Pathology/Lab Coding Alert

The Health Care Financing Administration (HCFA) has instructed local carriers that it discontinued the use of its unpublished commercial edits, often referred to as black box edits, effective Oct. 1, 2000. This decision may impact pathologists and laboratories as unsupported claim denials for their work diminish.

For the past two years, HCFA had used both published and unpublished edits computer instructions developed to help Medicare payers identify improper claims. The published edits are listed in the Correct Coding Initiative (CCI), which is updated and printed quarterly.

CCI Edits Still In Effect

The CCI Edits contains a list of procedures that Medicare considers to be components of a more comprehensive procedure. The codes for these component procedures are bundled by the CCI into the codes for the comprehensive procedures. These bundled coding combinations are not separately reimbursable unless the component procedure represents a distinct procedure or service from others billed on the same date of service, according to the Medicare Carriers Manual (MCM). The manual also states that this distinct procedure or service may represent a different session, different surgery, different anatomical site or organ system, separate incision/excision, different agent, different lesion, or different injury or area of injury.

Commercial Edits Expire on Oct. 1

To realize what HCFA Administrator Nancy-Ann Min DeParle estimated to be $205 million in savings, HCFA put into effect in October 1998 an additional 500 procedure-to-procedure edits to further ensure that Medicare did not pay separately for services that should be billed together. According to DeParle's testimony before a committee of the U.S. House of Representatives in May 1998, these edits were developed with commercially available off-the-shelf software and are often referred to as commercial edits.

HCFA declined to publish this list of commercial edits because of what DeParle referred to in her testimony as ownership issues and the need to stay ahead of unscrupulous providers. In the MCM, local payers were instructed that commercial edits are not part of the CCI. The commercial edits are proprietary and may not be made available to the public in a mass publication like the CCI.

HCFA chose not to renew its contract with HBOC (which merged with McKesson Corp. in 1999), the software vendor that supplied the edits, according to Susan Callaway-Stradley, CPC, CCS-P, an independent coding consultant and educator in North Augusta, S.C. HCFA's contract with HBOC expired Oct. 1.

Impact for Pathology Coding

This is good news for pathologists, who have been plagued by claim denials based on what appears to be one of these black box edits. Evidently, the HBOC software uses an edit that denies claims reporting code 88300 (surgical pathology, gross examination only) with any of the other surgical pathology codes for gross and microscopic examination (88302-88309), states Ron L. Nelson, PA-C, president of Health Services Associates, a practice management and compliance firm in Fremont, Mich.

Because these codes are not subject to a published edit from HCFA's CCI, it is assumed that the HBOC software is the source of the denials. Apparently, the edit presumes that the two codes refer to the same specimen, says Nelson. This is a problem for pathologists, who often conduct a gross examination of one specimen and a gross and microscopic examination of another specimen from the same patient on the same day. These do not always get reimbursed as separate procedures, claims Nelson.

Removal Not Retroactive

Pathology coders should monitor claims that were filed before the Oct. 1 effective date, says Callaway-Stradley. The removal of the black box edits is not retroactive and only affects claims filed after the effective date, she cautions.

Callaway-Stradley also warns that because a coder feels that a particular coding combination was a black box edit does not mean that it will be reimbursed in the future. Many of the so-called black box edits are really standard edits, she explains. Even if they are not listed in the CCI, there are procedures that are considered standard components of other procedures by the CPT, and these still will not be separately reimbursable. Some of the black box edits could also be added to the CCI edits in the future.

Coders confused about which codes this decision affects should verify any doubt they have for billing component codes with their local Medicare carrier before submitting claims.