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The Data Game: How Information Drives Insurance Changes

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  • October 1, 2007
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By Barbara Aubry, RN, CPC, CHCQM, FAIHQ 
Like most coding professionals, when I worked in a coding/auditing position I focused on three things: compliance, accuracy and timeliness. My goal was to make sure claims were accurately coded for each service that the documentation supported and the payer would reimburse. I was not particularly interested in codes that did not generate reimbursement unless they were needed for coordination of benefit (COB) issues and I certainly did not have spare time during my workday to scrutinize each Medicare Claims Processing Manual update.
As an RN and coder, I worked with clinicians to try and improve documentation skills and with the appeals team on difficult cases. Numbers were not my friend and I was not on speaking terms with data. Working with difficult appeals provided an opportunity to delve into payer regulations. I began to realize that the world of reimbursement rules was heavily data driven.
As I became more interested in the power of data, I made a career change. I am a regulatory analyst for 3M Health Information Systems’ Medical Necessity and Compliance division. My goal is to accurately analyze CMS policies and translate rules to actions required of our customers to fully comply with regulations while maximizing reimbursement.
CMS Says…
For years, CMS has been asking health care practitioners to voluntarily report more and varied information on claims. New codes and modifiers are constantly appearing and disappearing. Often, issues that are “voluntary reporting” in one month become required reporting the next. We have been asked to report codes on claims that are not reimbursed but are used by CMS for information gathering purposes. Why are they doing this? What is the point? What does the data represent and why should we include codes on claims that have no reimbursement value?

Data Mining

What does CMS do with the codes we are supposed to report that are not ‘reimbursable?’ CMS’ Transmittal 573, Change Request 3848, dated June 3, 2005, states, “hospitals are instructed to report all codes that appropriately describe the services provided and the corresponding charges so that CMS may capture specific historical hospital cost data for future payment rate setting activities.” Similar requests are made of physicians in the Chemo Demonstration Project and the Physician Quality Reporting Initiative (PQRI). You may be familiar with section 230.2.4, “Administration of Non-Chemotherapy Drugs by Infusion,” which states, “The OCE will pay one APC for each encounter reported by CPT® code 90780, and will only pay one APC for 90780 per day (unless Modifier 59 is used). Payment for additional hours of infusion reported by CPT® code 90781 is packaged into the payment for the initial infusion. While no separate payment will be made for units of CPT® code 90781, hospitals are instructed to report all codes that appropriately describe the services provided and the corresponding charges so that CMS may capture specific historical hospital cost data for future payment rate setting activities.”  [Note – the infusion codes have not been updated in the CMS manual].
In both instances, the key words are “historical data” and “rate setting” for future payment. Apparently it’s important, but what is “rate setting?” CMS collects claims data to determine the cost of services provided. This historical data is used by CMS to set future reimbursement rates. And since CMS expects us to code all services provided, even if they are not separately reimbursable, Medicare believes that our claims data is an accurate representation of both hospital and physician services and costs. This concept is important to both hospital and physician practice coders. CMS is actively mining physician claims and is moving toward tying reimbursement to performance and documentation of clinical measures. If CMS is successful in moving toward pay for performance and acuity-based reimbursement, accurate claims data will be more important than ever because both programs are heavily data driven.

By The Numbers

Each year, CMS releases its National Claims Data report, containing the results of its data mining efforts. The report includes data on many different procedures. As a coder, I found the following example from the 2004 report especially sobering: Providers lost approximately $327 million in reimbursement due to claim errors. The data reports drill down further; for example there were 2.7 million claims submitted with pathology CPT® codes 88300-88309.* Of the claims submitted, 377,041 claims were missing biopsy or specimen removal codes. This translates to an error rate of 14 percent.

Impact on Coders

A $327 million loss in reimbursement in 2004 due to claim errors demonstrates the value of accurate coding and supports the need to hire, train, certify and provide continuing education opportunities for skilled professional coders. What CMS cannot measure and report in the National Claims Data is the number and dollar value of missing charges — the reason they repeatedly request that all charges accompany the claim. How many packaged items were not reported? How many services that required an ABN were not reported with or without the appropriate modifier? How much did the lack of measurable charges reduce your current reimbursement? And even more importantly, what will lost charges cost in next year’s reimbursement dollars?
Coders can take action: learn the difference between packaged and bundled items and appropriately report the charges. Share your knowledge and learn from your colleagues. Ask to be included on the chargemaster team. Request the CFO to invite a coder to billing team meetings. Impress on management the importance of creating a process whereby coders are allowed time to review and discuss CMS mandates. Attend calls and conferences and debrief colleagues on information gathered. Talk with your software vendors to determine which products your facility uses and how they can help capture lost charges. Become an active, dedicated participant in the reimbursement improvement process.

Data Driven

At a CMS conference I recently attended in Washington, DC, the audience was warned collectively that CMS intends to increase the frequency of quality initiatives for hospitals and demonstration projects such as PQRI for physicians. I left the conference convinced yet again that the one constant we can expect from CMS is change – and data is the driver.
*Source: Handlon & Cleverley, “Is Your Claim Editor Really Working?” Sept. 2006, Healthcare Financial Management.

Don’t miss these revenue opportunities!

CMS will pay separately when the following is the only service reported on the claim:
36540 Collection of blood specimen from a completely implantable venous access device (APC 0624, $32.96)
36600 Arterial puncture, withdrawal of blood for diagnosis (APC 0035, $12.45)
38792 Injection procedure; for identification of sentinel node (APC 0389, $86.92)
75893 Venous sampling through catheter, with or without angiography (eg, for parathyroid hormone, renin), radiological supervision and interpretation (APC 0668, $393.35)
94762 Noninvasive ear or pulse oximetry for oxygen saturation; by continuous overnight monitoring (separate procedure) (APC 0443, $61.39)
96523 Irrigation of implanted venous access device for drug delivery systems (APC 0624, $32.96)
Barbara Aubry, RN, CPC, CHCQM, FAIHQ, is a regulatory analyst at 3M Health Information Systems, Inc., in Rockleigh, NJ.

Certified Professional Medical Auditor

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