October 1996 Bulletin

Medicare increases coding detection

Looks for unbundling or splitting of CPT codes

The second phase of Medicare's new Correct Coding Initiative (CCI), which is expected to be released soon, will add 16,000 more code edits or mutually exclusive code pairs, designed to detect "inappropriate" coding. The code edits or pairs represent services or procedures that, based on either the CPT definition or standard medical practice, would not or could not be reasonably performed at the same session by the same provider on the same patient.

Medicare launched the program to detect unbundling or splitting of CPT codes in January with 83,000 code edits. The edits are incorporated into the claims processing systems used by Medicare carriers to determine payments to physicians.

Code editing software is used extensively by private payers, other federal programs and state Medicaid programs. In 1995, the U.S. General Accounting Office submitted a report to Congress claiming that hundreds of millions of dollars per year could be saved if the Health Care Financing Administration (HCFA) would use commercially-available software for the Medicare program. HCFA has argued against the use of proprietary software because of the need for modification to comply with national Medicare policy.

In an effort to prevent adoption of commercial code editing software, HCFA contracted with AdminaStar Federal, the Medicare carrier for Indiana, to develop its own list of code edits. The code combinations were based on review of CPT code descriptors, CPT coding instructions and guidelines, local Medicare carrier and national edits and Medicare billing history.

In March 1995, the specialty societies included in the American Medical Association's CPT Advisory Committee (including the Academy) were allowed to review and provide comments on AdminaStar's draft National Rebundling Policy Manual. In addition to specific comments on individual code combinations, many specialties criticized the overall quality of the product and the lack of physician involvement in developing the edits.

When HCFA announced that the code edits would be implemented on Jan. 1, dozens of specialty societies, as well as many of the state Medicare Carrier Advisory Committees, requested a six-month delay in implementation so that both physicians and carriers could be properly educated on what constitutes "correct coding." However, Congress successfully pressured HCFA officials to reject any delay, due to the possibility of significant budget savings.

HCFA has agreed to allow input from medical organizations into the further development of the CCI. The AMA appointed a new committee, the Correct Coding Policy Committee (CCPC), to work with the specialty societies to evaluate disputed edits in the first phase and the 16,000 proposed edits in the second phase. AdminaStar agreed to "regularly" review the comments it receives in 1996 and make necessary corrections to the code edits. Beginning in 1997, the edits will be reviewed and adjusted on a quarterly basis.

The Academy has actively participated in the review of the CCI through the work of the Committee on CPT and ICD Coding. The committee has sent comments to both AdminaStar and the CCPC on numerous occasions regarding many of the specific code combinations as well as general coding issues. In addition, the committee forwarded a draft copy of the Complete Global Service Data for Orthopaedic Surgery to AdminaStar. Other musculoskeletal specialty societies also have submitted comments on the code edits related to their area of expertise.

According to Blair C. Filler, MD, chairman of the Committee on CPTCoding, one of the most significant problems with the CCI is that it does not allow debridement codes (11040-11044) to be billed in addition to reduction of open fractures. Since 1993, when the codes for open (compound) fractures were deleted from CPT, HCFA had allowed debridement and fracture reduction codes to be billed separately. To help alleviate this problem, the Academy developed a CPT code proposal specifically for debridement associated with open fractures and/or dislocations. This proposal was accepted by the AMA and will be included in CPT '97.

Other issues contested by the committee are reimbursement for replacement cast application or casting when no other procedure has been performed, and reimbursement for anesthesia performed by the surgeon (other than local infiltration).

Orthopaedic surgeons who have had claims denied under the CCI should be sure to keep up with the policy updates. Because of the frequent corrections, a code edit that exists one month may be deleted the next. If a carrier denies a claim based on a deleted code edit, it must reprocess that claim and reimburse the physician. HCFA also states that the CCI does not supersede existing Medicare coding, coverage or payment policies.

Orthopaedic surgeons also are encouraged to forward their comments about disputed CCI code edits to the Academy's Committee on CPT and ICD Coding, AAOS, 6300 N. River Rd., Rosemont, Ill., 60018-4262.

Reported by Laura Nuechterlein,
policy analyst, Academy's department of health policy


Home Previous Page