By Marcella Bucknam, CPC, CPC-H, CPC-P, CPC-I, CCC, COBGC, CCS, CCS-P
The surgical package is a reimbursement concept that bundles all typical care related to a specific surgical service into a single payment. Many surgeons find information about what is bundled confusing, and either inappropriately bundle all of their work into a single payment or bill separately for services that should be included in the package. Even more confusing is when two physicians “split” services bundled into the surgical package. In such cases, careful coordination of billing is necessary.
Define What Is Included
CPT® defines the surgical package as the operation, and also includes:
- Local infiltration, metacarpal/metatarsal/digital block, or topical anesthesia
- Subsequent to the decision for surgery, one related evaluation and management (E/M) encounter on the date immediately prior to or on the date of the procedure (including the history and physical)
- Immediate postoperative (post-op) care, including dictating operative notes and talking with the family and other physicians
- Writing orders
- Evaluating the patient in the post-anesthesia recovery area
- Typical post-op follow-up care
Medicare guidelines bundle additional services, including:
- Preoperative visits after the decision is made to perform surgery, beginning with the day before the day of surgery for major procedures and the day of surgery for minor procedures
- Intra-operative services that are normally a usual and necessary part of a surgical procedure
- Complications following surgery—all additional medical and surgical services required of the surgeon during the post-op period due to complications not requiring additional trips to the operating room (OR)
- Post-op visits (follow-up visits in the post-op period of the surgery related to recovery from the surgery)
- Post-surgical pain management by the surgeon
- Supplies, except those identified as exclusions
- Miscellaneous services integral to the surgical procedure, such as dressing changes; local incisional care; removal of operative pack; removal of cutaneous sutures and staples, line, wires, tubes, drains, casts, and splints; insertion, irrigation and removal of urinary catheters, routine peripheral intravenous (IV) lines, nasogastric (NG) and rectal tube; and changes and removal of tracheostomy tubes
Payment for all of these services is considered part of the global payment and may not be billed separately. To bill separately for any of these services could lead to duplicate payment.
Define What Is NOT Included
Not everything is bundled into the surgical package. The following services are never bundled and are separately billable during the global period:
- Care of pre-existing conditions
- Care of new problems arising during the post-op period
- Care of the underlying disease process when this is not cured by the surgical procedure
- Services of other physicians, except where the surgeon and the other physician(s) agree on a transfer of care
- Diagnostic tests and procedures, including diagnostic radiological procedures
- Treatment for post-op complications that require a return trip to the OR
- Procedures that are planned to be performed in stages
- Immunosuppressive therapy for organ transplants
One of the most challenging issues related to separately billable services is the fourth bullet above: “Services of other physicians, except where the surgeon and the other physician(s) agree on a transfer of care.”
This exception is meant to clarify that medically necessary care outside the surgeon’s skill set is separately billable when performed by a physician in another specialty. For example, the surgeon is expected to take care of the patient’s post-op wound and manage healing. But, if the patient develops an infection and the surgeon needs assistance from an infectious disease (ID) specialist, the ID physician may bill separately for his or her services.
This is not a “blank check” to bill separately for services that are part of the surgical package when performed by other physicians. Medicare and other payers do not intend to pay twice for the same services. When the American Medical Association (AMA) Relative Value Update Committee (RUC) values surgical procedures, it includes the costs associated with the surgical package—including the history and physical (H&P) or clearance for surgery, typical inpatient follow-up care (which can include critical care level services for some procedures), and outpatient follow-up visits with removal of stitches and staples, dressing changes, and other appropriate post-op care. When these services, which are already paid as part of the surgical package payment, are performed by other physicians, there are a number of factors to consider when deciding how to bill.
A pre-op H&P is included in the surgical package; however, if the patient has medical conditions that require separate clearance and management beyond the standard H&P, these services can be billed separately. These circumstances might occur if the patient develops a new problem, or experiences another significant status change in the days prior to surgery (e.g., A urologist schedules a patient for a transurethral resection of the prostate (TURP). Because the patient also has a heart condition, the urologist sends the patient to a cardiologist for preoperative clearance). To establish medical necessity for the visit, you’ll need to link the appropriate diagnosis or signs and symptoms to any E/M service reported.
If the surgeon routinely sends his or her otherwise healthy patients to primary care physicians for clearance, even when there is no medical necessity for that service, the primary care physicians are in a tough spot. The clearance is part of the surgical package and shouldn’t be paid twice. There is also no medical necessity for a separate E/M service unrelated to the surgery. This means that the primary care physicians cannot bill for services, or must send patients back to the surgeon for this care.
If the surgeon reduces his package payment, primary care physicians can bill for the standard pre-op care; although, CMS dictates the surgical package should not routinely be broken. Unless the patient cannot reasonably receive this service from the surgeon because of geographic distance or other factors, Medicare considers it abuse to cause unnecessary extra costs and risks in processing two claims (one for the surgeon and one for the primary care physician).
Inpatient Follow up
Highly complex postop management is typical for patients who have had heart surgery, brain surgery, transplants, and other procedures requiring close monitoring in the intensive care unit (ICU)—even when everything is normal—and the reimbursement for that level of post-op care is included in the package payment. This can be a problem in hospitals with “closed” ICUs staffed by certified intensivists. If the intensivists try to bill their services in the post-op period, when the monitoring is simply the appropriate critical care level monitoring required after the procedure, they will find that these services are included in the package reimbursement and are not separately billable.
Find Billing Solutions
If the surgeon hands off work for which he or she has already been paid as part of the surgical package, the physician who performs this work must be careful how he or she bills.
If the surgeon has reduced his or her package billing using modifier 54 Surgical care only, the other physician(s) involved in the patient’s care can bill for his or her services using modifiers 55 Postoperative management only and 56 Preoperative management only. If this happens routinely, it’s possible the practice will be questioned because it adds claims processing costs to the payer, and is unnecessary if there is no reason for splitting the package.
Some surgeons have found that having this care provided by someone else with whom they have developed special contracts is very beneficial to them and to the patient. The surgeon pays another physician separately for the pre-op work included in the package payment. This can be especially advantageous because the patients get good care; the surgeons are not stuck in the clinic when they’d rather be in the OR; and the primary care physician providing follow-up care gets reimbursed for his or her work. Surgeons choosing this option should be careful to prove the full surgical package was performed for the patient because this issue is under Office of Inspector General (OIG) and recovery audit contractor (RAC) scrutiny.
Surgeons may hire someone into the practice to handle these patient care services, which resolves the aforementioned problems. With appropriate documentation, these individuals may bill separately for those medically necessary services identified as separately billable, and may be motivated to do so because they do not have surgical reimbursement to offset the cost of their practice.
When looking for ways to resolve payment issues related to the surgical package, physicians and surgeons must consider OIG, Medicare administrative contractor (MAC), RAC, and zone program integrity contractor (ZPIC) issues, as well as Medicaid and commercial payer issues. Proper surgical package billing should be a priority in any surgical office, or any other practice that collaborates with surgeons for care related to surgical procedures.
Marcella Bucknam, CPC, CPC-H, CPC-P, CPC-I, CCC, COBGC, CCS, CCS-P, is internal audit manager at Chan Healthcare. She is the long-time consulting editor for General Surgery Coding Alert, and has presented at five AAPC national meetings.
September 1st, 2012
By Susan M. Edwards, CPC, CEDC
Correct coding and billing for durable medical equipment (DME) raises many questions, such as:
- What constitutes DME?
- Besides the order and physician signature, what other information do I need to submit a claim?
- Are there modifiers?
To shed some light on ambiguous areas, we’ll answer these questions and more.
What Is DME?
Per Centers for Medicare & Medicaid Services (CMS) guidelines, DME is “medically necessary durable medical equipment, prosthetics, orthotics, and disposable medical supplies (DMEPOS), which includes oxygen and related supplies, parenteral and enteral nutrition, and medical foods.”
DME is also medical equipment that:
- Can withstand repeated use
- Is primarily and customarily used to serve a medical purpose
- Is generally not useful to a person in the absence of illness or injury
- Is appropriate for use in the home
- May include a rigid or semi-rigid device
- May be designed to support weak or deformed body part by eliminating motion
- May be used to immobilize a part to decrease pain and inflammation
- May be rented or purchased
What Do I Submit with Claims?
Providers must submit DME claims in accordance with Healthcare Common Procedural Coding System (HCPCS) Level II coding guidelines and national and local coverage determinations (NCDs and LCDs). Providers may only bill for the actual number of medical necessary units dispensed or delivered to a patient, regardless of the number of units allowed by policy and/or prior authorization.
Orders are required for any DME equipment to be covered under Medicare. To bill Medicare for DME, the ordering physician must be a Medicare enrolled physician.
Requirements on the orders include:
- Dispensing order
- Description of item
- Name of beneficiary
- Name of ordering physician and signature
- Date of order
- Quantity delivered
- Item brand name and serial number (if not custom)
Documentation should include detailed descriptions of the item, as well as any accessories and upgrades that will be used. Written orders for custom fabrications must specifically state “custom fabrication,” or the brand name being used. Custom fabrication involves more than trimming, bending, or making other modifications to a substantially prefabricated item. Prefabricated items are factory processed without a patient in mind, but may be altered to fit the patient.
Products and services must be medically necessary, safe, and appropriate for the course and severity of the condition using the least costly and equally effective alternative to meet the recipient’s needs. For all DME items, refer to your state’s Medicare policy.
To support medical necessity, include chart notes, surgery notes, and all supporting documentation for the product. You will need to verify that:
- The patient is eligible and meets the coverage criteria.
- Ask the patient about the items being dispensed. For example, “Have you had a wheelchair before?” or, “Do you receive any diabetic supplies from anyone else right now?”
- There is a supporting diagnosis.
- The beneficiary has signed and dated the forms.
- The physician has signed and dated the forms.
- The physician has provided his or her National Provider Identifier (NPI) number.
Note that some DME services or items will require prior authorization. It is critical to submit complete and accurate clinical documentation on prior authorization requests.
When a claim is received, Medicare will determine if the ordering/referring provider is required for the billed service. If the provider is not on the claim, Medicare will not pay. If the ordering/referring provider is on the claim, Medicare will verify that the ordering/referring provider is in Medicare Provider Enrollment, Chain, and Ownership System (PECOS) and eligible to order and refer.
Modifiers are frequently used on DME claims. The most common include (Note: These are not the full descriptions.):
RT/LT – Right/left
NU – New equipment
GY – Non-covered item
KX – Required for knee and ankle-foot orthoses
RR – Rental
UE – Purchase of used equipment
CG – May or may not have a specific LCD in place
GA – Does not meet medical necessity and ABN signed
GZ – Does not meet medical necessity and ABN not signed
GY – Item statutorily not covered
RA – Replacement of DME, orthotic, or prosthetic item
EY – No physician order
Use a Form to Be Sure You’ve Got All Relevant Information
Perhaps the best way to ensure you’ve documented all the necessary information is to use a specialized DME intake form. You can find a sample DME Intake Form at Noridian Administrative Services (NAS): www.noridianmedicare.com/dme/forms/docs/intake_form.pdf.
Any person in the office can use the form to ensure all the right questions are asked.
Lastly, remember to always check your DME Medicare administrative contractor (MAC) websites often for LCD revisions. Educating your physicians of documentation requirements and coverage guidelines will help you as the coder/biller make submitting claims for DME an easier process.
Ask the Patient to Sign an ABN if Coverage Is in Doubt
When ordering DME, determine whether you should ask the patient to sign an Advanced Beneficiary Notice (ABN). The ABN is a standard form to inform a patient that Medicare may deny coverage for a recommended or desired item or service. It explains why Medicare may deny the item or service, provides a cost estimate for the item or service, and notifies the patient of his or her responsibility to pay for the non-covered item or service if he or she chooses to receive it. In many cases, a provider cannot seek payment from the patient for unpaid Medicare services if he or she did not properly issue an ABN.
The ABN must be verbally reviewed with the beneficiary or his or her representative and any questions raised during that review must be answered before the patient signs and dates the ABN. CMS requires the provider present the ABN “far enough in advance that the beneficiary or representative has time to consider the options and make an informed choice.” A copy of the completed, signed form must be given to the beneficiary or representative, and the provider must retain the original notice on file for seven years.
When filing your claim, apply modifier GA Waiver of liability statement issued as required by payer policy, individual case on file when the provider believes the service is not covered and the office has a signed ABN on file.
Modifier GY Item or service statutorily excluded, does not meet the definition of any Medicare benefit or for non-Medicare insurers, is not a contract benefit applies when Medicare excludes the item or service from coverage. When you report modifier GY, Medicare will generate a denial notice that the beneficiary may use to seek payment from secondary insurance, for instance.
If the provider fails to issue an ABN for a potentially uncovered service, append modifier GZ Item or service expected to be denied as not reasonable and necessary to the claim. This indicates the provider cannot hold the patient financially responsible if Medicare denies the service, but will reduce the risk of fraud or abuse allegations for claims deemed “not medically necessary.”
The ABN CMS-R-131 form and instructions may be downloaded from the CMS website: www.cms.gov/BNI/02_ABN.asp.
Susan Edwards, CPC, CEDC, is a coding specialist at Copley Hospital in Morrisville, Vt. She is the president of the Newport, Vt. chapter, and she teaches Medical Terminology at the local adult learning center. Ms. Edwards is Northeast region one representative for AAPCCA, and secretary on the Board of Directors. She is also on the AAPC Ethics Committee.
July 1st, 2012
Let under-utilized appeals systems work for your practice.
By Heather M. Shand, CMAA, CBCS, CMB
Sometimes, even if you do everything right, you may end up with denied claims. Rather than throw up your hands and walk away, you should appeal. Yes, it will mean extra work, but the results are worth it: Most of the offices I’ve worked with have increased their revenue by at least 30 percent through strategic appeals. Here are seven steps to get you started.
1. Investigate Every Denial
If the insurer denies a claim, you must find out why and follow up to correct problems or collect payment if the denial is in error. Double-check everything about the claim to be sure you have grounds for appeal. Do not just re-file an unamended claim, hoping for payment the second time around.
For instance, if you are coding a surgery, review the “body” of the operative report to be sure all listed procedures actually were performed. Check modifier use. Maybe you missed a necessary modifier 25 Significant, separately identifiable evaluation and management service by the same physician on the same day of the procedure or other service. or 59 Distinct procedural service? If the insurer denies the claim for medical necessity, check to be sure the service was documented appropriately. Regardless of what the doctor does or how valid the service, you are sure to get a denial if the details are not documented sufficiently to support the claim.
If the insurer’s denial is unwarranted, or you are able to legitimately amend the claim to gain payment, it’s time to roll up your sleeves and ready yourself for an appeal.
2. Know Your Payers’ Appeal Process
Be sure you understand your rights to appeal. Most fully-funded plans have a designated external appeals process. Appeals may be more difficult with self-funded plans; you may wish to seek the advice of an attorney. Determining if plans are self funded or fully funded will help you prepare for appeals before you have to pursue them.
Know the type of problems and issues your state’s external appeal programs address, and whether appeal programs other than the state’s external appeal program and the insurer’s internal appeal programs are available to you.
3. Explain Yourself, Then Mark Your Calendar
Prepare a letter to the payer that explains exactly why you are appealing. If you’re unable to state in straightforward terms why you deserve payment, don’t expect to get it.
Be sure to submit appeals in the allowable time frame. This usually is 180 days. The time may be less if you are contracted. If you are contracted, review your rights; you may have given up your appeal right by being in network.
4. Send Appeals Certified
When submitting an internal appeal, send it via certified mail. You need to track that the insurer received the appeal. If you can’t track it, you have no proof it was ever sent.
If you did your homework, you know exactly how long the insurer has to respond to your appeal. If you do not have a response by the allowed time, file a complaint with your state insurance department. The state may ask for proof you sent the appeal (which is where your certified mail receipt comes in).
5. Be Wary of Internal Appeals
The insurer is likely to first pursue an internal appeals process. Some insurance companies require two internal appeals, while others require only one internal appeal.
Before you pursue an internal appeal, make sure it is mandatory. If it isn’t, and you choose to file internally with the insurer, one of two things could happen that are not to your benefit:
- The insurance company sends your appeal to an outside vendor for review. Such reviews are supposed to be independent, but often are not. Appeal decisions of this type can be binding, or can be used against you in later appeals.
- While you are pursuing an optional appeal, you may be missing out on your time to submit to the state. Most external appeal to the state must be sent within a certain time frame from your final adverse appeal determination letter. If you miss a deadline, you will lose your right to appeal.
Bottom line: Only agree to mandatory internal appeals. Do not accept optional appeals.
6. Direct External Appeals Appropriately
If you exhaust the internal appeals process without results, you must decide where external appeals need to be sent. For example, New Jersey has two appeal systems: one for experimental/medical necessity and another for incorrect payments. You also need to find out what your state requires you to send to them to process an external appeal.
For information regarding your state external appeals, go to your states’ departments of banking and insurance websites (or, call them). Most states require you to complete a form, and some states charge fees of $25-$250. If the appeal is in your favor, they usually return the money.
Note: There are avenues to collect incorrect payments/underpayments. You can use Maximus if your state has that program. Most states also have a complaint department you can use for these types of issues, which are outside of the normal appeal systems.
7. Be Strategic
Before pursuing an appeal, assess the amount of the claim and determine if it is worth the fees. Ask yourself: Does the amount of the claim warrant the fees you might lose? For instance, if the claim is $25, you most likely won’t risk $100 in fees to submit it. Keep in mind the insurance company also has to pay for external appeals, so this can be a bargaining chip.
Appeal systems are underutilized. The appeals systems can work for your practice and can increase your revenue. You will have to put time into this process, but the rewards are great. Keep in mind that all external appeals are paper reviews, not oral reviews. You need to make sure you are articulating your argument in an orderly, rational, and reasoned manner. If you have documented correctly and can articulate your agreement on paper, there is no reason why you cannot capture your lost revenue.
Know the Medicare Appeals Process
After an initial claim determination, providers, participating physicians, and other suppliers have the right to appeal, which may progress through as many as five levels. All appeal requests must be made in writing and must contain specific information (such as beneficiary name, dates of service, and other details), as detailed in the Centers for Medicare & Medicaid Services (CMS) publication “The Medicare Appeals Process: Five Levels to Protect Providers, Physicians, and Other Suppliers.”
First Level: Redetermination
A redetermination is an examination of a claim made by fiscal intermediary (FI), carrier, or Medicare administrative contractor (MAC) personnel; these are not the same people who made the initial determination. The appellant (the person filing the appeal) has 120 days from the date of receipt of the initial claim determination to file an appeal. No monetary threshold is applied to first-level appeals. The FI has 60 days from the date of receipt to issue a redetermination. If a provider disagrees with the FI’s redetermination the provider may seek the second level of appeal.
Second Level: Reconsideration by a Qualified Independent Contractor
Second-level appeals, or reconsiderations, are made to a qualified independent contractor (QIC). No monetary threshold is applied to second-level appeals. The provider must file reconsiderations within 180 days of receipt of the FI’s redetermination.
All supporting documentation, such as the initial demand letter and any evidence supporting the provider’s claim and the FI’s redetermination should be submitted with the reconsideration request. Any documentation not submitted prior to the issuance of the reconsideration decision may be excluded from subsequent levels of appeal. Additional evidence or documentation may be admitted only in subsequent levels of appeal upon a showing of “good cause.” Where the appeal is a matter of medical necessity, a QIC is required to have an independent panel of physicians or other appropriate health care professionals review the claim.
The QIC has 60 days from the date of receipt to issue reconsideration. If a provider disagrees with the results of the QIC’s reconsideration, the provider may seek the third level of appeal. If the QIC does not finish its reconsideration during the 60-day time frame, the provider has the option to accelerate to the next level of appeal by filing directly with the administrative law judge (ALJ).
Third Level: Administrative Law Judge Hearing
ALJ hearings are available if the amount in controversy totals at least $130. A request for an ALJ hearing must be filed within 60 days after receipt of the QIC reconsideration decision. The request also must be forwarded to the individuals who participated in the QIC panel.
Specific reasons why the defense disagrees with the level 1 and 2 findings, cogent arguments, and expert witness testimony at this level can be helpful because the ALJ will often seek clarification from the expert why the provider documented a certain way, or may ask the expert to explain why the defense disagrees with previous appeals.
ALJ hearing decisions must be issued within 90 days after receipt of the hearing request. If the ALJ hearing decision is not issued within the applicable time frame, the provider may request to the ALJ that their approval move forward to the fourth level of appeal. If a provider disagrees with the result of the ALJ hearing, the provider may seek the fourth level of appeal.
Fourth Level: Medicare Appeals Council Review
Fourth level appeals are made to the Medicare Appeals Council. There is no monetary threshold, although all claims must be at least $130.
A request for a Medicare Appeals Council review must be filed within 60 days of receipt of the ALJ hearing decision. A Medicare Appeals Council decision must be issued within 90 days of receipt of the request for review. If a Medicare Appeals Council decision is not issued within the applicable time frame, a provider may request for their appeal to move forward to the fifth level of appeal. If a provider disagrees with the results of the Medicare Appeals Council, the provider may seek the fifth level of appeal.
Fifth Level: Judicial Review in U.S. District Court
Judicial review in U.S. District Court is available only if the amount remaining in controversy totals at least $1,260. The request for judicial review must be filed within 60 days of receipt of the Medicare Appeals Court decision. There is no time frame for the judicial decision.
Heather Shand, CMAA, CBCS, CMB, is CEO of N&D Consulting, LLC, and Smart Healthcare Solutions. N&D is a consulting, billing, and collection management firm for all types of practices, specializing in revenue management. Heather has served on the advisory board for Lincoln Technical Institute. Prior to starting N&D Consulting, Heather worked for a multi-disciplinary practice for several years.
June 1st, 2012