Otolaryngology Coding Alert

Otolaryngology practices often report denials for claims arising from office procedures performed the same day as an evaluation and management (E/M) visit. For example, David Hendrick, MD, an otolaryngologist with Colorado Mountain Medical P.C., in Vail, CO, says he receives frequent denials for claims involving nasal endoscopy (31231, nasal endoscopy, diagnostic, unilateral or bilateral) and fiberoptic laryngoscopy (31575, laryngoscopy, flexible fiberoptic; diagnostic) performed in his office.

The denials may be for the procedure itself, as in the case of Dr. Hendrick, or for the E/M that accompanied it, depending on the carrier, the geographic location of the practice, and the complexity of the procedure and/or E/M.

Generally, denials for office procedures performed on the same day as an E/M service occur for one of three reasons, says Edward Babb, MD, CPC, an otolaryngologist in private practice in Lafayette, NJ, who also is a member of Physician Advocate Consultants and Trainers (PACT), a company which educates physicians on administrative matters.

1. Inappropriate use of modifier -25. This modifier describes a significant, separately identifiable evaluation and management service by the same physician on the same day of a procedure or other service. Properly used, modifier -25 identifies a significant E/M service that is done in addition to the procedure performed.

2. Failure to satisfy medical necessity requirements. Procedures must be appropriate treatment for the patients diagnosis. If a procedure is inappropriate, unrecognized or inconsistent with the diagnosis of the injury or illness being treated, it will not be reimbursed. In coding terms, this means ICD-9 codes must correspond with CPT codes.

3. Unbundling. The Health Care Financing Administration (HCFA) set up the global system with rules and guidelines to ensure standardized reimbursement for the same services across the country. The Medicare-approved amount for surgery covered by a global package includes payment for somebut not allservices related to the surgery when furnished by the physician who performs the surgery or by members of the same group within the same specialty. Any care or procedure listed in the package that is performed during the global period0 or 10 days for minor procedures, 90 days for major surgerycannot be claimed separately. Postoperative periods also apply to some procedures that may not be considered surgical.

The global surgical package takes into account the time, effort and services rendered for procedures that are bundled together. Payment is made for the entire package, not for each individual service provided.

Inappropriate coding combinationsbetter known as unbundlingoccur when attempts are made to bill for individual services that are covered by single comprehensive codes. Take, for example, 31231 (nasal endoscopy, diagnostic, unilateral or bilateral [separate procedure]) and 31254 (nasal/sinus endoscopy, surgical; with ethmoidectomy, partial [anterior]). According to HCFA guidelines on global procedures, physicians cannot bill for a diagnostic endoscopy performed the same day as a surgical endoscopy/ethmoidectomy because the two procedures are bundled together.

Note: An exception is the use of 31231 with 31205 (ethmoidectomy; extranasal, total), when the diagnostic endoscopy results in a decision to do an open procedure.

Diagnosis Codes Vital for Reimbursement

Correct code linkage is necessary to avoid claim denial when an E/M service and a procedure are performed the same day for an established patient. For example, an established patient with hoarseness (784.49, voice disturbance, other [including hoarseness]) has been scheduled for a fiberoptic laryngoscopy (31575, laryngoscopy, flexible fiberoptic; diagnostic). However, on the day of the procedure, the patient complains of neck pain. The otolaryngologist does an exam for the neck pain and performs the fiberoptic laryngoscopy and bills for both31575 and the appropriate E/M code with a -25 modifier attached. Diagnosis code 723.1 (cervicalgia, pain in neck) would be linked to the E/M, while 784.49 would be used with CPT code 31575.

Note: To bill the first visit by the new patient, a second diagnosis code is unnecessary. The physician, who performed an exam and a diagnostic laryngoscopy, would obtain proper reimbursement by using the hoarseness diagnosis code (784.49) both for the 31575 and the appropriate E/M code, which would also have modifier -25 attached.

Documentation Crucial for Commercial Carriers

Anne Hughes, CPC, assistant practice administrator at Mid-Vermont ENT, in Rutland, VT, agrees it is easier to get reimbursed for E/M work on new patients.

Hughes reports few problems using modifier -25 for Medicare claims; however, she says some of the local carriers initially deny E/M claims using modifier -25.

But, says Hughes, When we appeal it, on the basis of our documentation, [the carriers] will pay for it.

Ideally, if we have two separate diagnoses, well append each separately to the E/M and the procedure. If we dont have two, well just use the same one for both, she says.

Hughes stresses the providers in her practice code for higher-level E/M services only when they are indicated. Our providers attach documentation that proves a complete E/M service was performed, then they write up a separate note, almost like an operative note, for the procedure they do, such as nasal endoscopy or debridement, and keep it separate from the chart note, she says.

Still, she says, denials continue, albeit fewer of them, usually because the carrier insists the service is included in the global service or because the carrier has guidelines of its own that allow for payment for the procedure only, not for the E/M.

In fact, the fourth major reason claims are denied when E/M and procedures are performed on the same day stems from the difference between reimbursement and denial regulations followed by some commercial carriers and guidelines from HCFA, which administers Medicare. Even if the physician follows HCFA/Medicare guidelines to the letter, a third-party payer may still deny the claim because it may not follow HCFA policies on certain procedures.

To minimize reimbursement denials for this reason, Babb recommends that when the denial is appealed, refer to section 15501.1 of the Medicare manual, which defines the correct usage of modifier -25.

The denial also should be reported to the HCFA regional office, and the same quotation from the Medicare manual should be cited if a complaint to HCFA is lodged, Babb notes.

He also urges otolaryngologists to be more proactive and vocal at society and specialty meetings in support of redefining modifier -25 so that it is more applicable to all levels of E/M services.