spencerCAs providers keep hearing over and over-from RACs and their own Medicare contractors, insufficient documentation is frequently the reason for claim denials.


Whether these denials come up front from Medicare payers or on the back end during RAC reviews, the point is clear that providers need to spend more time ensuring that the documentation submitted supports services provided and that the services billed are medically necessary for the settings.


By this time, providers should be tired of hearing or seeing the phrase “not medically necessary.” These three little words seem to lurk around the corner of every Medicare claim submitted. “Is it, or is it not, medically necessary?” is one of the key questions asked by RACs as they perform their reviews of Medicare claims submitted.


Unfortunately, too many providers seem to ignore the legwork required to answer this question, because, as RAC findings reveal, they go ahead and bill for procedures, services and supplies without really knowing the answer. The result is, of course, that RACs identify errors and collect overpayments and fees.


Focus on Coverage Upfront


Reducing the number of denials or overpayments related to insufficient documentation, incorrect procedure codes, uncovered diagnosis codes, etc. starts by incorporating the following advice into everyday practices.


First, here’s a website you will want to bookmark: http://www.cms.gov/medicare-coverage-database/overview-and-quick-search.aspx. As you’ll see when you visit, it is the home page of the Medicare Coverage Database, which contains all national coverage determinations (NCDs) and local coverage determinations (LCDs), local articles, and proposed NCD decisions as well as other national coverage policy-related documents.


On this site, get into the practice of checking:


National coverage determinations (NCDs), which the Centers for Medicare & Medicaid Services issue; and Local coverage determinations (LCDs), which individual Medicare contractors issue.


Medicare contractors develop and/or adopt LCDs when there is no NCD or when there is a need to further define coverage.  A local policy may consist of two separate, though closely related, documents: the LCD and an associated article. The LCD only contains reasonable and necessary language. Any non-reasonable and necessary language a Medicare contractor wishes to communicate to providers may be done through the article. At the end of an LCD that has an associated article, there is a link to the related article and vice versa.


Know the Billing Rules


Two other websites need to be bookmarked. One of the most important is http://www.cms.gov/Transmittals/2011Trans/list.asp, which lists memos issued by the Centers for Medicare & Medicaid Services (CMS). The agency uses the memos to transmit or communicate new or changed policies or procedures that will be incorporated into its online manual system. The cover or transmittal page summarizes and specifies the changes and revised pages from the manual are included as an attachment.

In fact, the online manual system is another  important website: http://www.cms.gov/Manuals/IOM/list.aspj. At this site, providers will find a list of manuals for different types of providers. For hospitals, the Medicare Claims Processing Manual and the Medicare Benefit Policy Manual are two key resources, and a third is the Medicare National Coverage Determinations Manual.


The best thing you can do for your bottom line is to stay informed about Medicare policies and payments by using these resources and others available at the CMS web site (http://www.cms.gov/home/medicare.asp). Start by listing your highest-volume procedures or claims for which you receive the highest number of denials.


Before you submit a claim, find out what you can about coverage and billing rules. With more knowledge you can contact your individual Medicare payers to answer questions that fall into the gray areas.


Knowledge is power.


About the Author


Carol Spencer, RHIA, CHDA, CCS, is a senior consultant with Medical Learning, Inc. (MedLearn®) in St. Paul, Minn. She brings more than 20 years of experience in health information management, coding, teaching, data quality and revenue integrity. She is an accomplished local, regional, and national speaker and author covering topics such as recovery audit contractors (RACs), payment audits, MS-DRG reimbursement systems, ICD-9-CM coding, and is an AHIMA-approved ICD-10-CM/PCS Trainer. Ms. Spencer is a thought-leader in data analytics and an expert on compliance in coding, query, and clinical documentation improvement strategies.

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