Denial Reasons You Never Saw Coming

By Jacqueline Thelian, CPC, CPC-I, CHCA, CPMA for For the Record

Many health care organizations can relate to the following scenario: An insurance carrier, Medicare, or a Medicaid HMO requests medical records for the purpose of an audit. The provider believes it has forwarded all the necessary supporting documentation, but the results indicate a 90% to 100% error rate.

What went wrong?

Let’s examine a few of the most common denial reasons and how to avoid them in the future.

The John Hancock

First, did the medical records include a “valid” electronic signature? Did they include two signatures?

Unsigned medical records are considered unauthored notes and therefore do not constitute a billable service. With the prevalence of EMRs, many electronic signatures are not in compliance with the standards set by the Centers for Medicare & Medicaid Services (CMS).

CMS considers the following to be a valid electronic signature: “Electronically Signed By: John Doe, MD, 08/01/2016 @ 8:15 am.” The signature includes the provider’s name and credentials, the date it was signed, and the time stamp.

Keep in mind that signature stamps are not valid. In cases where the notes were submitted and not signed, CMS allows for a signature attestation: “You may attest that a signature is yours through a signature attestation statement. A signature attestation statement must be signed and dated by the author of the medical record entry (that is, by you, the ordering physician or nonphysician provider) and must contain sufficient information to identify the patient.”

Oftentimes the carrier will allege impossible billing based on all of the patient notes being signed by one provider, which naturally would exceed the work hours in a day. Typically in these cases, the services were provided by another physician, a physician’s assistant, or a nonphysician provider who was either not credentialed in the plan or who did not have a license to document in the EMR notes.

Either way, it leads to all claims being billed under one provider. This results in a misrepresentation of who actually provided the service. The back of the CMS1500 claim form states, “NOTICE: Any person who knowingly files a statement of claim containing any misrepresentation or any false, incomplete, or misleading information may be guilty of a criminal act punishable under law and may be subject to civil penalties.”

The goal is to ensure each rendering provider has a valid license in the EMR and the note is signed and dated by the rendering provider.

Valid Orders

For ordering providers, the medical necessity for the diagnostic test is most likely documented in the patient’s progress note. However, radiology facilities, labs, and providers who were sent a referral to perform a diagnostic test require an order from the requesting provider.

At minimum, a valid order contains the patient’s name, the test(s) requested, the clinical indication for the test, and a legible name, including the signature and date of the requesting provider.

It may sound simple enough, but the servicing provider is responsible for validating the order, which requires him or her to provide the ordering provider’s patient’s medical record that validates the order. In certain circumstances (such as audits), providers may be instructed to collect and maintain this documentation from the ordering practitioner and other licensed health care professionals in their files and provide it to the carrier upon request.

Additionally, “CMS recognizes that providers and suppliers often rely on an employer or another entity to maintain these records on their behalf. However, it remains the responsibility of the individual or entity upon whom/which the request has been made to provide documentation.”

If the service provided includes images, they should include the name and credentials of the technician who performed the test. Any provider performing a test with a technical component is responsible for keeping a record of their technicians and ensuring their credentials are up to date. This information will more than likely be requested in an audit situation—even if the requesting provider is the servicing provider performing the test.

If the requesting provider is also the servicing provider, carriers will look to see how those test results are utilized in the management/treatment of the patient.

In summary, all diagnostic, laboratory, and radiology tests must include a valid order, supporting documentation from the ordering provider, and, if the ordering provider is the servicing provider, how the test results are utilized in the management/treatment of the patient.

Education and Equipment Requirements

Many providers who purchase diagnostic testing equipment overlook education and equipment requirements. Prior to making any purchase, providers should do their due diligence to determine whether the type of equipment being sold is recognized by CMS to perform the test and to determine whether they have the supporting education requirements to provide the test. (This information is readily available in the local coverage determinations as well as the CMS Internet Only Manual.)

For example, in order to perform videonystagmography testing, many Medicare Administrative Contractors note that the vestibular and audiologic testing reported for Medicare payment must be performed by or directly supervised by persons possessing appropriate knowledge and technical expertise of vestibular and hearing. Therefore, Medicare will allow payment for the following:

• physicians who have completed training requirements sufficient to satisfy the relevant American Board of Medical Specialties/American Osteopathic Association boards for certification in otolaryngology, neurology, neurologic surgery, and physical medicine and rehabilitation; and

• audiologists licensed by the state(s) in which they practice and are performing services within their state licensure’s scope of practice and Medicare regulation.

Equipment for the Current Perception Threshold/Sensory Nerve Conduction Threshold (sNCT) test is not covered by Medicare. Despite the sNCT having a unique code (G0255), many different types of nerve conduction equipment are marketed as providing nerve conduction velocity testing when in actuality they provide sNCT services.

Other Denial Types

The format of EMRs lends itself to a tremendous amount of cutting and pasting, which is quickly becoming a favorite reason for carriers to deny a claim, especially when many of these notes are filled with typos. This brings into question the integrity of the data as well as the medical necessity for performing comprehensive histories and physicals for patients presenting for a quick follow-up or a prescription refill.

Both the CPT Manual and CMS are clear regarding cloning and the volume of documentation. All evaluation and management (E/M) services include “the nature of the presenting problem” as a contributing component toward the level of service. This aspect is often overlooked when providers select the level of service.

According to the CPT Manual, “The three components (history, examination, and medical decision making) must be met, consistent with the nature of the presenting problem and documented in the medical records to report a particular level of service.”

CMS provides the following guidance: “Even if a ‘complete’ note is generated, only the medically reasonable and necessary services for the condition of the particular patient at the time of the encounter as documented can be considered when selecting the appropriate level of an E/M service. Information that has no pertinence to the patient’s situation at that specific time cannot be counted.”

The arrival of artificial intelligence into insurers’ claims processing systems has affected the status of bills submitted with modifier 25. Basically, the system is set up to deny an E/M service with a modifier 25 billed on the day of a related procedure when there is a recent service or procedure for the same or similar diagnosis on record for the same provider (or a provider with the same specialty within the same group tax identification number).

As a result, many claim denials for follow-up visits for patients with the same diagnosis as “recent” have not been clearly defined. Additionally, the policy is based on an incorrect interpretation of modifier 25; it relates more to the policy of “global days,” which speaks to related follow-up visits in a defined period of time as opposed to the true definition of modifier 25 (“significant, separately identifiable evaluation and management service by the same physician on the same day of the procedure or other service”).

Insurers are tweaking the use of artificial intelligence, and more than likely it will not be long before we see it incorporated into the claim processing systems for other policies.

Wrap-Up

To avoid these denials, providers should do the following:

• Read the local coverage determinations for more than just the covered diagnosis codes—they contain important information on the education and equipment requirements.

• Read the guidelines related to valid orders and required documentation.

• Ensure that the electronic signature meets CMS requirements and notes are signed in a timely manner.