TrailBlazer Identifies Improper Use of Initial Hospital Care Codes

A widespread probe review recently conducted by TrailBlazer Health Enterprises, LLC for initial hospital care codes reported to Medicare resulted in an overall error rate of 58.31 percent, confirming the jurisdiction 4 Medicare administrative contractor’s (J4-MAC’s) suspicions of potential improper use.

Using the Progressive Corrective Action (PCA) process, TrailBlazer identified a random sample of 100 claims containing initial hospital care codes reported by 10 New Mexico and Texas providers with dates of service between Aug. 1, 2010 and Jan. 31, 2011. The selection of providers for this review was based on a scoring methodology that considered the following variables:

  • Distribution of claims volume for CPT® codes 99221–99223
  • Distribution of paid dollars for CPT® codes 99221–99223
  • Percent of claims billed with modifier 25 Significant, separately identifiable evaluation and management services by the same physician on the same day of the procedure or other service
  • Percent of claims billed with modifier AI Principal physician of record
  • Percent of claims billed with 99223 A comprehensive examination; and Medical decision making of high complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs. Usually, the problem(s) requiring admission are of high severity. Physicians typically spend 70 minutes at the bedside and on the patient’s hospital floor or unit. compared to the number of claims billed with 99221–99223
  • Frequency of services per beneficiary for 99221–99223 compared to the peer average

Let This Be a Lesson

Understanding and adhering to Medicare guidelines regarding coverage and documentation requirements associated with initial hospital care services will ensure accurate payment.

In this particular probe review, TrailBlazer found a plethora of issues leading to improper reporting of the initial hospital care codes.

Issues that resulted in denial or partial denial of payment for services were generally related to various forms of improper documentation.

To meet the highest level of initial hospital care, documentation must include all three of the following key components: 1) a comprehensive history; 2) a comprehensive exam; and 3) medical decision-making of high complexity.

Read Notice ID 14580 for complete medical review findings, a documentation example and suggestions for proper reporting of these codes, and guideline references.

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