CMS Reissues Instructions for Denials on Related Claims
August 14, 2014 11:11 AM
The Centers for Medicare & Medicaid Services (CMS) has issued Change Request (CR) 8802 that allows the Medicare Administrative Contractors (MACs) and Zone Program Integrity Contractors (ZPICs) the discretion to deny payment on claims that are related. CMS defines a “related” claim as one where the documentation associated with one claim can be used to validate another claim.
Related claim issues are subject to CMS approval prior to the contractor’s initiating a related claim review. In addition, the MACs and ZPICs must post the related claim issue for review on their web site review within one month of initiation. The Recovery Audit Contractors (RACs) may also conduct related claim reviews but these contractors are already subject to CMS approval of claim review issues and are required to post the approved issues on their web site as part of their Statement of Work.
The following related claim situations have been approved by CMS.
The MAC performs post-payment review/recoupment of the admitting physician's and /or surgeon's Part B services. For services related to inpatient admissions that are denied because they are not appropriate for Part A payment (i.e., services could have been provided as outpatient or observation), the MAC reviews the hospital record and if the physician service was reasonable and necessary the service will be recoded to the appropriate outpatient evaluation and management service. For services where the patient’s history and physical (H&P), physician progress notes or other hospital record documentation does not support the medical necessity for performing the procedure, post-payment recoupment will occur for the performing physician’s Part B service.
In February of this year, CMS issued CR 8425 which gave the claims review contractors the discretion to automatically deny claims submitted that are related to other claims where non-coverage or non-payment decisions have been determined though medical record review. CR 8425 did not require CMS approval prior to denying related claims and was rescinded in March.
Although CR 8802 addresses issues only related to hospital and physician claims, we fully expect at some point to see more approved issues affecting other provider types. Therefore, this policy change could have significant implications for home health and hospice providers since they often submit multiple claims for a single incident of illness - for example, submitting claims for several episodes for home health services or several months for hospice care. If the contractor determines one claim does not meet Medicare payment criteria, any related claim could also be denied.
Click here to view the CR 8802.