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EDITOR’S NOTE: The following news story came about when a Monitor Mondays listener reported a new type of audit from their MAC (Noridian).

Those of you who have been loyal listeners to Monitor Mondays and readers of RACmonitor may recall the great transmittal surge of 2014, as outlined by Steven Greenspan in his article here. First was Transmittal 505, which allowed contractors to deny all “related” claims when issuing a denial. This was quickly rescinded and then followed by Transmittal 534, 540, and finally 541. Transmittal 541 allows denial of a surgeon’s claim if an inpatient surgery claim is denied for lack of medical necessity.

But except in a few locations, such as Florida with total joint replacements, no auditor has denied a surgeon claim when the hospital was denied. While many in the case management and revenue cycle world secretly hoped that more auditors would start denying related claims so that physicians would have some skin in the game, it has not yet happened.

That may start changing, as Noridian announced on July 12 that it would start performing “cross recovery” for related claims. In a statement the contractor indicated that “when medical review results in longstanding high error rates, the MAC (Medicare Administrative Contractor) may request CMS (Centers for Medicare & Medicaid Services) approval to deny ‘related’ claims submitted before or after the claim in question.”

Noridian cited the Medicare Program Integrity Manual, Chapter 3, Section 3.2.3, which references the conditions set out in Transmittal 541 but then has a bullet point reading that such provisions are specifically “reserved for future approved ‘related’ claim review situations.” It goes on to specify that the MAC or ZPIC (Zone Program Integrity Contractor) must seek CMS approval for related claim denials and post notice one month prior to initiating audits and denials. This allows the MACs to go outside the limitations set by Transmittal 541 and start denials of outpatient procedures billed by the hospital to Part B.

The first issue approved by CMS for Noridian cross recovery is facet injection services, or CPT codes 64493 – 64495; 64635 – 64636. Determining medical necessity for these injections among providers in the Noridian jurisdiction should be relatively easy, as they have an active local coverage determination, L34995, which lists indications, procedure requirements, and provider qualifications, along with appropriate CPT and ICD-10 codes.

Time will tell whether Noridian will seek CMS approval to expand the number of approved issues, whether other MACs start seeking related claim approvals on Part B services, and whether “cross recovery,” a term that Noridian invented (as Palmetto invented the “health information supply chain” terminology), will catch on with the other MACs – or whether each will invent its own term and make it even more frustrating for all of us.

Be sure to keep reading RACmonitor for updates.

About the Author:

Ronald Hirsch, MD, FACP, CHCQM is vice president of the Regulations and Education Group at Accretive Physician Advisory Services at Accretive Health. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute-care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the Advisory Board of the American College of Physician Advisors, a member of the American Case Management Association, and a Fellow of the American College of Physicians.

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