Q: Is there any way to know which Medicare claims might be at higher risk for denial than others?
A: According to the General Accounting Office, in 2001, 161 million or 21 percent of Medicare Part B claims were rejected or denied.
(See the report, Medicare Appeals, available at www.gao.gov/new.items/d03841.pdf.) The GAO report makes an important distinction between rejections and denials. Claims that can't be processed (duplicates or claims missing information) are rejected. These claims may be resubmitted, but not appealed. Claims that can be processed but are denied because they are deemed to be in error may be appealed but not resubmitted.
In 2001, carriers rejected about 60 million claims because they were duplicates or were missing information. About 100 million claims were denied. The lion's share of denials were because they were:
• medically unnecessary (29 percent);
• services not covered (24 percent); or
• the claim was part of a global fee for a procedure (13 percent).
Q: What's the best way to avoid common claims mistakes?
A: In terms of establishing medical necessity, there is no way to over-emphasize the importance of documenting it in the patient chart. Donna McCune, vice president of Corcoran Consulting Group, urges you to regularly review chart documentation.
Regarding coverage decisions, Ms. McCune advises you to stay current on local and national coverage decisions: "Local Medicare policies can be found on your Medicare carrier website. These typically include indications for a service, documentation requirements, approved diagnosis codes. The CMS web site (cms.gov) contains a wealth of information on coverage issues and policies." She also suggests that you review the use of the Advanced Beneficiary Notice (ABN) for noncovered services.
Ms. McCune says claim errors involving global fees can be reduced by learning more about global surgery policies, global periods for procedures, and the correct use of modifiers.
"In the CMS web site, you can check on codes that are bundled or mutually exclusive," she says. "The web site also contains the Claims Processing Manual, which provides the regulations on what can and cannot be billed during the global period. The Medicare fee schedule lists global surgery days."
Q: Is there a system or process to reduce the number of Medicare claims rejections or denials?
A: Ms. McCune says you should determine the cause (data entry problems, coding problems, timeliness) and fix them through billing staff education. This includes:
• understanding what the Medicare denial codes mean;
• developing policies and procedures to deal with claim denials; and
• understanding the appeals process to deal with claim denials.
Speaking of appeals, how often are Medicare denials appealed?
There has been a big increase in appeals taken above the carrier level. These appeals are filed with the CMS Office of Hearings and Appeals (OHA) and the Medicare Appeals Council (MAC). The GAO report says these appeals grew by 500 percent from 1997 to 2001.
To learn more about the process, visit the CMS website: http://www.cms.hhs.gov/medlearn/appeals_broch.pdf
Q: When is it "worth" appealing a rejection at this level?
A: Although it may sound simplistic, experts say you shouldn't write off a claim that has been denied by the local carrier unless you feel it was truly justified.
"Even though appeals can be expensive in terms of staff time and resources, if the carrier incorrectly adjudicated the claim in the first place, it's essential to appeal to alert the carrier (and CMS) to possible carrier-related problems," notes Carol A. Poindexter, a health-care attorney with Shook, Hardy and Bacon in Kansas City, Mo. She explains that when CMS sees an increase in the number of appeals, questions arise about the carrier since the increase may indicate some type of procedural problem on the carrier's end. So, anytime you get a denial, and you think the carrier's determination is wrong, it's probably worth the effort to appeal.
Q: What kind of advice/counsel should we seek?
A: Ms. Poindexter says that, in general, outside legal counsel need not be involved with routine single-claim appeals. If, however, there is a significant issue or substantial reimbursement amounts involved, asking your attorney for advice is always a safe and prudent course.
Q: What chance do we stand of winning the appeal?
A: In general, your chances are good. An Office of Inspector General report (OIG Report, 1999 OEI-04-97-00160) says that 76 percent of claims denied were reversed on appeal.
"Whether an appeal will be successful depends, of course, on the particular facts and circumstances," says Ms. Poindexter. "Prevention is the best way to avoid denials. A significant number of appeals are due to insufficient documentation, etc. Review the claim before its submitted and it may help the practice save time and money by not having to resubmit the claim, or go through a long appeals process."
