Preparedness offers the best results, and hospitals and physicians are encouraged to be proactive rather than reactive in their approaches. Conducting internal audit reviews to evaluate areas of concern, establishing baseline policies and procedures to ensure proper coding and billing, and commencing investigative actions for problems found provides a solid foundation as providers adjust to the Centers for Medicare and Medicaid Services (CMS) recovery initiative.


The appointed RAC for Region C, Connolly Consulting, recently announced a list of seven issues they intend to target initially. This list includes IV hydrations. For this service, significant code changes and corresponding coding and billing guidelines were put into place effective Jan. 1, 2006. Drug administration codes G0345 – G0363 were replaced by CPT codes 90760 – 90779. These codes again were replaced Jan. 1, 2009 by 96360 – 96549, including codes 96360 – 96361 for IV hydration. These changes can be a source of billing errors. In addition, problems can occur with use of codes and supporting documentation. As presented below, an internal audit can help a provider identify areas that might be vulnerable to RAC audits.


With the scope already defined (CPT codes 96360 and 96361 for records billed in 2009, and codes 90760 and 90761 for records billed from Jan. 1, 2006 – Dec. 31, 2008), the first step of an internal audit would be gathering a sufficient sample of IV hydration cases. The size of the sample depends on the volume of these services, their complexity, the number of providers and whether there is any suspicion or prior evidence of issues with billing IV Hydration services (all of these factors serve to increase sample sizes). No fewer than 30 records should be reviewed. The sample should include old cases (cases billed between Oct. 1, 2006 and Dec. 31, 2009), recently billed cases (Jan. 1, 2009 – July 31, 2009), and pre-billed cases. By selecting these three types of cases, the provider can determine if the coding/billing rule changes effective Jan. 1, 2006 were correctly implemented in old cases, whether the coding/billing rule changes effective Jan. 1, 2009 were correctly implemented in recently billed cases and whether the most recent cases are being coded/billed correctly.


The criteria for the audit should reflect  the focus of the recovery audit reviews: payments on services for which providers failed to provide documentation when requested or submit sufficient documentation to support claims, payments for services that are not coded properly and payment errors including claims paid twice due to duplicate submission.




Since coding and billing of IV hydration solely is dependent on accurate and legible medical record documentation, this should be the starting point of internal audits. Clear notation should exist for actual start and stop times for each bag, the route of administration, and whether a flush or hydration is performed. If only a flush (clearing of lines) is performed, the procedure is not coded unless the flush occurs with medication (referred to as an “IV push”). An IV push may be coded. Documentation such as “over 1 hour” in an order; 600cc infused with no start or stop times; medically unlikely amounts of medications versus route (e.g. “NS 400cc per hour flush”);  “Initial line (INT) removed/hep-lock discharged”; administration times that are marked through and/or illegible; and times recorded that do not make sense (i.e. start time 10:09 with stop time 9:19) cannot be coded and thus should not be billed.  The lack of clear documentation initially could result in lost revenue or the issuance of a RAC demand letter for repayment of the reimbursement received.


As referenced in AMA’s CPT 2009, IV hydration infusions typically require direct physician supervision for purposes of consent, safety oversight or intra-service supervision of staff. The physician should document his/her supervision of IV hydration procedures performed by nursing staff.


Coding and Billing


After documentation has been reviewed, internal auditors should turn the focus to the specifics of IV hydration coding and billing guidelines.  If the aforementioned coding changes were not implemented in a timely manner, charge masters and/or charge sheets might have incorrect codes listed. Internal auditors should review these areas to be sure all changes were made. Claims billed with improper codes may result in incorrect reimbursement.


Using the same audit sample, auditors should validate the following for each case (based on coding guidelines taken from AMA-CPT 2009, which have remained unchanged since 2006):


  • Only one “initial” service code [96360] may be reported per patient per day unless protocol or circumstances require that two separate IV sites be used.


    • On rare occasions, a patient can have two initial IV hydration procedures if, for example, the IV in the left arm blows out or has complications and another IV is started in the right arm. Clear documentation of start and stop times is a must for both IV services. Notation of  the reason(s) for the failure of the first initial hydration must be stated in the record. Additional documentation must describe the second initial hydration procedure in the other arm.
    • The time for the first initial hydration service must be indicated as 31+ minutes. If the initial hydration started at 9:00 and stopped at 9:30, the provider cannot bill for this service! The second initial hydration can be coded only if it goes beyond 31 minutes. If neither the first nor the second initial hydration lasts longer than 31 minutes, neither one should be coded or billed.
    • If a second “initial” administration code is appropriate, the code should be listed with modifier 59 appended.


  • For all IV Hydrations, start and stop times must be documented for proper coding and/or billing.


  • For hydration infusion intervals of greater than 30 minutes that go beyond one-hour increments, each additional hour is coded with 96361. No modifier is required.


  • IV Hydration codes should be billed with chemotherapy codes only if the hydration is given before or after the chemotherapy (if chemotherapy is given simultaneously with an IV hydration, the provider should not bill for the IV hydration). Look at claims that contain a Chemotherapy CPT code together with an IV hydration code for documentation of start and stop times in the record.


  • IV Hydration codes should be billed with Therapeutic Infusion codes only if the hydrations are given before or after the therapeutic infusion (if both infusions are given simultaneously, the provider should not bill for IV hydration). Look at claims that contain a Therapeutic Infusion CPT code together with an IV hydration code for documentation of start and stop times in the record.


  • IV hydrations ARE NOT coded and/or reported with blood transfusion codes, regardless of when the IV hydration is administered.


Charge Process Audit


The audit sample should be reviewed further in collaboration with charge entries on the claims to ensure that there is no duplication of charges from improper coding of services (i.e. duplication of codes on one claim). If this is occurring, the provider should review its charging processes to ensure that IV hydration charges aren’t being captured on the floor (e.g. by the charge nurse), followed by retrospective capture by the medical record coder, resulting in double billing of the same service.


Internal audits can provide excellent insight into a facility’s and/or physician’s practices, drawing attention to those  areas of concern that can be addressed successfully prior to external corrective action. Again, this can be achieved by first thoroughly examining the medical record documentation used to code, followed by validating whether coding guidelines are being followed, and finally comparing coding summaries and charge entries to avoid double billing. This proactive approach allows for potential liabilities to be determined and corrected; additional education to be provided where needed; revisions of policies and procedures to be made were necessary; overpayment to be returned with supporting documentation and explanation for the refund; and appeals to be submitted for facility underpayment (if found within 30 days of discharge) or in response to RAC demand letters with supporting documentation and explanation.




American Medical Association. 2009.  Current Procedural Terminology, 2009 edition. Chicago: AMA


Ingenix.  2008. Recovery Audit Contractor Audit High Risk Areas. USA


ED. NOTE: Seven, CMS approved audits for Region C are expected to be approved for other Region C states including Florida, New Mexico and Colorado in the next several weeks. Our four part series will help you understand three major audit issues – Blood Transfusion, IV Hydration and Hospital Outpatient Rehab. We conclude our series with an analysis of the physician risk in the RAC Process. Next Wednesday, “RACs and Blood Transfusions,” by Carla Engle, MBA.


About the Authors


Ashley L. Brandon, MBA, RHIA, CCS, is an Internal Coding Audit coordinator for Precyse Solutions, LLC.  Prior to joining Precyse she acted as a Corporate DRG Coordinator for a network of 23 facilities nationwide.  She has more than eight years of experience in health information management specializing in coding, reimbursement, and other business related functions.  In her position at Precyse Solutions, Ms. Brandon supports the Precyse Solutions Compliance Program by performing inpatient, ambulatory surgery, emergency room, outpatient, and E/M management coding audits on new hires and, on an annual basis, on all other coding colleagues.  She mentors new colleagues as needed.  In addition, she performs MS-DRG reimbursement audits, data quality/accuracy audits, physician services audits, and compliance audits. Ms. Brandon provides educational services to colleagues as well as, training and/or other services as requested by client hospitals.


Cheryl E. Servais, MPH, RHIA, has more than 25 years of experience in Health Information Management. In her position at Precyse Solutions, Ms. Servais’ responsibilities include planning, designing, implementing and maintaining corporate-wide compliance programs, policies and procedures, and updating them to accommodate changes in federal and other regulations. In addition, she oversees training and development programs related to ethics, compliance and patient privacy; develops and chairs compliance and privacy advisory committees at the Executive and Board levels and takes an active role in professional organizations.

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