Pathology/Lab Coding Alert

Focus on lab and pathology data.

Despite a drop in the overall improper payment rate for Medicare fee-for-service in 2020, Part B claims error rate increased by nearly 3 percent — including many clinical lab and pathology claims.

Basis: Centers for Medicare & Medicaid Services (CMS) recently released the 2020 Medicare FFS Supplemental Improper Payment Data as part of its Comprehensive Error Rate Testing (CERT) program. The CERT data showed Medicare Part B’s portion of the improper payment rate at 32.8 percent of the overall amount — a significant increase from the 2019 rate of 29.9 percent. The CERT report offers more statistics on claims errors broken down by specialty, including what caused improperly paid charges.

Look at the Overall Numbers

A myriad of corrective actions contributed to CMS’ efforts to circumvent incorrect coding and cut error rate numbers. The feds estimate improper payments at $25.74 billion for FY 2020 with a 6.3 percent improper payment rate. This is a major drop from FY 2019’s statistics, which included a 7.25 percent error rate and $28.91 billion in improper payments.

Why do these numbers matter? “The CERT program is designed to determine if Medicare contractors are processing and paying claims correctly,” notes Part B Medicare Administrative Contractor (MAC) NGS Medicare in online guidance.

Plus, the feds track errors and offer educational programming from the CERT results. “CERT is an excellent program that provides extremely helpful information for physicians,” says Christina Neighbors, MA, CPC, CCC, coding quality auditor for Conifer Health Solutions, Coding Quality & Education Department. “

See particulars: With a 7.0 percent error rate, pathology claims were slightly worse than the overall 6.3 percent figure. On the other hand, clinical laboratories demonstrated a whopping 17.0 percent improper payment rate, accounting for $676.1 million in improper payments.

Avoid These Coding Errors

In Figure 2 of the CERT report, CMS highlights the various issues that hiked up the error rate. The pie chart points to the following documentation problems .

• Insufficient documentation: The agency highlights the perennial problems that insufficient documentation creates each year. Billing snafus arise when the documentation doesn’t support a higher-level code, the medical necessity of the higher code, or even the condition for the payment of the code. The overall impact of insufficient documentation was significant at a whopping 63.1 percent.
• Medical necessity: At 16.2 percent, medical necessity ranked as the second biggest factor adding to this year’s estimated FFS improper payment rate. “These errors occur when submitted medical records contain adequate documentation to make an informed decision that services billed were not medically necessary based upon Medicare coverage and payment policies,” explains the agency.
• Incorrect coding: Annually on CMS’ naughty list, incorrect coding remains a major contributor with 10.9 percent of the FFS error rate. When claims are submitted with the wrong code or a provider listed who didn’t perform the service, this ratchets up the incorrect coding rates. In addition, unbundling services, putting the wrong site for a code, downcoding to a lower-level code, and upcoding to a higher-level code also increase this category’s numbers.
• No documentation: When Medicare providers ignore medical records requests or lack the necessary documen­tation to back up claims, this rate goes up. Figure 2 shows that 4.4 percent of the estimated FFS improper payment rate was impacted by this issue.

Remembering that the physician’s documentation is key to supporting every code level is essential, says Terri Tamez, CPC, CEO of Phoenix Coding and Consulting Service. “Remember, the chart reviewer cannot assume why [the provider] ordered certain tests. Coders cannot interpret, infer, or imply why any treatment or tests are ordered.”