Medicare Compliance & Reimbursement

Hint: Precise documentation leads to fewer claims issues.

If your practice is spending precious time and money on processing appeals for too many denied claims, it’s time to fix your claims issues upfront. Now is the time to revisit your denial trends and get the Medicare pay you deserve.

To prevent denials in the first place, you’ve got to sift through all of your claims data and analyze the information and your remittance advice (RA), looking for inconsistencies. “It’s not one claim denial you’re looking at,” advised Maggie Fortin, senior manager at Baker Newman Noyes, at an American Academy of Professional Coders’ Healthcon meeting last year. “It’s many claims denials for a common reason.”

Large-scale organizations may have revenue cycle management (RCM) teams to scrutinize denial data, but even small practices can develop systems and processes that pinpoint problem areas and come up with solutions to cut down on claims issues.

To uncover the common reasons for your denial troubles, you’ve got to be part Nancy Drew, part number cruncher, and part spreadsheet jockey.

Spot Denial Issues with These 6 Steps

Here’s the step-by-step process Fortin recommends.

Step 1: Start by downloading Electronic Remittance Advice (ERA) files — your “835s” — from your payers. You can translate electronic remittance advice files “into readable formats using software such as Easy Print, PC Print, vendor applications, or home-grown processes,” explained Fortin.

Resources: Download Medicare Remit Easy Print (MREP) software for free from CMS at www.cms.gov/Research-Statistics-Data-and-Systems/CMS-Information-Technology/AccesstoDataApplication/MedicareRemitEasyPrint.html or download free PC Print software from CMS at www.edissweb.com/cgp/software/pcprint.html.

Step 2: Review claim adjustment reason codes (CARCs) to fully understand why the Medicare Administrative Contractor (MAC) or private payer didn’t pay your claim.

Resource: For a key to CARCs, go to: www.x12.org/codes/claim-adjustment-reason-codes.

Step 3: Track down the remittance advice remark codes (RARCs) associated with the CARCs. Remember, not all CARCs will have them, but sometimes you’ll see them along with CARCs providing additional information about why the claim was denied.

Important: The alpha-numeric CARC and RARC themselves won’t tell you much. To get full definitions, you can go to the website of the Washington Publishing Company (WPC), which manages the codes at http://wpc-edi.com/Reference/.

Once at the website, you can click on the link for “Claim Adjustment Reason Codes (CARC)” to see complete list of current codes with their definitions, such as, “6 - The procedure/revenue code is inconsistent with the patient’s age.” You’ll also find a link for “Remittance Advice Remark Codes (RARC),” which provides a complete list of current codes with definitions, such as “M43 - Payment for this service previously issued to you or another provider by another carrier/intermediary.”

Stay up to date: MACS update CARC and RARC three times annually based on WPC’s schedule, typically March 1, July 1, and November 1. That means your practice needs to keep current with the updates if you want to be able to translate your RAs. In addition to the updated list of codes, the website also contains links to deactivated codes, and codes scheduled for deactivation at the next update. To read more about updating these codes, check out the July 1, 2018 MLN Matters article MM10489 at www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM10489.pdf.

Step 4: Look for the group code, which describes who has financial responsibility for the charge that’s been denied.

“CO (Contractual Obligation) assigns responsibility to the provider” while “PR (Patient Responsibility) assigns responsibility to the patient,” according to two examples of financial responsibility outlined by CMS guidance.

Step 5: Compile your data into a denial trend report that lists reason codes, remark codes, and group codes. Sort your report by reason code so that you can quickly spot denial trends at your organization, Fortin suggested.

Step 6: Once you spot denial patterns, you can find the root cause for why they are happening so that you can educate staff or tweak systems. You’ll find your root causes in one or more of the following areas, indicated Fortin.

• Patient Access and Registration, including Pre-Authorizations
• Clinical Encounter and Documentation
• Charge Capture/Entry
• HIM: CPT^® and ICD-10 Coding
• Claims Preparation and Submission
• Account Reconciliation and Posting

A thorough review of your denial trends will make it easier to root out your claims errors, so that you can take the necessary steps to eradicate them. This may involve staff training, educating clinicians, beefing up your advance beneficiary notice (ABN) procedures, redesigning workflows, reviewing national coverage determinations (NCDs) and local coverage determinations (LCDs), or refining your ICD-10 coding to better express medical necessity, according to Fortin.

Expert input: “All billing staff should spend time studying the reasons cited for adjustments or denials from the RA they received,” stresses Melanie Witt, RN, MA, an independent coding expert based in Guadalupita, New Mexico. “Each RA message should be tracked to ensure that any patterns of inappropriate adjustments (incorrect use of a modifier, bundling issue, reduction for secondary procedure, etc.) or denials (code not covered, code bundled, demographics incorrect, not medically necessary, etc.) are addressed to ensure maximum reimbursement.”