For the Medicare program, guidance runs through a sharply defined hierarchy, ranging from the highly concise formal guidance offered at the Social Security Act level on down to the much more verbose, but less authoritative, guidance found in pronouncements from Medicare administrative contractors or various informal sources such as question & answer documents and open-forum teleconferences.

Here is a listing starting with the SSA.

  • Social Security Act (SSA)
  • Congressional Laws
  • United States Code (USC)
  • Code of Federal Regulations (CFR)
  • Federal Register (FR)
  • CMS Manuals
  • National Coverage Decisions (NCDs)
  • CMS Medicare Learning Network
  • Medicare Questions & Answers
  • Medicare Open Door Forums
  • Medicare Administrative Contractor (MAC) Guidance
  • Local Coverage Decisions

In developing arguments and positions relative to possible overpayment cases, the big question is, “what sources can I depend upon?” Not only is it a major question, but the answers can change over time.  For instance, CMS has become increasingly fond of issuing clarifying guidance that actually represents major changes in guidance.

Turn of a Phrase

You may see wording from CMS that reads like so: “It is our policy, and has always been our policy, that …”. This places you in a precarious position. You may have been following the old guidance, but now CMS appears to be implementing a policy change retroactively.  While CMS is not supposed to be able to do this,1 CMS will claim that the guidance is simply clarifying, not changing.

As an example, consider critical care services under APCs. There are two critical care CPT codes:

    • 99291 – Critical Care – First 30-75 Minutes
    • 99292 – Critical Care – Each Additional 30 Minutes

When APCs were implemented, CMS decided to make a single payment for any critical care service, paying only for 99291 and not for 99292. Thus, for APCs, time units were not relevant. Payment would be made for less than 30 minutes as long as critical care was provided.2 For 2007, however, CMS indicated that timing did apply: that is, critical care must be provided for at least the minimum 30 minutes. And not only did CMS change the interpretation, they stated:

    “In fact, as stated by CMS in the 2007 final OPPS rule, the 30-minute minimum requirement has always applied and will continue to apply for CY 2007 and beyond.”3

Fortunately, this particular issue is far back enough that it should not be a RAC issue as such. However, this provides a very good example as to how you may be relying on guidance from CMS to code and bill in a particular fashion, only to be told later that you misinterpreted CMS’s guidance. Most likely the RACs will jump on situations like this with gusto.4

Blood Transfusions

Another example of ambiguous guidance exists with blood transfusions. Very welcomed guidance was provided by CMS through Transmittal 496, issued March 4, 2005, which updated Medicare Publication 100-04: the Medicare Claims Processing Manual. Guidance for blood transfusions included the following statement:

    “Transfusion services codes are billed on a per service basis, and not by the number of units of blood product transfused. For payment, a blood product HCPCS code is required when billing a transfusion service code. A transfusion APC will be paid to the OPPS provider for transfusing blood products once per day, regardless of the number of units or different types of blood products transfused.”

At issue is the proper interpretation of the phrase “on a per service basis.” While most blood transfusion occurs during a single service or session, there are circumstances in which a patient may present two different times during the day (e.g., once in the morning and once in the afternoon) to have a unit of blood transfused each time. The question then becomes, is it appropriate to use the “-76” or “-77” modifier5 in this type of case?

Conflicting Guidance

From the RACs’ perspective, the automated reviews will look for a code like 36430 listed with more than one unit, then an overpayment will be asserted upon identifying such a scenario. If you have this two-visit situation and you did not use a modifier, the RAC will claim an overpayment.

Another issue you may encounter is guidance from you FI, carrier or MAC that is incorrect or at least seems to conflict with higher-level CMS guidance. When you receive bulletins or newsletters from your MAC, note that there are often disclaimers such as:

    “The information contained in this fact sheet is provided as a customer service only. If any part of this information contradicts CMS regulations or US Code, those sources will supersede the information contained here. Medicare laws and regulations change frequently, so it is important to be sure that you have the most current fact sheet.”6

Modifier 25

Let us consider an example concerning the use of the “-25” modifier under APCs on the hospital side. The “-25” is used to identify a significant, separately identifiable E/M service rendered on the same date as a medical or surgical procedure. This is a payment modifier.  If the “-25” is not used, payment is bundled into the medical or surgical procedure performed on the same date of service (typically a Status Indicator “S” or “T” service).

The description of the “-25” modifier is found in the CPT Manual issued by the American Medical Association, as the AMA is the official standard code set maintainer. However, CPT has been written for physicians, and language in CPT often must be modified to use the proper codes set for hospital outpatient services.

The description of the “-25” modifier allows for its use even if there are not different diagnoses; that is, the diagnosis code for the “-25” does not have to be different from the diagnosis code or codes for the medical or surgical procedure performed on the same date.  This certainly can occur in the hospital setting.

For instance, a nurse practitioner may perform a pre-surgery H&P just before a patient goes into surgery. The NP and surgeon will file their own professional claim forms. The hospital will file one claim form with an E/M for the pre-surgery H&P, then a surgical code or codes for the surgery. The diagnosis codes would pertain to the surgery. The “-25” will be used to appropriately gain payment for the E/M level.

However, an FI might issue guidance that appears to contradict the description of the “-25” modifier. For instance, Georgia Medicare, in their Medicare Alert Bulletin 2255, dated Feb. 17, 2009, issued the following paragraph:

“Modifier 25 should be appended only to E&M service codes. Only in those instances where a medical visit (E&M) on the same date as a diagnostic or therapeutic procedure (‘S’ or ‘T’ APC status indicator code) is separately identifiable service for an unrelated problem should the facility receive separate reimbursement for the evaluation and management service. A modifier 25 appended to the E&M code would be used in these cases to indicate that a medical visit occurring the same day was unrelated to any “S or T” procedure that was performed. The modifier 25 allows the facility to receive a separate reimbursement for the evaluation and management service. Modifier 25 should not be appended to an E&M code unless there is a diagnostic or therapeutic (S or T procedure) billed on the same claim and then only when the evaluation and management service is unrelated to the diagnostic or therapeutic procedure performed. (Bold as found in the document.)

This directive appears to emphasize the fact that there must be different diagnoses indicating unrelated problems. The phrase differentiating diagnoses is used in a case like this. While this directive appears to contradict what is in the CPT Manual entirely, is it possible that a RAC would pick up this type of guidance and then rely on it to assert overpayments?

RACs and Modifier 25

Not only would a RAC pick this up, this situation would be an immediate candidate for automated reviews. All the RAC would have to do is look at any claim that has the “-25” modifier and then check to see if there are diagnosis codes from two different families. If there is a single definitive diagnosis or if all the diagnosis codes are related, the RAC will claim an overpayment for the E/M level.

    Note: There are many nuances with this situation. First of all, the whole concept of related diagnoses must be defined. For the DRG Pre-Admission Window, the definition of related diagnosis is that there must be an exact match between the principal diagnosis for the inpatient admission and the primary diagnosis for the outpatient services. Second, decisions must be made about signs, symptoms and ill-defined conditions relative to definitive diagnoses.

Another subtle example of guidance (or lack thereof) coming from a MAC is when a healthcare provider contacts the MAC with billing and coding questions. Sometimes the answer from the MAC is, “we don’t know what to tell you. Send the claim through and if it is paid, then you are doing it correctly.” You don’t have to have many years of experience in healthcare to realize that just because a claim goes through the adjudication process, it is correct.

When preparing your case files or developing portfolios of supporting documents, you may be addressing much more than a specific claim. You may be addressing a guidance issue that can include incomplete guidance, improper guidance, conflicting guidance or no guidance at all. Anticipate that the RACs will use any level of guidance available to assert overpayments.

About the Author

Duane C. Abbey, Ph.D., CFP, is an educator, author and management consultant working in the healthcare arena. He is president of Abbey & Abbey, Consultants, Inc., which specializes in healthcare consulting and related areas. His firm is based in Ames, Iowa. Dr. Abbey earned his graduate degrees at the University of Notre Dame and Iowa State University.

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