Knowledge Base Article

At this time of year, do you try to get your children or grandchildren to behave better by telling them “Santa Claus is watching?” Santa is watching the kids, but for medical coders, Medicare is watching and not just at Christmas time.

Medicare medical review activity is often the subject of the articles in this newsletter. A lot of the audits and their associated denials focus on the medical necessity of services and documentation to support that. But coders and Medicare reviewers also know that inaccurate coding can often result in improper payments for Medicare services. In November, the Office of Inspector General (OIG) added a new topic to their Work Plan that will examine hospital inpatient coding - Assessing Inpatient Hospital Billing for Medicare Beneficiaries.  Here is the OIG’s description of the new Work Plan item:

“In 2016, hospitals billed Medicare $114 billion for inpatient hospital stays, accounting for 17 percent of all Medicare payments. The Centers for Medicare & Medicaid Services and the Office of Inspector General have identified problems with upcoding in hospital billing: the practice of mis- or over-coding to increase payment. We will conduct a two-part study to assess inpatient hospital billing. The first part will analyze Medicare claims data to provide landscape information about hospital billing. We will determine how inpatient hospital billing has changed over time and describe how inpatient billing varied among hospitals. We will then use the results of this analysis to target certain hospitals or codes for a medical review to determine the extent to which the hospitals billed incorrect codes.”

Although this description uses the phrase “the practice of mis- or over-coding to increase payment,” healthcare providers and coders know that usually increased payment from coding errors is just that – an error, without intent to defraud anyone. That is why hospitals need to make sure their coders are knowledgeable, well-trained, and receive appropriate on-going education. They also need to have processes in place for over-sight such as routine internal and/or external audits of coding.

The OIG is not the only Medicare reviewer currently looking at hospital inpatient coding accuracy. All four of the Recovery Auditors (RACs) have an approved issue for MS-DRG Validation audits:

“MS-DRG Coding requires that diagnostic and procedural information and the discharge status of the beneficiary, as coded and reported by the hospital on its claim, matches both the attending physician description and the information contained in the beneficiary's medical record. Reviewers will validate MS-DRGs for principal and secondary diagnosis and procedures affecting or potentially affecting the MS-DRG assignment.”

Medicare Administrative Contractors (MACs) Novitas (Jurisdictions H and L) and WPS (J5 and J8) also have DRG Validation listed as one of their Targeted Probe and Educate (TPE) medical review topics. Palmetto JJ and JM have TPE DRG Validation (coding) reviews for Heart Failure and Shock with MCC or CC (MS-DRGs 291 and 292). The guidelines for inpatient diagnosis coding are found in the ICD-10-CM Official Guidelines for Coding and Reporting and for procedure coding in the ICD-10-PCS Official Guidelines for Coding and Reporting. On-going guidance is provided through updates in the American Hospital Association (AHA)’s Coding Clinic.

Medicare reviewers also examine coding accuracy for outpatient claims. For outpatient diagnosis coding, coders follow the guidance of Diagnostic Coding and Reporting Guidelines for Outpatient Services. Since outpatient claims are paid based on procedure codes, this area is also ripe for audit. Specifically, all four RACs have APC Validation approved audits – “APC coding requires that procedural information, as coded and reported by the hospital on its claim, match both the attending physician description and the information contained in the beneficiary's medical record. Reviewers will validate the APC by reviewing the procedures affecting or potentially affecting the APC assignment.”

Outpatient procedures are reported with CPT and HCPCS codes. The American Medical Association (AMA) CPT Manual, CPT Assistant and the AHA’s Coding Clinic for HCPCS provide guidance on appropriate CPT coding. CMS creates and maintains alpha-numeric HCPCS codes and often provides guidance on their usage through transmittals and manual instructions. In addition, CMS follows the guidance of the National Correct Coding Initiative (NCCI) so coders also have to be aware of these instructions. NCCI instructions may or may not be consistent with CPT instructions making the coder’s job even harder. There are numerous audit issues that look at individual coding requirements from CPT and/or NCCI as evidenced by these RAC issues:

• Shoulder arthroscopy procedures include a limited debridement (e.g., CPT code 29822).
• Reporting multiple cataract removal codes for the same eye.
• Coding right heart catheterization with an endomyocardial biopsy.
• Add-on codes reported without primary code.
• A diagnostic endoscopy HCPCS/CPT code shall not be reported with a surgical endoscopy code. (recently added RAC issue)

As you can see, coders have a lot to keep up with to ensure accurate coding. Santa may be watching all the children to see if they are naughty or nice, but Medicare is watching coders to see if they are coding correctly.