Medicare Compliance & Reimbursement

Question: Some of our recently-hired staff are struggling to keep up with the steady stream of buzzwords and acronyms from our Medicare carrier. Can you list some definitions for some common acronyms related to reimbursement that we can offer our employees for quick reference?

Florida Subscriber

Answer: Here is a short list of reimbursement-related acronyms that your staff should know when dealing with the Part A/B Medicare Administrative Contractors (MACs).

• ABN: An Advance Beneficiary Notice (ABN) is a document that you provide to a Medicare patient ahead of a service or procedure if you think that Medicare might not pay for part, or all, of the service. The ABN’s purpose is to offer the patient as much information as possible before deciding whether to proceed with a treatment.
• EOB: The Explanation of Benefits (EOB) is a form that insurers send patients after they process a medical claim. Patients often mistake the EOB for a bill, but it is not. Instead, it is a detailed explanation of the claim and services rendered.
• IOM: Internet-only Manuals (IOMs) are defined by CMS as “a replica of the agency’s official record copy.” What that means is that IOMs cover the Medicare daily posts, rulings, policies, and updates to procedures and coverage — guidebooks for understanding CMS.
• LCD: A Local Coverage Determination (LCD) relates to MAC limitations placed on particular items and services under its distinct jurisdiction.
• MSP: Medicare Secondary Payer (MSP) refers to the process of payment when Medicare is the second insurer after another entity who holds the primary payment responsibility.

• MUE: Medically Unlikely Edits (MUE) were established by the Centers for Medicare & Medicaid Services (CMS) as a unit-of-service edit for HCPCS Level II/ CPT^® codes. An MUE is assigned to a specific code to represent the maximum number of units of the code that you should report — either on a specific claim or on a specific date. CMS developed the edits to reduce the paid claims error rate for Medicare claims.
• NCD: National Coverage Determinations (NCDs) pertain to the nationally recognized information on coverage for a service or item. CMS provides extensive laboratory NCDs.
• OCA: An Overpayment Claims Adjustment (OCA) happens when Medicare determines that a provider has been overpaid for care given. The OCA is the process that occurs to rectify the overpayment to be paid back to Medicare.
• RA/ERA: Remittance Advice (RA) or the Electronic Version (ERA) is sent to providers after a claim has been submitted to the MAC. The RAs or ERAs are itemized and offer information about the payment and any adjustments made by Medicare.