By Alexander Miller, MD,
August 01, 2014
A seemingly perfectly medically valid and appropriately submitted claim for a service is rejected by an insurer. What went wrong?
There are several potential reasons for non-payment of a claim by an insurer. They range from claim submission errors and inaccuracies, to misuse or non-use of modifiers, to billing for non-covered services. One may stratify claim rejection reasons into the following four categories:
- Incorrect insurer billed
- Incorrect information submitted on the claim
- Bill submitted for non-covered services
- Duplicate claim submitted
Occasionally, a claim is sent to an insurance plan for services rendered prior to initiation of insurance coverage or for services done after coverage had terminated, or to a plan that is secondary to a primary insurance that should be billed first, or to a plan that appears to have a contractual arrangement with the physician but in actuality does not. Patient intake and billing staff should build a keen awareness for potential insurance coverage snafus. Each patient’s insurance card data requires close examination in order to determine coverage, and may require telephone or Internet confirmation. Most recently, as a consequence of the Affordable Care Act (ACA), some patients with individual (non-group) insurance have been shunted to ACA-compliant plans with narrowed physician networks. The insurance cards that these patients present will not necessarily overtly identify them as members of a narrowed network. It is imperative that front office staff be alert to the insurance identification card euphemisms and plan identification number nuances that will distinguish an ACA-compliant plan with a narrowed physician network from one with a traditional, broader network, as many physicians have chosen to avoid joining the ACA-compliant networks or found themselves removed from those networks. Both physicians’ staff and patients have been surprised when services paid previous to the ACA are denied as non-covered or paid at a reduced, non-participating physician rate. [pagebreak]
A variety of data submission errors account for the majority of claim denials. The most common errors are:
- Incorrect patient information data
o Specifically for Medicare, the beneficiary’s full name must be submitted exactly as it is printed on the patient’s Medicare ID card.
- Ordering or referring physician’s name and/or NPI are not specified on the claim
- Lack of appropriate CPT modifier
o The most commonly omitted modifier is 79, “Unrelated procedure or service by the same physician or other qualified health care professional during the postoperative period.”
- CPT modifier used incorrectly
o Specifically with regard to modifier 59, “Distinct procedural service,” the modifier should be appended to CPT codes that are secondary to the primary billed procedural code. See the National Correct Coding Initiative for code placement guidance. This topic is also covered in the November 2013 Cracking the Code column.
o For Medicare and virtually all other insurers, modifier 51, “Multiple procedures,” should not be used.
Bills submitted to insurers for non-covered services will not be paid. Consequently, one should be aware of what may not be covered, and should discuss such circumstances with a patient prior to the provision of the service. Medicare Administrative Contractor (MAC) Local Coverage Determinations (LCDs) specify select coverage provisions. These documents are readily accessible on the MAC websites. [pagebreak]
Duplicate claim denials are particularly irksome to Medicare, as they cost money to process, are common, yet represent a predictable second denial of payment. If a claim or a line item of a claim was denied once, it will be denied upon resubmission unless the reason for the denial has been corrected or appealed. Simple clerical errors, such as incorrect ICD or procedural CPT code entry, or a missing or incorrect modifier, may be corrected via a telephone “reopening” of a Medicare claim or by simply resubmitting the corrected line item of a claim electronically. Each MAC lists telephone numbers for reopening of claims calls. Frequent duplicate claim denials should be avoided, as that can mark one as an abusive biller subject to audit scrutiny. More advice on appealing denied claims will appear in next month’s column.
Example 1: Your biller submits a Medicare-covered patient’s perfectly legitimate claim to your MAC. The claim is denied. As it is a claim that should be payable, your biller resubmits the claim.
Answer: Incorrect. When a denied claim is resubmitted unmodified it will be denied as a duplicate claim. The Remittance Advice Remark (or Reason) Code provided with the claim denial will specify the reason for a denial. The denied lines of the claim should be corrected and only that portion of a claim that was denied should be resubmitted in corrected form.
Example 2: A Medicare patient’s latest claim is rejected with the following Remark Codes: OA-109 and/or CO-19 Claim not covered by this payer/contractor. The patient is adamant that they have Medicare coverage, and that nothing has changed since their prior visit. Your biller accesses the MAC Interactive Voice Response System (IVR) to confirm coverage details.
Answer: Correct. If the claim is denied with Remark Code: OA-109 and/or CO-19, Claim not covered by this payer/contractor, then most likely the patient is covered by a Medicare Advantage plan. Patients are not always aware of the differences between traditional fee-for-service Medicare and Advantage plans and may not alert staff to their change in coverage.
Example 3: You freeze a large, unsightly, asymptomatic wart on the dorsal hand and submit the claim to Medicare with CPT 17110, destruction of benign lesion, as such lesions are covered services.
Answer: Incorrect. This claim will typically be denied by the MAC, as LCDs characteristically state that destruction of warts is a non-covered service unless specified coverage criteria are met. Non-covered services are never payable. In instances of statutory non-coverage one is not obligated to bill the insurer. [pagebreak]
Example 4: You see a Medicare-covered hospice patient for initial diagnosis and treatment of a pruritic dermatitis unrelated to the hospice diagnosis. You bill CPT 99202 for the evaluation and management visit.
Answer: Incorrect. The claim will be denied on the grounds that the services are integral to the hospice care. To specify that the services were provided for a condition unrelated to the terminal illness one must append modifier GW to the CPT code.
Example 5: A patient comes in on June 23 for a destruction of a basal cell carcinoma located on her back. CPT 17262 is submitted for the 1.5 cm wide destruction. This follows the freezing of 17 actinic keratoses on June 13.
Answer: Incorrect. The charge should be submitted as 17262-79, as the basal cell carcinoma destruction was done on day 10 following the CPT 17004 actinic keratosis freezing, which has a 10-day global follow-up period. Counting of follow-up period days starts with the day after the day of a procedure.
Example 6: A Medicare claim is rejected with Reason Code CO 31 (Contractual Obligation 31), Claim denied as patient cannot be identified as our insured. Your biller identifies a discrepancy between the submitted patient name and the name as printed in the Medicare ID card, corrects it, and immediately resubmits the claim.
Answer: Incorrect. One should wait a minimum of 10 days prior to resubmitting a patient identifier-corrected claim to a MAC, or it will very likely be denied again.