Why Were My HOPD Claims Denied?

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  As 2014 passes its midway point, the most frequently asked question this author has heard continues to be “Why were my hospital-based outpatient wound care department (HOPD) claims denied?” This article will offer readers some of the many answers regarding these denied claims.   However, it’s worthwhile to note that ongoing Wound Clinic Business (WCB) seminars also offer the opportunity to ask and receive answers to such “burning questions.” For a full schedule and agenda, visit www.woundclinicbusiness.com.

Denied Debridement Codes

  What follows is an example of an HOPD program director’s de-identified claims (and matching de-identified remittance advice) that were denied by the Medicare Administrative Contractor (MAC) that processes her facility’s claims. All of the claims were for debridements on large wounds.

  One February 2014 claim was for debridement of subcutaneous tissue of a 40 sq cm venous stasis ulcer on the leg. The remittance advice showed that Medicare paid for 11042, but did not pay for 11045. The program director was upset that her MAC denied payment for the additional 15 sq cm. She’s curious as to how to prevent future denials. In fact, she thought she should add a modifier to 11045 to receive Medicare payment.

  After reviewing that claim, I verified that the appropriate codes and units appeared on the claim.
    • 11042 - 1 unit
    • 11045 - 1 unit

  A modifier was not necessary because 11045 is an add-on code. After reviewing the matching remittance advice, I verified that the MAC paid the claim correctly. I reminded the program director that effective Jan. 1, 2014, Medicare packaged all add-on codes into the payment for the base procedure code. Because this work was performed after Jan. 1, 2014, the program director should not expect to see separate Medicare payment for add-on codes.

  Another example of a denied Medicare claim comes from a March 2014 order for selective debridement of fibrin and slough from a 120 sq cm venous stasis ulcer on the leg. The remittance advice showed that Medicare paid for 97597, but did not pay for 97598. Once again, the program director involved was upset that her MAC denied payment for the additional 100 sq cm. The program director thought the claim was denied because of medically unlikely edits (MUEs) and wanted to understand how to code the claim so that the MUEs would not deny the claim. After reviewing that claim, I verified that the appropriate codes and units appeared on the claim:
    • 97597 - 1 unit
    • 97598 - 5 units

  When I reviewed the remittance advice, I verified that the HOPD received the correct Medicare allowable payment. I informed the program director that the MUEs were not the reason for the denial. Like the first claim, the Medicare payment for the add-on code 97598 was packaged into the payment for the base code 97597. At that point, the program director became annoyed and said, “Then I am not going to take my time and the time of my staff to report the add-on codes.” I took that opportunity to explain that the charges on HOPDs’ 2014 claims for the add-on codes will greatly influence the Medicare packaged-payment rate for base codes in 2016. I explained that the 2016 packaged-payment rates for base codes such as 97597 would surely decrease if the HOPDs’ 2014 claims did not show any charges for add-on codes.

  I also reminded her that this also applied to the surgical debridement add-on codes (11045, 11046, 11047), application of “high-cost” skin substitute add-on codes (15272, 15274, 15276, 15278), and application of “low-cost” skin substitute add-on codes (C5272, C5274, C5276, C5278). Therefore, it is imperative that HOPDs continue coding and charging for add-on codes even though the Medicare payment for these codes is packaged into the base codes. The program director was appreciative and said she would remind her team to continue coding and correctly charging for the add-on codes now that she understood that her 2014 submitted claims would influence the 2016 Medicare payment rates for the base codes.

Denied Compression Claims

  In the following example, several physicians who worked together in an HOPD wanted to know why the HOPD did not always get paid for the application of total contact casts (29445), Unna’s boots (29580), and multilayer compression bandage systems (29581). The physicians said they personally did not bill for the work because they did not apply the compression products: They just wrote the orders for the products to be applied by the HOPD staff. Upon congratulating them for not billing for work they did not perform, I also inquired about the work they did perform. In some instances the physicians surgically debrided the wounds, in other instances they performed selective debridement, and for chronic venous ulcers they applied cellular and/or tissue-based products for wounds (CTPs) [old term “skin substitute”].

  At that point, the reason for the HOPD claim denials became clear. I explained to the physicians that the National Correct Coding Initiative (NCCI) edits do not allow Medicare payment for the application of compression to the same anatomic location on the same visit that debridement or application of CTPs is performed. The physicians challenged that by claiming both procedures were “medically necessary,” but in reality Medicare considers compression as “dressings” when performed on the same limb in which the procedure was performed. I also explained that Medicare does pay the HOPD for “medically necessary application of compression when no other procedure is performed.” This link gives the NCCI edits:

Denied CTP Claims for Wounds

  Recently, a compliance officer admitted that she stopped an HOPD from using all CTPs because all of the Medicare claims for the application of CTPs have been denied since Jan. 1, 2014. I asked her exactly what was submitted on each claim, and she explained that each claim correctly reported the application code for either the high- or low-cost CTPs based on Medicare’s assignment of the brands to those packages. I then asked if the claims included the appropriate Healthcare Common Procedure Coding System (HCPCS) “Q” codes for the respective CTPs that were applied, to which she said, “No, because the CTPs are now packaged into the procedure code.” I explained that the Centers for Medicare & Medicaid Services (CMS) gave explicit instructions that HOPDs are supposed to continue coding and appropriately charging for CTPs on their claim forms. In fact, CMS has stated that claims submitted without the packaged product HCPCS code will not be paid. The compliance officer said that somehow she missed that directive and was glad to know that she could resubmit the claims with both the application code and the CTP code/charge. She also felt very bad that she had denied the Medicare beneficiaries access to advanced technology and immediately picked up her phone to inform the HOPD to resume using CTPs.

  In another situation involving the use of CTPs, an HOPD medical director told me about many denied Medicare claims for the application of one CTP brand. I asked the brand name of the product and the name of the MAC that processes the HOPD’s claims. I then searched the Medicare coverage database (www.cms.gov/mcd) for that MAC’s local coverage determination (LCD) pertaining to the application of CTPs. The LCD clearly listed that brand as “non-covered.” The medical director was very surprised to learn this and explained that a sales representative told him the product had an HCPCS code. I explained that the rep was correct about the HCPCS code, but failed to tell the medical director that the product was not covered by the MAC that processes the HOPD’s claims. I also took the opportunity to remind the medical director about the importance of reviewing LCDs that pertain to the work performed in the HOPD. The medical director admitted that he “never reads the LCDs because that is the coder’s responsibility.” I took that one more opportunity to show the medical director that most of the information in the LCDs is invaluable for physicians to understand their MAC’s guidelines for determining medical necessity, for utilization, for documentation, etc.

  Another physician experienced a situation in which the HOPD stopped him from applying all CTPs because every Medicare claim for his patients was denied. I asked him if he knew why the claims were denied, his response being that “the coder reported that the remittance advice stated the procedure was not medically necessary.” That was my clue that the denial was most likely due to the diagnosis code(s) on the claim. I asked the physician if he knew which diagnosis code(s) were typically on the denied claims. To my surprise, he did, claiming that he uses the unlisted ulcer code for all patients. I then took the time to educate him about the need to be as specific as possible when diagnosing his patients and when selecting the ICD-9-CM codes. I also explained that most LCDs pertaining to the application of CTPs provide specific guidelines for covered diagnosis codes. In fact, most LCDs specify both covered primary and covered secondary diagnosis codes.

  If both codes do not appear on the claims for the application of the CTPs, the MACs will deny the claims. Once again, I went to the Medicare coverage database and located his MAC’s LCD. The unlisted ICD-9 code that the physician was using was not a covered diagnosis code. However, the LCD clearly listed the covered primary and secondary diagnosis codes for the CTPs that the physician had applied. The physician was surprised to see the specificity of the ICD-9 codes and the extensive coverage guidelines in the LCD. I reminded him that he should research all of his MAC’s available LCDs that pertain to the work that he performs. In fact, I provided him with one of my famous sayings about LCDs: “You cannot play the game without a playbook.”

Summary

  If any of these denied claims issues sound familiar, get together with your clinical team and your revenue cycle team as soon as possible. Make sure you are:
    • Including all add-on codes with correct hospital charges on your claims.
    • Including the HCPCS code and the correct number of CTP units purchased on the same claim as the code(s) for the application of the CTPs.
    • Verifying which CTPs are covered by your MAC.
    • Justifying medical necessity for the application of CTPs and any other work performed, with the most specific ICD-9 codes that describe the patient’s diagnosis.
    • Reviewing pertinent LCDs with all members of the medical, clinical, and revenue cycle teams.

  Kathleen D. Schaum is president and founder of Kathleen D. Schaum & Associates Inc., Lake Worth, FL. She may be reached for questions and consultations at 561-964-2470 or kathleendschaum@bellsouth.net.