Identify Binding Rules for Defensible Coding
Medicare’s way isn’t always the right way.
By Michael D. Miscoe, JD, CPC, CASCC, CUC, CHCC
There is an old adage that if you are right with Medicare, you are right with the rest of the (payer) world. Although such a universal truth would make both coders’ and auditors’ jobs much easier, it simply isn’t true.
In 1996, the federal government established the Administrative Simplification Act (the Act), which required the Department of Health and Human Services (HHS) to develop regulations standardizing the codes used by all entities covered by the Act. Covered entities included all insurance carriers and nearly all health care providers reporting services to third-party payers and/or federal government benefit programs. Regulations implementing this statutory mandate are commonly known as the Health Insurance Portability and Accountability Act (HIPAA) Transaction and Code set standards (the formal title is 45 CFR Parts 160 and 162, Health Insurance Reform: Standards for Electronic Transactions, 65 FR 50312-01, 2000 WL 1157638).
A Matter of Interpretation
The key to understanding the mandated rules’ significance is that only the codes and descriptions, including modifiers and their descriptions, are incorporated in the mandated code set. Although these rules eliminated local codes, the code set rules purposely did not eliminate local rules pertaining to standard codes usage—or even what they mean beyond the description. The rules for how codes are used are reserved to the payer. Because payers determine code utilization rules, there is no single answer to any coding question. When the payer is someone other than the local Medicare contractor, using Centers for Medicare & Medicaid Services (CMS) guidance to report a service may lead to an inaccurate result.
There are examples where a controlling standard has you report services in a grossly different way than you might when following guidance published by CMS. Following the CMS guidance, particularly use of National Correct Coding Initiative (CCI) bundling rules, may result in less reimbursement than you are entitled to.
Why bundle according to CCI if you do not have to? Because coding is about correctly representing a service so the billed carrier can make the correct payment determination. Importantly, consider how a carrier will interpret the codes you report and how they want you to use the existing codes for a particular situation.
Speak their Language
If coding is a language, think of each carrier having its own dialect. While the words (codes) are the same, they potentially mean something different to each carrier. Some may not allow you to use certain codes in combination, some will. Some may recognize modifiers in certain circumstances, some may not.
The lack of standardization in what codes mean and how they should be used presents an interesting dilemma, as well as a unique challenge to coders. The better you understand individual carrier policies and rules pertaining to coding, the more valuable you are to your organization. Proving your value establishes job security and also helps you progress within your organization and the profession of coding.
Caution: Applying the appropriate rules isn’t necessarily about getting paid. Sometimes, reporting a service accurately means the carrier is not obligated to pay for the service. In such cases, the payment burden usually falls on the patient. Coding to avoid such a result is often the genesis of many False Claims Act (FCA) cases. Coders must describe procedures and services so the carrier can understand what was done and can make an appropriate payment determination. When the selected code causes the carrier to misinterpret what was done under the carrier’s coding policy, and an improper payment is made based on that misinterpretation; the provider may get paid, but will usually be forced to return the money and potentially more in the form of penalties at some point in the future. When coders report accurately as defined by the billed carrier, it is unlikely the provider will be exposed to any substantial post payment liability. With the number of post-payment audits on the rise, this should be particularly concerning to all.
Get the Right Answer
When billing carriers, there are questions that should come to mind to help you determine appropriate codes:
- Who is the carrier?
- Is there a statutory code utilization rule that applies?
- If yes, does the statute provide guidance as to what code utilization standards should be applied?
- Are you contracted with that carrier?
- If yes, does the contract provide guidance as to what code utilization standards should be applied?
- Does the contract bind the carrier’s medical policies?
- When there isn’t a contract or the policies aren’t incorporated into the contract, is there guidance available in the carrier’s medical policies to assist in correctly reporting the services at issue?
- In the absence of a specific carrier rule, what generally accepted guidance will you use persuasively to guide your coding decisions?
Obtaining an accurate (or at least defensible) answer in any situation requires sorting out controlling guidance from persuasive guidance. For example, some may think a newsletter from a national organization is considered controlling guidance. I have seen similar cases where an auditor found guidance in the CPT® Assistant and terminated the analysis. In these cases, both individuals failed to look for the authority making either reference binding with respect to payment. In reality, both were incorrect and the guidance was merely persuasive.
Controlling Guidance vs. Persuasive Guidance
Controlling guidance can arise either by statute/regulation or by contractual agreement with the carrier (most commonly the beneficiary contract and, in some cases, a provider contract). Controlling guidance establishes “must do” rules. By contrast, persuasive guidance can be anything, including CPT® Assistant, association coding advice, and articles such as this one. The value of persuasive authority pieces vary based on the source’s credibility and accuracy. Never assume that coding advice, even from a respectable source, is accurate for your particular circumstance. Failure to follow persuasive advice can never establish a payment error.
Identifying controlling guidance requires an objective analytical process. The most critical element of this process is what the HHS, Office of Inspector General (OIG), and Office of Audit Services (OAS) auditing guide calls “criteria analysis.” Criteria analysis is nothing more than identifying and understanding the binding rules that apply in your specific coding situation.
Binding Beneficiary Rules Take Legal Precedence
The OAS Audit Process Manual defines criteria as “the standards against which the audit team measures the activity or performance of the auditee … Criteria can come in many forms, including Federal laws and regulations, state plans, contract provisions and program guidelines.” (HHS, OIG, OAS, “The Audit Process,” 2nd ed., 2005)
The OAS manual provides additional guidance with respect to criteria hierarchy:
“It is important to determine a criteria hierarchy. In other words, if laws, regulations and guidelines on the same program appear to contradict each other, the audit team must decide which criterion takes precedence. In cases where the criteria are not clear, or when laws and regulations are significant to the audit objectives, the audit team should seek a legal opinion.”
The first rule in our criteria hierarchy, regardless of the case, is the HIPAA code set rule identified earlier. When applying this rule, remember that your code set is nothing more than the CPT®, HCPCS Level II, and ICD-9-CM codes with their descriptions. The instructions contained within these manuals detailing the publishers’ guidance for how to use the codes are not part of the code set. As a result, these instructions are not controlling (binding) unless the carrier formally adopts these instructions in a binding policy. After isolating your codes and descriptions, coders must identify and list all possible code choices that fairly and accurately describe the service performed. Refining this list to a single code requires more analysis.
The next level in our rule hierarchy is a statutory or regulatory rule pertaining to the case being billed. Some states, for example, have adopted the published code guidance of the CPT® Editorial Panel; otherwise known as the CPT® manual. It is probably relevant to point out that this does not include the CPT® Assistant, which is published by a separate division of the American Medical Association (AMA). Where such statutory guidance doesn’t exist, you must turn to the beneficiary contract. Because the beneficiary contract is the document that spells out the payment obligation of the carrier, it is available to the enrollee (patient) but you, as a provider, may have difficulty getting a copy of it. When beneficiary contract guidance exists, it must be applied to the possible correct code choices list you identified after description matching under the code set rules.
Beyond the beneficiary contract, you are usually entering persuasive guidance. Even when you are a participating provider, most standard provider contracts establish conditions of participation, not conditions of payment. Nonetheless, some contracts, usually in larger specialty physician groups, may establish binding coding and payment standards—so be alert!
Without Controlling Guidance, Turn to Persuasive Guidance
Where statutory/regulatory or binding contractual guidance does not exist, you are forced to resolve your coding issues with persuasive guidance, which also has a hierarchy. Start with carrier guidance before going out to other standards. When looking at any persuasive standard, evaluate the standard’s credibility by looking at the review process the guidance was subjected to prior to publication. Beyond the provider contract, you can usually find carrier guidance published in medical policies or billing guides. Lower on the carrier totem pole are carrier newsletters. Although these are useful information sources, they are rarely controlling. Non-contracted providers should also consider this guidance when making coding decisions because such guidance alerts the provider either to what the carrier expects to see, or how they will interpret the codes you report.
The remaining problem is the situation where there is no controlling statutory, regulatory, or contractual guidance nor is there carrier generated persuasive guidance. At this point, you must turn to other persuasive guidance. In such a circumstance, following CMS, AMA, or other national association guidance would provide a reasonable basis for your coding decisions. When there is no controlling or carrier generated persuasive guidance, selecting the external standard that provides the best reimbursement result is proper. Before doing so, however, make sure there is no controlling criterion requiring you to report differently.
Substantiate Code Choices
Never make coding decisions based on the unsubstantiated advice of others, and absolutely never rely on payment to establish the validity of your code choice (“They paid it so it must be okay.”). Research the criteria applying to each coding situation. Although this is time consuming initially, when you identify relevant controlling criteria, and credible persuasive criteria where no controlling criteria exists, your ability to apply these rules and code correctly will not only make you a more competent professional coder, but also an invaluable asset to your employer.
Michael D. Miscoe JD, CPC, CASCC, CUC, CHCC, is president of Practice Masters, Inc., a past member of the AAPC National Advisory Board (NAB) and current member of the Legal Advisory Board (LAB). He is admitted to the Bar in the state of California as well as to the practice of law before the U.S. District Courts in the Southern District of California and the Western District of Pennsylvania. Mr. Miscoe has nearly 20 years of experience in health care coding and over 12 years as a compliance expert testifying in civil and criminal cases.
Latest posts by admin aapc (see all)
- US gets the ball rolling on ICD-11 - August 16, 2019
- Message From Your Region 7 Representatives | October 2018 - October 24, 2018
- Message From Your Region 6 Representatives | October 2018 - October 24, 2018