Code columns have focused upon common billing errors and appeals strategies. However, a practice’s billing efficiency and financial bottom line would best profit from avoiding payment appeals in the first place. How would one do that? Well, one should be aware of general common billing errors (enumerated in last month’s Cracking the Code) and one’s individual practice’s peculiar billing errors. If you discover an error trend in your practice, then clearly that would be the first thing to correct. That assumes that someone motivated to discover trends is looking for them and reporting them to the billing sources, which then correct them. This type of monitoring should ideally lead to preventive measures.   

The following simple steps may be taken to avoid billing that is likely to lead to non-payment or reduced payment.

1. Ensure that correct patient data is transmitted — according to CMS, the number-one claim error is using the wrong patient name.
2. Use CPT modifiers when needed (refer to the CPT^® Appendix A and previous Cracking the Code issues for discussions of modifier use).
3. Be familiar with pertinent Medicare Administrative Contractor (MAC) Local Coverage Determinations (LCDs), available on the MAC websites, and with individual insurers’ coverage criteria. A comprehensive list of LCDs from all MAC contractors can be found at www.cms.gov/medicare-coverage-database/overview-and-quick-search.aspx.
4. Provide the insurer supporting documentation with your bill if you have determined from prior claim adjudications that such documentation will always be requested prior to payment. Do not staple or otherwise attach supporting documentation to the claim, but do include the insurance information and member name and number on each page of the supporting documentation.
5. What if the MAC requests supporting documentation? Send it in promptly, and ensure that the provider’s valid signature is included. No valid signature = no payment — but if your signature is missing, don’t add it. Instead, send an attestation form which you can find on the payer’s website. 
6. Bill Medicare as the secondary payer properly. The primary insurer’s explanation of benefits (EOB) must be included with a claim to Medicare.
7. Medicare Advantage billings are sometimes erroneously directed to the MAC. Most commonly, this results from either a patient not realizing that they have shifted to an Advantage plan or staff not recognizing that the patient’s Medicare card is an Advantage card.
8. What if the billed Medicare beneficiary service is not covered by Medicare or an insurer, or Medicare determines that the service is not medically necessary? If uncertain about coverage, obtain a signed and dated Advance Beneficiary Notice (ABN) from the patient prior to providing your service and append modifier GA –  Waiver of liability statement issued as required by payer policy. This modifier notifies Medicare that the patient was informed the service may not be a covered service/procedure and will accept financial responsibility if service/procedure is not covered. An ABN interactive tutorial and a copy of the ABN form can be found at www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/ABN-Tutorial/formCMSR131tutorial111915f.html. If the service is statutorily never covered (cosmetic) then no ABN is required, but may be obtained, if desired by the patient, in which case modifier GY or GX should be used. Patients covered under third-party payers can be asked to sign a financial consent prior to providing your service.

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Example 1: Your electronically transmitted claim for a Mohs surgical excision and reconstruction is held by the insurer until you submit a written surgical report to the insurer. Upon receipt of the documentation request your biller sends a copy of the operative report to the insurer. The bill is subsequently properly paid.

Answer: You are correctly paid, but was this done efficiently? If your office staff knows that a given insurer routinely requires a copy of an operative report to be submitted with a billing, then why not do so from the get-go? Doing so would avoid delays in claim processing and reimbursement as well as staff work/expense dealing with documentation requests.

Example 2: A patient comes in for an evaluation of a rash two months following a Mohs surgical excision of a nasal basal cell carcinoma and a flap repair of the defect. You diagnose hand eczema and treat it with a topical steroid. The visit is billed with an appropriate E/M code.

Answer: Nice try. Payment for the office visit will be denied based upon the absence of a 24 modifier specifying that the E/M service, which was provided during the 90-day adjacent tissue rearrangement (flap) global period, was not related to the surgery.

Example 3: Your privately insured patient has Medicare as his/her secondary insurance. You bill the private insurer $100 in charges and are paid $75. You then bill Medicare $25 for the remaining balance.

Answer: Incorrect. One should always bill Medicare the full amount of the original charge, and should provide a copy of the primary insurer’s EOB. The MAC will adjudicate the billing based upon the MAC’s participating physician contracted or non-participating limited charge rates.

Example 4: You excise your Arizona Medicare patient’s painful, red, abscessed chest wall epidermal inclusion cyst. You clearly document in the medical record that the cyst is abscessed, inflamed, and painful. Based upon your perusal of the pertinent Medicare LCD you are confident that the lesion qualifies for coverage. You bill ICD-10 L72.0, indicating an epidermal inclusion cyst, and the appropriate CPT excision and intermediate repair codes. When the claim is adjudicated you receivenothing! It is judged to be a non-covered service, and you and the patient receive a notice that the patient is not responsible for the balance of the bill.

Answer: Incorrectly billed claim. Although an abscessed epidermal inclusion cyst excision is a covered service, the billing did not satisfy LCD billing criteria. The pertinent Noridian Medicare LCD describes both criteria for coverage and coding requirements for transmitting the fulfilled coverage criteria to the payer. Both a primary ICD-10 diagnosis and a secondary diagnosis specifying the criterion/pathology justifying coverage needed to be submitted. Optimal ICD-10 billing is: L72.0 (epidermal inclusion cyst) and L02.213 (cutaneous abscess of chest wall). Alternate qualifying secondary codes are R20.3, hyperesthesia, and R20.8, other disturbances of skin sensation. 

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