the integrated outpatient code editor i/oce...

3/24/2014

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The Integrated Outpatient Code Editor I/OCE V15.0

1 April 2014 Updated

Disclaimer

The comments expressed throughout this presentation are our opinions,

predicated on our interpretation of CMS regulations/guidelines and our

professional healthcare experiences.

CPT® codes and descriptions only are copyright 2014 American Medical

Association. All rights reserved.

2 ©Verisk Health, Inc. All Rights Reserved

Duke University Medical Center

Durham, NC

3/24/2014

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Presentation Outline Claim Life Cycle

• Claim form UB-04 (CMS 1450) and NUBC

• Data Elements

• Charge Description Master (CDM)

• CMS Editing

• Claim Flow

I/OCE Edits and Special Processing Rules

• History and Versions of I/OCE

• I/OCE Disposition Concepts

• Appendices

• APCs

• Inactive Edits and Special Processing Rules

• Active Edits and Special Processing Rules

Questions


University of North Carolina at Chapel Hill

Morehead Patterson Bell Tower

OPPS/non-OPPS

This presentation pertains to claims subject to

the Outpatient Prospective Payment System

(OPPS).

Most facilities are subject to OPPS with the exception of Critical Access Hospitals

(CAHs), Community Mental Health Centers (CMHCs), Indian Health Service

hospitals; hospitals located in American Samoa, Guam, Saipan and the Virgin

Islands and certain hospitals in Maryland which are paid under the Maryland waiver

provisions.


Wake Forest University Baptist Medical Center

Winston Salem, NC

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5

Claim Form – CMS 1450 (Uniform Bill or UB-04)

Electronic claims

submission is in the

837I (institutional)

format.

Companion Guide – describes some

data elements

https://www.cms.gov/Medicare/Billing

/ElectronicBillingEDITrans/download

s/5010A2837ACG.pdf

See also: technical documentation

information

http://www.cms.gov/Medicare/Billing/

MFFS5010D0/Technical-

Documentation.html

©Verisk Health, Inc. All Rights Reserved

National Uniform Billing Committee

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Excerpt from Medicare publication UB-04 Overview Background

The National Uniform Billing Committee (NUBC) is responsible for the design and printing of the

UB-04 form. The NUBC is a voluntary, multidisciplinary committee that develops data elements

for claims and claim-related transactions, and is composed of all major national provider and

payer organizations (including Medicare).

The 837 Institutional electronic claim format is the electronic version of the form and is in use by

providers who submit claims electronically.

Visit Chapter 25 of the Medicare Claims Processing Manual, Internet-Only Manual Publication

(IOM Pub) 100-04 at http://www.cms.gov/manuals/downloads/clm104c25.pdf to learn more

about the UB-04.

Additional information is available to subscribers of the Official UB-04 Data Specifications

Manual. Visit the NUBC website at http://www.nubc.org to subscribe.

This fact sheet was prepared as a service to the public and is not intended to grant rights or

impose obligations. This fact sheet may contain references or links to statutes, regulations, or

other policy materials. The information provided is only intended to be a general summary. It is

not intended to take the place of either the written law or regulations. We encourage readers to

review the specific statutes, regulations, and other interpretive materials for a full and accurate

statement of their contents.

This publication contains information regarding required fields, the size and type of data each field can hold.

See CMS Manual 100-04, Chapter 25 for more information.


https://www.cms.gov/Medicare/Billing/ElectronicBillingEDITrans/downloads/5010A2837ACG.pdf





http://www.cms.gov/Medicare/Billing/MFFS5010D0/Technical-Documentation.html





http://www.cms.gov/manuals/downloads/clm104c25.pdf

http://www.cms.gov/manuals/downloads/clm104c25.pdf

http://www.nubc.org/

http://www.nubc.org/

3/24/2014

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Each claim will consist of some or all of the following data elements for processing in I/OCE.

Required (R) fields must be completed on all claims. Conditional (C) fields must be

completed if the information applies to the situation or the service provided.

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Data Elements


Charge Description Master (CDM)

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• The CDM is a large electronic file which contains the charge books for each of the facility

departments.

• The CDM contains coding information (CPT, HCPCS and National Drug Codes), quantity (quantity in

a single unit for the charge code – for example, 10ml), modifiers (some modifiers can be hard-coded

in the CDM – for example, GP for services delivered under an outpatient physical therapy plan of

care may be hard-coded for some services for certain PT services) and the charges associated with

that service or procedure.

• Physician coders choose the “charge code” (which may be a CPT code) which maps to pricing

information in the CDM based on documentation. The coding on outpatient facility claims are often

obtained when technicians, nurses or other personnel enter the charge code at the time of service.


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CMS Editing

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Medicare (CMS) has many processes for claims editing.

• Common Edit Module (CEM) – Edits claims from facilities and professionals in the electronic files

(837 institutional and 837 professional) for items such as code sets (appropriate use and validity of

codes such as country codes, zip codes, ambulance modifiers, drug codes (NDC), condition codes,

value codes, occurrence codes, HIPPS codes), it also checks for duplicates and assigns the document

control number (DCN).

• Medicare Code Editor (MCE) – Edits inpatient facility claims by performing 3 types of Edits and

Processing Rules prior to assigning a DRG: correct use of ICD-9 diagnosis and procedure codes

(validity and relationships), coverage (are services covered for the patient type – inpatient etc), and

clinical consistency (for DRGs)

• Fiscal Intermediary Shared or Standard System (FISS) – this is the system which handles claims

submitted by facilities. With certain exceptions, FIs perform bill processing and benefit payment

functions for Part A of the program (Hospital Insurance) and carriers perform claims processing and

benefit payment functions for Part B of the program (Supplementary Medical Insurance). Medicare

carriers determine payment amounts and make payments for services (including items) furnished by

physicians and other suppliers such as nonphysician practitioners (NPP), laboratories, and durable

medical equipment (DME) suppliers.

• Integrated Outpatient Code Editor (I/OCE) - The ‘Integrated' Outpatient Code Editor (I/OCE) program

processes claims for all outpatient institutional providers including hospitals that are subject to the

Outpatient Prospective Payment System (OPPS) as well as hospitals that are NOT (Non-OPPS). It is

the subject of this presentation.

• Common Working File (CWF) - The Common Working File is a Medicare tool which handles benefit

coordination and claims validation. It is used to verify entitlement, maintain utilization data (such as,

yearly visit allowances etc.) and prevent improper payment (comparison of Part A and Part B claims).



Puzzled on the CMS Claim Flow?

Provider

FISS

CWF

FISS

Provider

CMS

Provider Fiscal

Intermediary

Shared System

(FISS) and OCE.

Claim is edited

but not paid.

Pricing,

payment,

rejection, etc.

CWF

Common Working File (CWF)

Entitlement and utilization review.

Authorization. Some claim scrubbing.

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Integrated Outpatient Code Editor (I/OCE)

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Three functions:

1. Edit data and return edit flags

2. Assign Ambulatory Payment Classifications (APCs)

3. Assign Ambulatory Surgical Center (ASC) groups for non-OPPS(Out Patient

Prospective Payment System) hospitals

• Claims contain multiple dates of service but, it is the user’s responsibility

to gather all services on a single record

• Claims processing is on a single claim only (no history)

• Accepts up to 450 lines per claim

• Single claim line may receive multiple Edits and Processing Rules

The OCE not only identifies individual errors but also indicates what actions

should be taken and the reasons why these actions are necessary. In order to

accommodate this functionality, the OCE is structured to return lists of edit

numbers. This structure facilitates the linkage between the actions being

taken, the reasons for the actions and the information on the claim (e.g., a

specific diagnosis) that caused the action).


I/OCE Overview

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• I/OCE is updated quarterly

• There are currently 87 numbered Edits and 22 Processing

Rules in the most recent CMS I/OCE specification V15.0 =

January, 2014.

• 20 are not currently active (were active in previous

versions, were never activated or were deleted and

combined with other Edits)

• 1 edit (#15 Service unit out of range for procedure)

Currently active, however there is no data associated

with it.

• 67 current active Edits

• 1 special processing rule, Rule 5, is no long in effect

(multiple drug APCs on same date require modifier 59)


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History and Versions of I/OCE

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The Outpatient Code Editor (OCE) was developed for the implementation of the

Medicare OPPS mandated by the 1997 Balanced Budget Act. CMS proposed the OPPS

rules using the APC system in September 1998. Final regulations were published April 7,

2000. The OCE system became effective on August 1, 2000 for dates of service on or

after July 1, 2000.

The I/OCE is updated quarterly. A version identification number is assigned to the CMS

Specifications Version for each quarter. The CMS I/OCE maintains 28 prior quarters (7

years) of programs in each release. Valid versions:

27 = April 2007 = 8.1

28 = July 2007 = 8.2

29 = October 2007 = 8.3

30 = January 2008 = 9.0

31 = April 2008 = 9.1

32 = July 2008 = 9.2

33 = October 2008 = 9.3

34 = January 2009 = 10.0

35 = April 2009 = 10.1

36 = July 2009 = 10.2

37 = October 2009 = 10.3

38 = January 2010 = 11.0

39 = April 2010 = 11.1

40 = July 2010 = 11.2

41 = October 2010 = 11.3

42 = January 2011 = 12.0

43 = April 2011 = 12.1

44 = July 2011 = 12.2

45 = October 2011 = 12.3

46 = January 2012 = 13.0

47 = April 2012 = 13.1

48 = July 2012 = 13.2

49 = October 2012 = 13.3

50 = January 2013 = 14.0

51 = April 2013 = 14.1

52 = July 2013 = 14.2

53 = October 2013 = 14.3

54 = January 2014 = 15.0



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Edit Disposition Concepts

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Return to Provider, Reject, Deny, Suspend • Claim Rejection occurs when an edit causes the entire claim to reject. The

provider may make necessary corrections and resubmit the claim. This is

usually related coverage of the services submitted; for example, only incidental

services are submitted (edit 27).(The claim is accepted so the resubmission

needs to have a corrected claim bill type xx7).

• Claim Denial occurs when an edit causes the entire claim to deny. The

provider may appeal the denial but cannot resubmit the claim. Example, edit

10, submitted for denial. This would be the case when it is necessary to have

the denial from Medicare prior to processing the claim by the secondary payer.

• Return to provider (RTP) occurs when an edit fires which prevents proper

processing of the claim. The provider can correct the data element which is

responsible for the edit and resubmit the claim. (These claims have not been

accepted and should be resubmitted as new claims, bill type = xx1).

• Claim Suspension occurs when the FI/MAC needs to manually review the

claim prior to payment. For example, edit 66 (code requires manual pricing).

• Line item rejection is similar to claim rejection except that the rest of the claim

continues to process.

• Line item denial is similar to claim denial except that the rest of the claim

continues to process.


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I/OCE Specification Appendices

• Appendix A - Bilateral Procedure Logic (OPPS & Non-OPPS)

• Appendix B - Rules for Medical and Procedure Visits on the Same Day

and for Multiple Medical Visits on the Same Day (OPPS Only)

• Appendix C(a) – PHP and Mental Health Logic (OPPS Only)

• Appendix D - Computation of Discounting Fraction (OPPS Only)

• Appendix E(a) - Logic for Assigning Payment Method Flag Values to

Status Indicators by Bill Type

• Appendix F(a) – OCE Edits Applied by Bill Type

• Appendix F(b) – OCE Edits Applied by Non-OPPS Bill Type

• Appendix G – Payment Adjustment Flag Values (OPPS Only)

• Appendix H – (OPPS Only)

• Appendix I – Drug Administration (OPPS Only)

• Appendix J – Billing for blood/blood products (OPPS Only)

• Appendix K – Composite APC Assignment Logic

• Appendix L – OCE overview

• Appendix M – Summary of Modification

• Appendix N – Code Lists Referenced within CMS I/OCE Spec Document


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Row # Provider/Bill Types Edits Applied (by edit number)

1 12x or 14x with condition code 41 46

2 12x or 14x without condition code 41 1-9, 11-18, 20-23, 25-28, 35-38, 40-45, 47-50, 52-54, 56-58, 60-79, 81-85, 87

3 13x with condition code 41 1-9, 11-18, 20-23, 25-28, 29-34, 37, 38, 40 - 45, 47-50, 52, 54, 56-58, 60-62, 65-80, 82–85, 87.

4 13x without condition code 41 1-9, 11-18, 20-23, 25-28, 35- 38, 40-45, 47- 50, 52, 54, 56-58, 60-79, 81, 82-85, 87

5 76x (CMHC) 1-9, 11-13, 15, 18, 23, 25, 26, 29-34, 38, 41, 43-45, 47-50, 53-55, 61, 65, 69, 71-73, 75, 77- 80, 82, 84, 85, 87

6 34x (HHA) with Vaccine, Antigens, Splints or Casts 1- 9, 11-13, 15, 18, 20, 25-26, 28, 38, 40, 41, 43-45, 47, 49-50, 53-55, 62, 65, 69, 71, 73, 75, 77-79, 82, 84, 85, 87

7 34x (HHA) without Vaccine, Antigens, Splints or Casts 1-9, 11-13, 20, 25, 26, 40-41, 44, 50, 53-55, 65, 69.

8 75x (CORF) with Vaccine (PPS) [v1-6.3] 1-9, 11-13, 15, 18, 20, 25, 26, 38, 40-41, 43-45, 47-50, 53-55, 61, 62, 65, 69, 71-73, 75, 77 -79, 82, 84, 85, 87

9 43x (RNHCI) 25, 26, 41, 44, 46, 55, 65.

10 71x (RHC), 73x/77x (FQHC) 1-5, 25, 26, 41, 61, 65, 72.

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Any bill type except 12x, 13x, 14x, 34x, 43x, 71x, 73x/77x, 76x, with CC 07, with Antigen, Splint or Cast

1-9, 11-13, 18, 23, 25, 26, 28, 38, 41, 43-45, 47, 49, 50, 53-55, 62, 65, 69, 71, 73, 75, 77 -79, 82, 84, 85, 87.

12 75x (CORF) 1-9, 11-13, 15, 20, 23, 25, 26, 40, 41, 44, 48, 50, 53-55, 61, 65, 69, 72.

13 22X, 23X (SNF), 24X 1-9, 11-13, 20, 23, 25, 26, 28, 40-41, 44, 50, 53, 54, 55, 61, 62, 65, 69, 72.

14 32X, 33X (HHA) 1-5, 7-9, 11, 12, 25, 26, 41, 44, 50, 53-55, 65, 69.

15 72X (ESRD) 1-5, 7-9, 11, 12, 25, 26, 41, 44, 50, 53, 54, 55, 61, 65, 69, 72.

16 74X (OPT) 1-9, 11-13, 20, 25, 26, 40-41, 44, 48, 50, 53, 54, 55, 61, 65, 69, 72.

17 81X (Hospice), 82X 1-5, 7-9, 11, 12, 25, 26, 41, 44, 50, 53, 54, 55, 61, 65, 69, 72, 86.

Appendix F(a) – OCE Edits Applied by Bill Type [OPPS flag =1]

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1 Edit 10, and edits 23 and 24 for From/Through dates, are not dependent on Appendix F.

2 If edit 23 is not applied, the lowest service (or From) date is substituted for invalid dates and processing

continues.

3 Edit 22 is bypassed if revenue code is 540.

4 Edit 77 is not applicable to bill type 12x (rows #1 and #2).

5 Bypass edit 48 if revenue code is 100x, 210x, 310x, 0500, 0509, 0521, 0522, 0524, 0525, 0527, 0528, 0583,

0637, 0660-0663, 0669, 0905-0907, 0931, 0932, 0948, 099x.

6 In V1.0 to V3.2, “vaccines” included all vaccines paid by APC; from V4.0 forward, “vaccines” includes Hepatitis

B vaccines only, plus Flu, H1N1 and PPV administration.

7 Bypass diagnosis edits (1-5) for bill types 32x and 33x (HHA) &12x (inpt/B) if From date is before October 1 and

Through date is on or after October 1. And for bill types 322 & 332 if From date is between 9/26 and 9/30,

inclusive. Note: Bill type 33X is deleted as of 10/1/2013.

8 Bill type 24x deleted, effective 10/1/05.

9 NCCI edits (20, and 40) applied to bill types 22x, 23x, 34x, 74x and 75x effective 1/1/06.

10 Edit 28 applied to bill type 22x and 23x effective 10/1/05.

11 Effective 4/1/06, MH edits (35, 36, 63, 64 and 81) not applicable to TOB 14x.

12 If TOB is 81x or 82x and RC = 657, bypass edit 72 for any HCPCS code with SI =M (& change the SI from M to

A).

13 Change TOB for FQHC from 73x to 77x, effective 4/1/10.

14 Psychiatric add-on codes trigger edit 84 only on PHP claims (TOB 13x w/CC41 & 76x).

15 Edit 86 applied to bill types 81X and 82X only, effective 10/01/2013.

Note # FLOW CHART ROWS ARE IN HIERARCHICAL ORDER.


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About APC’s


Each HCPCS code that represents a service paid under OPPS is assigned to an

APC. Other services are identified by a status indicator (SI) representing the

method of payment. APCs are applied in the full range of ambulatory settings,

including same day surgery, hospital ER, and outpatient clinics. A list of

HCPCS/CPT code along with the APC, and status indicator can be found in

Addendum B of the Hospital Outpatient PPS.

Types of APCs are:

Significant procedure - In general, surgical APCs are specified by SI=T; for

non-surgical significant procedures SI = S.

Drug/Biological pass-through - SI = G

Device pass-through - SI = H

Brachytherapy sources - SI = U

Medical visit - SI = V

Ancillary service - SI = X

Non-pass-through drug or non-implantable biologicals, including therapeutic

radiopharmaceuticals SI = K

Blood and blood products - SI = R

Partial hospitalization - SI = P

Inactive Edits and Processing Rules

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Special processing rule #5 “When multiple occurrences of any APC that represents drug

administration are assigned in a single day, modifier -59 is required on the code(s) in order to permit

payment for multiple units of that APC, up to a specified maximum; additional units above the

maximum are packaged. If modifier -59 is not used, only one occurrence of any drug administration

APC is allowed and any additional units are packaged.” v6.0-v7.3 only


Edit # Description Active Versions

4 Medicare secondary Payer Alert 1.0-1.1

7 Procedure and age conflict not activated

13 Separate payment for service is not paid by Medicare 1.0-6.3

14 Code indicates a site of service not included in OPPS 1.0-6.3

16 Multiple bilateral procedures without modifier 50 1.0-6.2

19 Mutually exclusive procedure that is not allowed by NCCI even if appropriate

modifier is present deleted retroactively in v13.2

31 Partial hospitalization on same day as ECT or type T procedure 1.0-6.3

32 Partial hospitalization claim spans 3 or less days with insufficient services on at

least one of the days. 1.0-9.3

33 Partial hospitalization claim spans more than 3 days with insufficient number of

days having partial hospitalization services 1.0-9.3

34 Partial hospitalization claim spans more than 3 days with insufficient number of

days meeting partial hospitalization criteria 1.0-9.3

36 Extensive mental health services provided on day of ECT or type T procedure 1.0-6.3

39 Mutually exclusive procedure that would be allowed by NCCI if appropriate

modifier were present deleted retroactively in v13.2

51 Multiple observations overlap in time not activated

52 Observation does not meet minimum hours, qualifying diagnoses, and/or "T"

procedure conditions 3.0-6.3

56 E/M condition not met and line item date for OBS code G0244 is not 12/31 or 1/1 4.0-6.3

59 Clinical trial requires diagnosis code V70.7 as other than primary diagnosis deleted retroactively in v11.2

63 This OT code only billed on partial hospitalization claims 1.0-13.3

64 AT service not payable outside the partial hospitalization program 1.0-13.3

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Active Edits and

Processing Rules


University of North Carolina Health Care System

Chapel Hill, NC


Data Validity Edits

Edit # Description

1 Invalid Diagnosis Code

6 Invalid Procedure Code

22 Invalid Modifier

23 Invalid date

24 Date out of OCE range

25 Invalid age

26 Invalid sex

41 Invalid revenue code

65 Revenue code not recognized by Medicare

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Diagnosis Related Edits

Edit # Description

2 Diagnosis and age conflict

3 Diagnosis and sex conflict

5 E-diagnosis code cannot be used as principle

diagnosis

56 Manifestation code not allowed as principle

diagnosis

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Procedure/Revenue/Modifier Code Edits and Processing Rules

Edit # Description

8 Procedure and sex conflict

54 Multiple codes for the same service

76 Trauma response critical care code without revenue code 68x and CPT 99291 - HCPCS

code G0390

48 Revenue code requires HCPCS

42 Multiple medical visits on same day with same revenue code without condition code G0

79 Incorrect billing of revenue code with HCPCS code

17 Inappropriate specification of bilateral procedure

37 Terminated bilateral procedure or terminated procedure with units greater than one

74 Units greater than one for bilateral procedure billed with modifier 50

21 Medical visit on same date a type “T” or “S” procedure without modifier 25

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Active Edits and Processing Rules

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Procedure/Revenue/Modifier and Code Edits and Processing Rules,

Continued

• Special processing rules 12) S, T, V or X Packaging Rules

• STVX packaging – HCPCS codes with status indicator (SI) = Q1 are packaged

when another HCPCS with SI=S, T, V or X is present on the same date. Example:

36591(Q1) with 29580(S)

• T packaging - HCPCS codes with status indicator (SI) = Q2 are packaged when

another HCPCS with SI=T is present on the same date. Example: 65778(Q2) with 65091(T)

• If not other lines with HCPCS with the specified SI are present, the code with SI=Q1

or Q2 will be paid separately.

13) Trauma Response Rules

• Trauma response critical care code (G0390) requires trauma revenue code (68x)

and critical care E&M (99291) on the same date of service; otherwise, trauma

response critical care code is rejected. Note: this processing rule is fully

encompassed in Edit #76.

18) Ancillary Critical Care Packaging Rules

• Certain ancillary services are conditionally packaged into critical care services when

furnished on the same date. The list of the packaged services is not available on

the CMS website. However, it is a subset of the codes listed in the physician rules

found in CPT(the codes which are not SI= N,A or B). This rule can be bypassed

when modifier 59 is present on the ancillary service. These packaged services have

SI=Q3 but not all Q3 codes are packaged into critical care.



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National Correct Coding Initiative (NCCI) Edits NCCI rules were established to check for code pairs that shouldn’t be billed

together on the same date for the same patient. All applicable NCCI edits are

incorporated into the I/OCE.

Both codes in a NCCI code pair may be allowed if an appropriate modifier is

used that describes the circumstances when both service may be allowed.

These codes will have a modifier indicator of “1” whereas codes pairs that are

never allowed, with or without an approved modifier present are identified

with a modifier indicator of “0”

• #20 Code2 of a code pair that is not allowed by NCCI even if appropriate

modifier is present. (Modifier indicator = “0”. Example: 59620 and 59050

• #40 Code2 of a code pair that would be allowed by NCCI if an appropriate

modifier were present. (Modifier indicator = “1”. Example: 20610 and

10140

• Modifiers that are recognized/used to describe allowable services are : 25,

27, 58, 59, 78, 79, 91, E1-E4, F1-F9, FA, LC, LD, LT, RC, T1-T9, AND TA


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27

Special processing rules

#3) One inpatient only procedure is allowed when the patient expires prior to

admission. The patient status code on the claim will be 20 (expired) and modifier CA

should be appended to the inpatient procedure. A single APC is paid for that date.

#4) The inpatient only edit (18) is bypassed when an inpatient only separate

procedure is performed with a SI=T (significant procedure subject to reduction). Edit

45 will fire, the line will be rejected but the claim will continue processing.


Inpatient Only Edits and Processing Rules

Edit # Description

18 Inpatient procedure. An inpatient only procedure is identified by SI=C

45 Inpatient separate procedure not paid

49 Service on same day as inpatient procedure

60 Use of CA modifier with more than one procedure not allowed

70 CA modifier requires patient status code 20



Partial Hospitalization/ Mental Health Edits

Edit # Description

29 Partial hospitalization service for non-mental health diagnosis

30 Insufficient services on day of partial hospitalization

35 Only Mental Health educational and training services provided

46 Partial hospitalization condition code 41 not approved for type of bill

80 Mental health code not approved for partial hospitalization program

81 Mental health service not payable outside the partial hospitalization

program

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Partial Hospitalization/Observation/Mental Health Processing Rules

• Special processing rules 1) Per diem partial hospitalization level I or level II are paid when the condition code,

bill type and HCPCS fall within the partial hospitalization guidelines. (Condition code

41 = partial hospitalization Bill type = 13x(Hospital Outpatient) or 76x(Community

Mental Health Center). HCPCS = codes identified in Appendix N of the I/OCE

specifications, list A and B. Also see appendix C-a. All partial hospitalization

services are packaged on the day. If multiple days on the claim represent partial

hospitalization services, multiple APCs are paid. If less than the minimum allowed

services(for partial hospitalization) are provided the partial hospitalization is denied.

Mental health services which are not approved for partial hospitalization are not

allowed on the partial hospitalization claim (the claim will RTP).

2) 2) Mental health services provided outside of the partial hospitalization are allowed

up to the Cap which is equal to the level II partial hospitalization. If services exceed

the cap, a composite APC is assigned to one service and the others are packaged

(changed to status indicator = N). Note, claims with codes that are not approved

outside of partial hospitalization will be returned to the provider when submitted

without condition code 41 indicating partial hospitalization. This rule establishes a

maximum payment rate (Cap) for mental health services regardless of partial

hospitalization status. The Cap is equal to the payment rate for the level II mental

health partial hospitalization rate (APC=176 for bill type 13x-Hospital Outpatient and

APC 173 for bill type 76x-Community Mental Health Center.) ©Verisk Health, Inc. All Rights Reserved


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There are special provisions for paying for observation under OPPS. CMS has developed lists for

covered services and the requirements which must be met for services to be covered. There are also

lists of services which are not covered for partial hospitalization. Please see Appendix K in the I/OCE

specifications and the Claims Processing Manual 100-04, Chapter 4 (Part B Hospital including

Inpatient Part B and OPPS) Section 290 – Outpatient Partial Hospitalizations Services for complete

details.

• #44 Observation revenue code on line item with non-observation HCPCS code.

• #53 Codes G0378 and G0379 only allowed with bill type 13x or 85x

• #57 Composite E/M condition not met for observation and line item date for code G0378 is 1/1

• #58 G0379 only allowed with G0378


7) Observation is always packaged, not paid separately. It may be paid under the extended assessment and

management composites and is only covered for bill types 13x(Hospital Outpatient) and 85x(Critical Access

Hospital). For Medicare, observation is reported with HCPCS code G0378. There are two levels of extended

assessment and management. Level I, APC 8002, requires a level 5 E&M (new or established patient) or a direct

referral for observation) on the same day or day before admission for observation. Level II, APC 8003, requires a

level 4 or 5 Emergency Room E&M, Critical Care or Level 5 Emergency Room in type B emergency department

on the same day or day before admission for observation. Also see Appendix K.

8) Direct referral for observation may be packaged into other services: extended assessment and management,

Status T, V or critical care or may be processed as a medical visit.


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Coverage Edits and Processing Rules

Edit # Description

9 Non-covered under any Medicare outpatient benefit, for reasons other

than statutory exclusion

10 Service submitted for denial (condition code 21)

11 Service submitted for FI/MAC review (condition code 20)

12 Questionable covered service

27 Only incidental services reported

28 Code not recognized by Medicare for outpatient claims; alternate

code for same service may be available



Coverage Edits and Processing Rules Continued

Edit # Description

47 Service is not separately payable

50 Non-covered under any Medicare outpatient benefit, based on

statutory exclusion

55 Not reportable for site of service

61 Service can only be billed to the DMERC

62 Code not recognized by OPPS; alternate code for same service

may be available

66 Code requires manual pricing

72 Service not billable to the FI/MAC

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Coverage Edits and Processing Rules Continued


10) Wound Care Services may be paid under the Physician Fee Schedule or paid an APC depending

on the circumstances. Wound care services fall into the “sometimes therapy” services. When

submitted with therapy modifiers (GO, GN or GP) or when reported with therapy revenue codes (42x,

43x or 44x) these services are paid under the Medicare Physician Fee Schedule. Otherwise, these

services are paid by APC under OPPS.

22) Skin substitutes are packaged when they are not submitted with skin substitute application

procedures. They are paid separately with the standard APC when provided in conjunction with a skin

substitute grafting procedure.

16) Medicare managed care beneficiaries are not subject to line level deductibles.

19) Deductibles and co-insurance is waived for some preventive services. Deductibles are waived for

any code in the surgical CPT range (10000-69999) when modifier PT is present on another code in the

surgical range on the same day.

17) For bill types 81x and 82x (hospice) codes with status indicator M will be changed to status

indicator A when the revenue code is 657. ©Verisk Health, Inc. All Rights Reserved



Approval Edits

Edit # Description

67 Service provided prior to FDA approval

68 Service provided prior to date of National Coverage

Determination (NCD) approval

69 Service provided outside approval period

83 Service provided on or after effective date of NCD non-coverage

3/24/2014

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Relationship Edits and Processing Rules

Edit # Description

38 Inconsistency between implanted device or administered

substance and implantation or associated procedure

71 Claim lacks required device code.

73 Incorrect billing of blood and blood products

77 Claim lacks allowed procedure code

78 Claim lacks required radiolabeled product



Relationship Edits and Processing Rules Continued

Edit # Description

75 Incorrect billing of modifier FB or FC

82 Charge exceeds token charge ($1.01)

84 Claim lacks required primary code

85 Claim lacks required device code or required procedure code

3/24/2014

19


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• Special processing rules

6) A device (or devices) are required for the performance of some procedures. When the procedure is

submitted without a device, the claim is RTP (edit 71, for example). However, sometimes the procedure may

be discontinued prior to insertion of the device (modifier 52, 73 or 74). When one of these modifiers is

present on the procedure line, the claim will not be RTP for the device.

9) Please see Appendix J of the I/OCE specification for more details about this rule. In general, blood

processing and storage requires two lines; one with a 39x (blood administration, processing and storage)

and one with 38x (blood and blood components). There are many nuances to billing for blood and blood

administration. The American Red Cross has a lot of good information on this subject.

http://www.redcrossblood.org/hospitals/educational-resources/reimbursement

11) When an implantable device is provided at no charge to the provider, modifier FB must be appended.

When a device is provided at a discount, modifier FC must be appended. When one of these circumstances

occur, the APC will be reduced. If both FB and FC modifiers are submitted the service will be processed as if

only modifier FB were present. This is a general overview of this special rule. Please see the I/OCE

specifications for more details.

15) Medicare requires a radiolabeled product when a nuclear medicine procedure is performed. If the

radiolabeled product is not on the claim, it will RTP. Sometimes a patient may have a nuclear medicine

procedure along with a radiopharmaceutical one day and may return for another nuclear medicine procedure

later in the week. Medicare provides directions for how to handle these situations. Please see the Claims

Processing Manual 100-04, Chapter 4, Section 200.8 for more details. http://www.cms.gov/Regulations-and-

Guidance/Guidance/Manuals/Downloads/clm104c04.pdf



38



20) Special processing rule 20 (edit 84) concerns add-on codes. Claims with

add-on code 33225 will be returned to the provider if not submitted with a

primary code. In addition, psychiatric add-on codes 90785, 90833, 90836 or

90838 will be returned to the provider when submitted on a partial

hospitalization claim (condition code 41) without a primary code.

21) When a prosthesis is present without a telescopic lens (or vice versa) the

claim will be RTP unless the procedure was discontinued (modifier 52, 73 or

74).






http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c04.pdf






3/24/2014

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Final Composite Packaging

• What is a composite?

A composite is a grouping of services which are bundled or packaged into a single item for

payment purposes. Many procedures/services which are packaged into composites have SI=

Q3. The primary code for the group is assigned the composite APC and the other services which

make up the composite are assigned SI=N. Terminated procedures (modifier 52 or 73) are not

included in composites. When the composite criteria is not met, the standard APC would apply.

• Composites are located in the I/OCE Specification in Appendix K.

• Composites include:

• LDR (low dose radiation) prostate brachytherapy

• Electrophysiology/ablation

• Extended Assessment and Management

• Separate Direct Referral

• Critical Care

• Cardioverter Defibrillator and Pacing Electrode

• Multiple Imaging Composites

• Ultrasound

• CT/CTA with and without contrast

• MRI and MRA with and without contrast


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