By Delly Parham, CPC
As of April 1, the deficit control measure known as sequestration mandated a 2 percent decrease on payments to fee-for-service healthcare providers for services to Medicare Part A and B beneficiaries. Although hardly good news, cuts to the Medicare program are lower than cuts made to other federal programs. Here is what you should know about how the 2 percent decrease affects your reimbursement.
Under sequestration, be aware that:
- The current allowed fees remain unchanged
- The 2 percent reduction will not apply to the deductible or coinsurance owed by the patient
- The 2 percent is calculated only on the amount actually paid to the provider or patient, and not to the amount allowed
- The effects of sequestration apply differently for participating and non-participating providers
The 2 percent reduction began with dates of service and dates of discharge after April 1, 2013 (The mandate is divided into two parts: Part one of this two-part mandate covers only the period through 12/31/13. Part two covers the period 2014 through 2021, but there could be many changes by 2014.)
If you are a participating provider with Medicare (this means enrolled in the Medicare program for Part A or Part B beneficiaries), Medicare will apply the 2 percent reduction only to the amount paid to you. In other words, the 2 percent will be taken from only the calculated payment amount after the deductible is met, and it does not include the co-insurance. For example:
|Medicare approved amount
||Medicare allowable before deductible and coinsurance
||Patient pays this amount
|Amount after deductible
||Medicare will pay 80 percent of this amount
|Patient 20 percent coinsurance
||Patient pays this amount
|Medicare payment to provider
||Before 2 percent reduction
||2 percent reduction
|Paid to provider after reduction
||Provider is paid this amount
The claim adjustment reason code 223 will be displayed next to the line item on the electronic or paper remittance advice for Part B providers, and at the end of the claim for Part A providers.
If you are a non-participating provider (not enrolled in the Medicare program), and you see Medicare Part A and Part B patients, you will not be affected by this reduction; however, you must take the following actions:
- You must notify Medicare patients of this mandate.
- Your Medicare patients will be liable for the full limiting charge (115 percent of Medicare allowable). For example, if the total limiting charge is $109.25, you may collect this amount from the patient.
- Medicare will apply the 2 percent reduction to the actual amount paid to your patients, for example:
|Medicare approved amount
||Medicare allowable before deductible and coinsurance
||Patient is responsible for this (not reduced)
|Amount after deductible
||Medicare pays 80 percent of this amount
|Amount to patient before 2 percent reduction
||Apply 2 percent reduction
||2 percent reduction
||Patient will receive this amount
If you have any questions specific to your practice, contact your Medicare carrier or Medicare Administrative Contractor (MAC) in your region.
Mandatory Payment Reductions in the Medicare Fee-for-Service (FFS) Program – “Sequestration”
Federal Sequestration Payment Reductions
April 19th, 2013
Arm yourself with coding tips to withstand payer scrutiny AND get paid.
By David Peters, CPC, CPC-P
Whether you work in a hospital, physician office, or other health care setting, gone are the days when claims are processed, paid, and filed away. Instead, claims are dissected, scrubbed, and analyzed for numerous data systems. How does your coding measure up? Is it outstanding, or does it “stand out” in a bad way? Here are a few tips to ensure your claims can withstand the scrutiny they’re bound to receive.
Make Modifiers Matter
One of the most common errors reported by payers is the incorrect application of modifiers. Modifiers help tell the story of your coding. Make sure the story is fact, not fiction. The most frequently misused modifiers are 22, 24, 25, 59, and 79. Let’s go into a little detail for each.
Modifier 22 Unusual procedural service: Use this modifier judiciously, or you’ll throw up red flags with payers. To give you an idea of just how (un)common modifier 22 claims are, according to recent comments made by a Centers for Medicare & Medicaid Services (CMS) medical director for the Wisconsin Physician Services Corporation, only 2.5 percent of cases warranted use of this modifier to accurately denote increased work incurred.
Many coders have developed a habit of using modifier 22 whenever mention of “lysis of adhesions” is included in the operative report, for instance. But this is only appropriate when “extensive” or “significant” time was documented as spent freeing the organ due to adhesions.
Modifier 24 Unrelated evaluation and management service by the same physician or other qualified health care professional during a postoperative period: CPT® and CMS guidelines differ in the use of this modifier, so consider which payer will be processing the claim before you use it. CPT® guidelines state, “Follow-up care for therapeutic surgical procedures includes only that care which is usually a part of the surgical service. Complications, exacerbations, recurrence or the presence of other diseases or injuries requiring additional services should be separately reported.”
CMS guidelines, by contrast, state that Medicare’s global period includes any complications, unless they are significant enough to send a patient back to the operating room (in which case, you’d need to use modifier 78 Unplanned return to the operating/procedure room by the same physician or other qualified health care professional following initial procedure for a related procedure during the postoperative period).
Both CPT® and CMS guidelines agree that you should apply modifier 24 only on evaluation and management (E/M) codes when the examination is furnished by the same physician who performed the procedure. Note that “same physician” also refers to members of the same practice who are of the same specialty as the physician who performed the procedure.
Whoever the payer, you’re not getting paid unless the E/M visit is documented as unrelated to the surgery. When possible, assign a diagnosis code that is different from that used to report the procedure.
Modifier 25 Significant separately identifiable evaluation and management service by the same physician or other qualified health care professional on the same day of the procedure or other service: Some offices that perform minor procedures in-house add an E/M code with modifier 25 to every claim. Any provider using modifier 25 statistically more than the national average will be under scrutiny for possible fraudulent billing practices.
Here are some guidelines to keep in mind:
- Modifier 25 is not the equivalent of modifier 57 Decision for surgery for minor procedures. For example, if a patient presents to your office specifically for the removal of skin tags (11200 Removal of skin tags, multiple fibrocutaneous tags, any area; up to and including 15 lesions), it isn’t appropriate to include a separate E/M code because a minimal evaluation is inherent to the removal procedure.
- It is unnecessary to apply modifier 25 to your E/M code when billed with diagnostic testing codes (i.e., lab or X-ray codes). For example, a patient presents with a finger injury and the provider performs an X-ray to check for bone injury (73140 Radiologic examination, finger(s), minimum of 2 views) and a hematocrit (85014 Blood count; hematocrit (Hct)) due to extensive bruising. In this case, it would not be necessary to append modifier 25 to the E/M code to describe the E/M of the patient.
- Ask your provider to separate his or her E/M notes from any procedure performed so it’s clear to the payer that it’s a significant, separately identifiable service.
Modifier 59 Distinct procedural service: This is the most frequently misused modifier—so much so that the misuse of modifier 59 has been a part of the Office of Inspector General’s (OIG’s) annual Work Plan for identifying fraudulent claims since 2007.
Although appending modifier 59 will allow claims for multiple procedures to bypass National Correct Coding Initiative (NCCI) bundling edits, using it for the sake of getting a higher payment will get you into big trouble. Here are some tips to keep in mind when billing multiple procedures:
- When billing procedures with a potential bundling relationship in the NCCI edit tables, always append modifier 59 to the lesser code (column 2 in the NCCI edit tables). For example, consider 38221 Bone marrow; biopsy, needle or trocar and 38220 Bone marrow; aspiration only. Code 38221 is a column one code, and 38220 is a column two code. If both were performed at the same site, it would be inappropriate to report both codes. If they were done as distinct procedures at two different anatomic sites, however, it would be appropriate to report both with modifier 59 appended to the column two code (e.g., 38220-59).
- Use modifier 59 only when a more descriptive modifier (e.g., a modifier that describes location) is not available. For instance, if a patient has a malignant lesion measuring 0.4 cm removed from the right arm (11600 Excision, malignant lesion including margins, trunk, arms, or legs; excised diameter 0.5 cm or less), and another lesion of the same size and type from the left arm, append modifiers RT Right side and LT Left side, rather than report the second code with modifier 59.
- Do not report modifiers 51 and 59 on the same code.
- In general, modifier 59 is used to denote: different session or patient encounter; different procedure or surgery; different site or organ system; separate incision, excision or lesion; or a separate injury not ordinarily encountered or performed on the same day by the same provider.
Modifier 79 Unrelated procedure or service by the same physician or other qualified health care professional during the postoperative period: Apply this modifier for a second surgery unrelated to a prior surgery. A common example is bilateral cataract surgery. This is usually done on each eye individually, several days apart. Report the second procedure with modifier 79 appended to the procedure code, as the global period for the first surgery is still in effect. Do not use modifier 79 for staged (modifier 58 Staged or related procedure or service by the same physician or other qualified health care professional during the postoperative period) or repeat (modifier 76 Repeat procedure or service by the same physician or other qualified health care professional) procedures.
Getting E/M Right
Now that we’ve addressed modifiers, let’s look at E/M services to make sure you’re coding at the correct level.
We’ve all been taught the “bean counter” method of adding up the key components of history and examination and scoring your code based on those numbers. But keep in mind: Medical decision-making (MDM) should be the primary component for selecting the correct level of care.
In these days of electronic health records (EHRs), it’s easy to document a comprehensive history and a comprehensive examination using templates and information from previous visits—but if the MDM is straightforward, that will be the determining factor of the visit. Per the Medicare Internet-Only Manual, pub. 100-4, chapter 12:
“Medical necessity of a service is the overarching criterion for payment in addition to the individual requirements of a CPT® code. It would not be medically necessary or appropriate to bill a higher level of evaluation and management service when a lower level of service is warranted. The volume of documentation should not be the primary influence upon which a specific level of service is billed.”
Remember also that time may be used as a factor in determining the correct level of service—but this should be the exception, not the rule. Some offices have taken up the habit of billing all E/M services based on time. Once again, with template phrases, it’s just too easy to tag, “Total time spent face to face with patient was 60 minutes and more than 50 percent of that time spent in counseling.” In an actual case, when an office was audited for consistently billing Level V services, it was discovered all patients were booked in 30-minute appointment slots, and there were no patient wait times reported (which would be impossible if each patient was receiving 60 minutes or more of service).
Other E/M practices that will raise red flags with payers are:
- Billing every patient visit at the same level of care
- Frequently submitting corrected or amended claims
- Splitting claims for the same day of service into multiple claims
When using EHRs, payers will become suspicious if multiple chart entries for office visits carry identical verbiage in the records.
The “Where” Matters
Another area under scrutiny by the OIG and others is reporting the incorrect place of service (POS) on claims. Because the POS can effect payment, accurate reporting is critical.
Services performed in an ambulatory surgery center (ASC) or hospital outpatient facility are paid at a lower rate than services performed in the office setting. Be accurate with all POS designations. Outpatient hospital (POS 22) and ASCs (POS 24) are not the same thing, just as skilled nursing (POS 31) and custodial care (POS 33) are different.
Speaking of hospital services: Always make certain the time element for both hospital discharge and critical care services is properly documented in the patient record. Time is the only descriptor of 99238 Hospital discharge day management; 30 minutes or less and 99239 Hospital discharge day management; more than 30 minutes, and includes face-to-face time as well as “floor time.”
Watch Out for Individual Payer Guidelines
Lastly, payers may have their own specific rules—be aware of them. Billing bilateral procedures is a prime example. Some payers expect the code to be submitted once with modifier 50 Bilateral procedure, which they pay at 150 percent of the allowable. Others may want the code submitted twice, once without a modifier and again with modifier 50, which will pay at 100 percent for the first line and 50 percent for the second line. Not knowing these rules could result in underpayment.
Here’s another example: Most payers say it isn’t necessary to use modifier 51 Multiple procedures for multiple surgery procedures because their systems will automatically reduce those services. Not all payers will resequence your coding order, however. It’s important to list the code with the highest relative value unit (RVU) as the first code, or run the risk of having a lesser code used as the primary procedure and a higher RVU code reduced by 50 percent under the multiple procedure guidelines.
David Peters, CPC, CPC-P, is contracts manager for Sutter Pacific Medical Foundation, Santa Rosa, Calif.
March 1st, 2013
ICD-10 Monitor’s Talk Ten Tuesday interviews this week included AAPC National Advisory Board Member Annie Boynton, CPC, CPC-H, CPCO, CPC-P, CPC-I, RHIT, CCS, CCS-P, CPhT, who offered an update on the state of payer readiness for ICD-10. She spoke of how critical it was to have good education, training, and communication between the payers and the provider networks.
“There are a number of very savvy providers out there, and facilities out there, who are ahead of the curve,” she said. “But in our experience thus far, we have seen that a large number of providers are not aware of or have not received enough education about what it means to test with a payer and why it is important.”
Listen to the archived podcast.
January 30th, 2013
Although it can be time-consuming, it is absolutely essential to closely review your medical practice’s insurance contracts before you sign on the dotted line. AAPC National Advisory Board’s Member Relations Officer Melody S. Irvine, CPC, CPMA , CEMC, CFPC, CPC-I, CCS-P, CMRS, recently published an article in Physicians Practice in which she explained what deserves your extra attention in the insurance contract review process.
“There is an imbalance of power between the insurance companies and physicians,” she points out. “Insurance companies are responsible first to the shareholders, second to the customers, and then last to the contracted vendors.”
Read the full article.
January 16th, 2013