As we’ve covered statistically where our greatest challenges and opportunities lie, it’s important to recognize the appeal process is NOT a one-size-fits-all solution.
Lesson 1: Report Documentation — “If it isn’t documented, it wasn’t billable”
Appeals with path reports are much more common in the pathology and laboratory industry now than they were historically; in addition, pre-payment reviews have been instituted by payors. While other specialties have the benefit of progress notes, records of all visits, and various testing performed, pathology and laboratory claims are typically limited to a pathology or laboratory report and requisition. This places even more value on the critical first step of a successful appeals process: ensuring report documentation outlines all services provided and the medical necessity of those services.
Industry edits and payor requirements influence how we perform and document the services rendered. Here, we’ll cover some examples:
National Correct Coding Initiative (NCCI) edits were established by CMS in 1996 and are also known as column 1/column 2 edits or mutually exclusive edits. Medicare created this edit system to prevent improper payment when two procedures could not be performed at the same patient encounter because the two procedures were mutually exclusive based on the anatomic, temporal, or gender considerations. The majority of edits for pathology and laboratory are published edits and they are updated quarterly. This allows the edits to be incorporated into billing systems so claims can be “scrubbed” prior to sending to the payor, allowing these services to be adjudicated upon the initial filing of the claim rather than through a denial or appeal process. If services are separately identifiable and this is supported by report documentation, a modifier can be added to the column 2 code indicating this procedure is not a component of the column 1 code. An example of this would include a breast case in which both quantitative stains (88360) and qualitative stains (88342) were performed. NCCI identifies the 88342 as a component of the quantitative stain and the 88342 procedure would be denied. Adding an appropriate modifier to the 88342 code would indicate two separately identifiable stains were performed and both should be reimbursed.
Local Carrier Determination (LCD) and National Carrier Determination (NCD) edits are policies outlining the conditions or diagnoses qualifying for payment of the service. These edits not only limit which conditions qualify for reimbursement of the test, but also the frequency with which the test will be reimbursed. National Coverage Polices are observed by all Medicare carriers, but each carrier can create its own local coverage policies to address any issues arising in its jurisdiction. Providers should be aware that Medicare carriers and third-party payors use data mining, claims submissions and billing trends to identify services or areas that may warrant the institution of payor policies or LCDs. There has been incredible growth with LCDs for path and lab as molecular testing has expanded.
Medically Unlikely Edits (MUE) outline the maximum units of service per day eligible for payment. There has been a shift in denial trends in the last few years, particularly with Medically Unlikely Edit Date of Service denials. Previously, these edits could be line-itemed and modified prior to billing to receive payment, but CMS has now classified the majority of MUE denials related to pathology as DOS denials. These services will only be reimbursed after the receipt of a denial and an appeal with path report is filed. The pathology report will be reviewed by the payor’s auditor to determine if payment is warranted, so it is important to ensure documentation is accurate, complete and meets all payor/AMA requirements for billing these services.
This is another area where documentation is key. The person auditing your reports likely will not have a pathology or laboratory background and this will lead to consulting the AMA CPT Manual when auditing reports. Including CPT verbiage in your report documentation is one way to decrease the potential of a denial. For example:
Pathologists are unique in that they have been granted the ability to order their own special stains rather than wait on an order from the treating physician. The CMS Benefit Policy Manual (CPT15, Section 80.6.5), outlines the criteria to be met for pathologist-ordered stains: the service must be medically necessary for patient diagnosis and treatment, results of the tests are communicated to the treating physician, and the report must indicate why the additional testing is done.
This policy has been in place for many years, and pathologists are usually very thorough when documenting the stains performed and results of each stain. However, pathologists can be remiss in documenting why the stains are required. It is not uncommon for carriers to deny an appeal based on this policy and the reason cited for denial is the lack of an order for the test. This could be a costly denial, particularly when dealing with complex cases. Including verbiage in your report indicating stains were performed to differentiate between two different types of cancer or noting H&E findings leading to the special stains will avoid this pitfall.
Lesson 2: Monitor Denial Reports as If They Were Financials
Denial analysis reports are an effective tool in reducing the volume of denied cases. We know Medicare and Medicare Advantage plans utilize NCCI and MUE edits, but it is not always clear which third-party payors also observe these edits. While some payor policies clearly state they observe NCCI edits, other payors may not disclose this information. If you consistently receive CO-97, CO-151, and/or PR-96 denials from commercial payers, this could be an indication they are utilizing CMS edits. When this occurs, XIFIN updates our client’s billing process to proactively include that payor in their pre-payment modifier review, preventing the denials downstream. It is also recommended that cases requiring an appeal with pathology report are reviewed to ensure documentation and units are accurate prior to initial billing. These cases will still require an appeal with pathology report after denial, but performing the review on the front end will allow the AR team to issue the appeal quickly with the goal of reducing days in AR.
In a recent review of denial trends, we observed the following:
An example of this would include a bone marrow case in which ISH testing, molecular testing, flow cytometry, and immunostains are performed. This case could potentially trigger NCCI, LCD, and MUE edits. Post-denial management of this case will result in a lower initial payment and the road to final adjudication could involve multiple corrected claims and appeals. Optimizing the billing process ensures quicker resolution on these high-dollar cases.
Lesson 3: ICD Coding Drives the Medical Necessity of Claims
Pathology and laboratory practices should work with referring physicians to ensure they receive the reason for each test requested. A complete clinical history is key in assigning accurate diagnosis codes and navigating various payor policies related to diagnosis coding. For example, a patient may present for an annual screening pap smear, but upon examination, a bacterial vaginosis panel is ordered. A bacterial vaginosis panel billed with a screening Pap smear diagnosis code will not meet medical necessity criteria outlined by the payor policy. Fortunately, providers have the option of reporting diagnosis codes at either a claim level or at the CPT level. It is beneficial to code at the CPT code level for clinical laboratory testing, provided laboratories receive all pertinent information.
For anatomic pathology, services can often be coded at the case level as most tests on a single accession culminate in the final diagnosis. One exception, though, is flow cytometry testing, which is subject to medical necessity LCDs. There are benefits to diagnosis coding these specimens at the CPT level, particularly when flow results are benign or negative for significant findings. ICD-10 coding guidelines require diagnostic tests that have been interpreted by a physician to be coded based on any confirmed or definitive diagnosis documented in the interpretation. Specimens that are normal or benign should be coded based on the reason for testing or documented clinical history.
An example of this would include a patient that presents with enlarged lymph node in which flow cytometry results are normal, and the surgical specimen is diagnosed with non-specific inflammation. If this claim is diagnosis coded at the claim level based on inflammation, the claim would likely receive a denial on the flow services, as inflammation is not considered to be medically necessary for flow cytometry testing. However, if the flow cytometry service was coded based on the clinical history of an enlarged lymph node (because flow results were normal), this would be a medically necessary service under the LCD.
Lesson 4: Get Involved
The establishment of an LCD requires carriers to publish the proposed determination, the evidence used for development, and open the determination for public comment. Carriers are then required to review and respond to the comments, and if applicable, amend the original LCD proposal. While the comment period is an excellent time to influence the development of an LCD, providers have also been known to effect change on established LCDs by interacting with the carriers on a personal level. In one scenario, a hematopathologist successfully lobbied with the medical director of her Medicare Administrative Contractor (MAC) to have certain diagnostic conditions added the flow cytometry LCD. This allowed the hematopathologist and MAC to coordinate on updates to the LCD and the hematopathologist now has a relationship with the carrier and contacts to work with regarding lab policy.
CMS and the AMA coordinate with specialty societies to develop policies and procedures. These organizations have workgroups dedicated to addressing these issues and gives providers another way to influence policy.
Lesson 5: Be Persistent
As covered in Part 2 of this blog series, there is a tremendous amount of benefit in appealing multiple times. First level appeals are handled by the MAC and that generally includes submitting path report and requisition with a request to review the denials. This appeal must be filed within 120 days of the original adjudication.
If this is denied, proceed to the second level appeal, which is handled by a Qualified Independent Contractor (QIC) that did not take part in the level 1 decision. The request for reconsideration by a qualified independent contractor (QIC) must be filed within 180 days of the level 1 appeal. This request should outline why the provider disagrees with the redetermination decision, reason why the denied service was necessary, and any other documentation that that may benefit the appeal. This additional documentation could come from clinical trials supporting the clinical utility of the testing, or documentation from authoritative sources regarding proper coding of the denied services.
Third level appeals are handled by the Office of Medicare Hearings and Appeals (OMHA) and may be handled by an Administrative Law Judge (ALJ) or OMHA attorney adjudicator. This appeal should be filed within 60 days of receipt of the reconsideration decision letter from the level 2 appeal and the claim must have a value of $180 or more to be eligible for an ALJ hearings. Multiple claims can be combined in this appeal process to meet the payment threshold.
The appeals process is a fluid process that requires constant monitoring and oversight, and providers will need to use various tools to effectively manage denial processes.