Under Section 111 Mandatory Insurer Reporting, Responsible Reporting Entities (RREs) are required to report ICD 09 Event Codes and ICD 09 Diagnosis Codes.  The diagnosis codes, DX codes in CMS parlance, are stored on the Common Working File (CWF) and used by the MACs (intermediaries) to deny medical claims related to the reported DX codes.  Over the last year, many claims processors and insurers have noticed an uptick in Medicare denials.  The majority of the denials can be attributed to increased data from Section 111 reporting, but lack of provider sophistication and problems at the MACs have been contributing to the problem.  CMS has addressed the MAC issues by issuing guidance on determining relatedness of medical claims.

Providers are part of the problem

Some providers do not realize they can bill Medicare for claims unrelated to the incident, so they do not even try to submit the claim when they see an MSP record on the CWF.  Others do not realize that they can bill Medicare conditionally, if the insurer is unlikely to pay within 120 days.  These denials have sent many beneficiaries and claims processors to 800 - MEDICARE.

800-MEDICARE is inconsistent

Unfortunately, the quality of the response from 800 MEDICARE are not consistent and frequently wrong.  Some Call Service Representatives (CSRs) have told the insurers they must terminate their reported ORM before any claims can be approved. This is patently not the case and we sent along such reports to CMS, where they are currently in the process of updating the CSRs scripts to provide better guidance in these situations.

Be Aware of How your Report Affects Medicare Denials

Another problem has been that MACs were inconsistently denying claims.  That problem has been addressed and should be improving.  The solution is interesting and is directly impacted by the DX codes the RRE chooses to submit -- making specificity less important in some instances.  For instance, codes for Pheumonconiosis and other lung diseases due to external agents (e.g., asbestos) are 501- 508.  Any claim associated with that range of DX codes will be denied.  For instance, if the RRE reports 501 and a claim is presented encoded as 505, the claim will be denied.  Similarly all fractures of the skull will be lumped together.  Other codes will be grouped by 3-digit categories.  For instance, dislocations (DX codes 830 through 839) will be treated as related within that three digit code; if the RRE reports 831.1, a claim will be denied when encoded as 831.2, but a claim encoded as 832.1 will not be denied.  Codes with a fifth digit, will be lumped into the 4-digit grouping -- so they are irrelevant when reported by the RRE to the denial process.

Impact to reporting

Our recommendation is to continue to use the most specific codes to establish an audit trail for your responsibility to pay medical claims or clearly define your liability, but you do not have to submit multiple codes in the same 3-digit category.  For instance, reporting 832.2 and 832.3.