Posts Tagged ‘CMS Guidelines’

Preparing for ICD-10: More than Review Sessions for the Coders

Monday, October 21st, 2013

CMS has already identified the expectation of at least a 10% claim rejection due to incorrect codes or codes lacking in specificity.  Besides increased claim rejections, payors are predicting increased delays in processing care authorizations, slowing cash flow, and coding backlogs.

To guard against being one or several of those statistics, home health and hospice agencies must prepare now.  Agencies must plan for education and training of coders, billers, and managers, updating software and hardware, updating forms, processes, policies and procedures, and related consulting costs.

Leaders must prepare for a decline in clinical and coding productivity as well as the need for data conversion and design of new tools and resources. On the positive side, conversion to ICD-10-CM affords the agency leaders the opportunity  to conduct a comprehensive review of agency operations and to determine if contracting with an outside third party Coding agency is the best way to handle much of ICD-10-CM.

Leaders must look at who and what will be impacted at their agency and devise a strong plan.  Timelines for assessing gaps, devising interventions and tools as well as testing those items must be included in the plan.

Clinical leaders must look at what documentation may need to be expanded. What forms and processes will be impacted?  IT managers must look at system readiness not just for 5010, but for financial and clinical data conversion, reformatting of reports, as well as compliance risks.  Billing managers must look at any claims processing changes and reconciliation processes and reports. They must look at ICD-10 implementation dates, payor readiness and the ability to run dual systems for ICD-9-CM for care delivered prior to 10/1/2014 and ICD-10-CM for care delivered on and after 10/1/2014.

CFOs must look at a budget for training, education, updating of software, clinical and coding learning curves and time additions for new coding and process implementation.  They must plan for potential cash flow delays if their claims are rejected.

CEOs and COOs must look to additional personnel needs due to increased time needed for learning and for ongoing coding requirements. They must look at training and education of, not only employees, but of subcontractors and contractors as well. They should evaluate contracting with third party coding firms and determine advantages and any disadvantages. With all of the other changes impacting the industry, many agencies are deciding coding should be completed by third party experts, such as Select Data.  Leaders must appoint managers for ICD-10-CM implementation, HIPAA HITECH risk management, preparation for the new Chronic Care Management models; ACOs, Patient Centered Medical Homes, Transitional Care programs and all the program outcomes anticipated. The leaders must evaluate their internal expertise and determine if external consulting or service delivery, is needed.


Let’s look at one of the first groups to be considered for education: the intake team.

Does the intake process need to be expanded? Do the forms need to be expanded to accommodate the additional documentation required for the increased specificity necessary for ICD-10.  What are the most common diagnoses treated by the agency? What will be the needed documentation to justify assignment of those codes?

Does the team have a working knowledge of ICD-10-PCS so they may identify procedures performed in the acute care setting?

Who will be responsible for modifying forms and tools?  Does your process and/or software system require the intake team to assign a preliminary primary diagnosis? Who will be responsible for ICD-10 education for this team?


Direct Care Providers, whether they are employees or contractors should have an overview of OASIS C1 and the changes implemented.  They should have a review, if necessary, as to the meaning of the questions, the timeframes to be considered, and the resulting documentation necessary. In addition, they should have a thorough understanding of the general differences between ICD-9-CM and ICD-10-CM and the detailed requirements of ICD-10-CM.  The coding specificity depends on very detailed documentation. Presently, clinical documentation is under scrutiny by auditors. I am amazed when we perform audits for agencies throughout the country, the level of insufficient documentation present and the exposure of an agency if a RAC audit would occur.

At the very least, agencies should identify the top 20 diagnoses utilized at their firm, and identify the new codes, including the combination codes identified with each. Examples of combination codes include:

E08.21 Diabetes due to underlying condition with diabetic neuropathy
E08.341 DM due to underlying condition with severe non-proliferative diabetic retinopathy with macular edema
E08.22 DM due to an underlying condition with diabetic chronic kidney disease
E09.52  Drug/chemically induced DM with diabetic peripheral angiopathy with gangrene
E11.41 Type 2 DM with mononeuropathy

Review the agency assessment  for content detail  capability:

Does the assessment have laterality?
Does it have the depth of content and detail needed to support the potential diagnoses?
If the assessment was thoroughly completed, would it withstand a RAC auditor’s review?
What forms and tools will require modification? What about the careplan?
Should the Visit/Progress note be modified?
Are these notes outcomes driven?
What about Patient Teaching Tools?  Do they encourage patient self- engagement?
If the clinicians already have difficulty adequately documenting conditions, do you have a strategy for change?


Because the new ICD-10-CM code set is expected to cause a 10% rejection of all claims due to coding error and lack of specificity, the billing team should have a strong process in place to handle claim rejections and denials.

Does your Clinical team routinely audit records?
Does your Coding team have outside audits performed on their work product so you are reassured of the accuracy of the coding?Does your billing team have internal audits performed to evaluate process effectiveness, as well as claim accuracy and timely billing?

Obviously, order centric and coding centric processes should be in place to reduce denials. Assignment of codes must be predicated on specific documentation that has been verified by the coding specialists as a part of the client record.


ICD-10-CM has meant a HIPAA Version 5010 transition prerequisite.  It also means clinical and billing software system updates and processes. The impact to IT goes beyond the mere increase from 5 to 7 characters. It also means that the IT must be prepared for a dual system to be in place to handle ICD-9-CM claims for Starts of Care prior to 10/1/2014 and for care initiated on or after 10/1/2014.

Is your software vendor evaluating their integrated OASIS assessment tool to be certain it meets all the specificity requirements necessitated by ICD-10-CM?

From the simplest of needs: does it have laterality that allows for designation of both primary diabetic types, the three secondary types, and provide detail choices to support all types and conditions?


Have you contacted the payors for their planned readiness to test their system?
Have you communicated with your Clearinghouse?  We work with Emdeon and they have a test environment available to accept the new codes on claims. This environment will let us know rejection and acceptance of claims for specific payors.

CMS stated the new Grouper will be available in February, 2014. Then we will have a better understanding of the HHRG and case mix diagnoses of the future. One hundred seventy (170) casemix diagnoses have been proposed for removal thus far.


Well trained coding specialists improve your ability to drop high level clean claims coded to the highest level of specificity.  Well versed coding specialists can improve compliance, aid in OASIS accuracy, and improve likelihood that paid revenue remains retained revenue.

Agencies are finding that the specificity requirements of ICD-10-CM are necessitating updated courses in Anatomy, Physiology, Pathophysiology, Diagnostics, Pharmacology totaling around 50 hours. Agencies know the coding specialists will also need specific training of ICD-10-CM and should allow around 20+ hours.

Additionally, agencies must allow time for coding practice and parallel coding so the specialists see the differences and can practice for the future. Select Data will begin this process Q1 2014.


A smooth transition to ICD-10-CM with clean claims means effective planning. Your ICD-10-CM Project Team (consisting of members from all departments) should have by now completed the gap analysis for all departments, have started the coder training updates, and have  sent out the first letters to the payors requesting their ICD-10-CM status. You have or will soon have identified processes, tools, and forms impacted by ICD-10-CM and refined your project plan.

Operations should be developing the needed Operational solutions, planning, and preparing for the ongoing training for all departments. Next comes the specific strategies for implementation.

Are you on schedule? We have less than a year. Education and documentation excellence is critical.

Your cash flow and then retention of dollars derived could ultimately depend upon the clinical documentation and the quality of education and overall preparation for this major undertaking.

170 Codes Identified to be Removed From the Case-Mix List Per the Proposed Rule

Wednesday, October 9th, 2013

No one will be surprised that GERD is on the list. However, remember, coding specialists must continue to use the codes, if appropriate. However, the codes will not garner case mix points if the proposed rule list is finalized.


Blood Disorders

282.42,  282.5,  282.62,  282.64,  282.69




250.20,   250.21,  250.22,  250.23,  250.30,  250.31,  250.32,  250.33

Gastrointestinal Disorders



530.4,    530.7,    530.81,  530.82

531.00,  531.01,  531.10,  531.11,  531.20,  531.21,  531.31, 531.40

531.41,  531.50,  531.51,  531.60,  531.61,  531.71,  531.91


532.00,  532.01,  532.10,  532.11,  532.20,  532.21,  532.31,  532.40

532.41,  532.50,  532.51,  332.60   532.61,  532.71,  532.91


533.00,  533.01,  533.10,  533.11,  533.20,  533.21,  533.31,  533.40

533.41,  533.50,  533.51,  533.60,  533.61,  533.71,  533.91


534.00,  534.01,  534.10,  534.11,  534.20,  534.21,  534.31,  534.40

534.41,  534.50,  534.51,  534.60,  534.61,  534.71,  534.91


535.01,  535.11,  535.21,  535.31,  535.41,  535.51,  535.61,  535.71


537.3,    537.4,     537.6,    537.83,  537.84


540.0,    540.1,     540.9





560.0,    560.1,      560.2,    560.81,  560.89,    560.9


562.02   562.03,    562.12,  560.13

567.0,    567.1,      567.21,  567.22,  567.23,    567.29

567.31,  567.38,    567.81,  567.82-89              567.9



569.3,    569.43,    569.83,  569.85,   569.86

572.0,    572.1

574.00,  574.01,    574.10,  574.11,   574.21,  574.30,  574.31,  574.41,

574.51,  574.60,    574.61,  574.71,   574.80,  574.81,  574.91

575.0,    575.2,      575.3,    575.4

576.1,    576.2,      576.3


578.0,    578.9

Heart Disease




Neuro 1



333.84,  333.93,   333.94

Pulmonary Disorders


Psych 2


Skin 1


998.11,   998.12


Skin 2


HIPPS CODES FOR MEDICARE ADVANTAGE CLAIMS: Effective July 1, 2013 and HIPAA: THE AGENCY/COPIER/ PRINTER, A Seldom Thought of Compliance Risk

Wednesday, July 10th, 2013

Home Health Agencies will now be required to include a Health Insurance Prospective Payment System (HIPPS) Code on Medicare Advantage claims. CMS has had no communication with providers regarding this latest requirement. It is thought that CMS expected the plan payors to provide the communication and education. Many agencies report that notification has not occurred.

The edit for this new requirement will be activated in September, but CMS states agencies are expected to comply with the regulation July 1, 2013. Presently, there will be no rejection of claims without the HIPPS codes nor is any payment delay anticipated.

Mary Carr at NAHC was quoted as stating, providers learned of this new regulation within the last two weeks. She has seen one provider notification and it was dated June 14, 2013. That allowed less than two weeks preparation time

Agency leaders are speculating useage of the new information. Others state it is fairly clear. CMS will now be able to compare data between Medicare Advantage claims and Medicare fee for services claims. Visit numbers, disciplines utilized, diagnoses, and hospital readmission rates can now be compared. Is there true cost savings to CMS using the MA route for care? Quality comparisons with outcomes should be reviewed and compared.

HIPPA: A Seldom Thought of Compliance Risk

Watch out for those fax/printer/copier machines and their ability to retain PHI.

Agencies are worried about HIPAA and usually, when mitigating risk, they look at social media, encrypted email, and generally speaking how they are sending PHI.

The risks are high. In March, 2013, the Us Department of Health and Human Services agreed to a settlement of $1.5 million with Blue Cross and Blue Shield of Tennessee regarding alleged violations of Privacy and Security Rules under the HITECH Breach Notification Rule. This action involved unencrypted hard drives stolen with over a million Social Security numbers with birth dates. This was the first enforcement under HITECH and no doubt more will follow.

What about other areas of vulnerability?  One of the most overlooked risk areas in an office is the copier. Look at your digital fax/printer/copiers. They can store tremendous amounts of PHI. Per many analysts, easily 80% of all such machines have at least one hard drive.

HIPAA requires PHI be protected and secured from inappropriate access. If you purchase a new printer or copier, request a data security overwrite kit. This kit scrubs the hard drive, replacing the driver binary code (ones and zeros) with all zeros, thus erasing documents from the memory. If ever audited, your agency may be asked for proof of purchase of an overwrite kit and its functions, as well as the accompanying agency policies and procedures.

If your present equipment has no such kit, create your policy and procedures identifying how your agency will protect the data on the machines.  Connecting printers to an internet accessible network may leave data vulnerable. If you will be trading in or selling present faxes, printers, scanners, or copiers, be certain the buyer/dealer gives you a certificate/letter of sanitization that will occur with the machine. Not securing the certificate means the entity selling the machine may run the risk of PHI breach. It could be significant depending on the data stored.

The Secretary of Health and Human Services can now impose, pursuant to HIPAA HITECH, penalties ranging from $100.00- $50,000 for low category violations. Higher categories can bring penalties of $25,000-$1.5 million per calendar year.

You must pay attention to this little thought of vulnerable HIPAA risk area.

Billing Compliance, Q Codes, Edits and Audits: Compliance in the Home Health Industry an Update

Tuesday, May 7th, 2013

CMS revised the requirements on “April 19, 2013 to delete “and indicating whether services were added to the HH plan of care by a physician who did not certify the plan of care” from the Provider Action Needed” section of MLN Matters number MM8136 Revised.

Implementation date remains: July 1, 2013

Please see the following updated article.

Statistical Data

Every time an OASIS is submitted to the state, portions of it may be parsed out to state, regional, and Federal groups such as the HEAT, MAC review groups, and Federal special projects in the DOJ and FBI. That means that when a review letter arrives, it may already be too late.

Each time a claim is submitted, it is being reviewed using sophisticated predictive analytics that review a number of indicators including: frequencies, certain HIPPS codes and now Q codes. Is your billing company or department aggressively assisting to protect you?

Each time a diagnosis code is assigned to a clinical record and attached to that patient claim, an audit can be triggered. Is your coding department aggressively assisting to protect you?

Alerts in billing, Q Codes, and with ICD-10 looming, are you prepared?

The Q codes

Recently, CMS issued Change Request 8136 that requests new data reporting requirements for Home Health Prospective Payment System (HH PPS) claims. It is to go effect July 1, 2013, Home Health Agencies (HHAs) must start reporting new codes indicating:

The location where services were provided

The location where services were provided should be reported along with the first billable visit in a home health PPS episode with one of three Q codes: • Small clarification in the wording, but it can mean a BIG difference. Q Codes will be required to identify where the services were PROVIDED not necessarily the place of residence. Note the difference in wording.

1.  Q5001  – Hospice oe Home Health Provided in a patient’s home/residence

2.  Q5002 – Hospice or Home Health Provided in an Assisted Living Facility

3.  Q5009 – Hospice or Home Health Provided in a place not otherwise specified (NO)

Further, changes in the location during an episode must be reported on the corresponding line to the first visit in the new location.

CMS’ requirement to report new Q codes and modifiers could cause claims denials and rejections for your agency. Industry leaders predict CMS auditors will use these new codes to target duplicate services for patients in an ALF.

The patient’s residence is where he or she makes their home. “This may be his or her own dwelling, an apartment, a relative’s home, a home for the aged, or some other type of institution. Refer to for the entire update from CMS MLN.

These codes also can interrupt productivity if your agency does not have a process in place by July 1 for documenting these services and supplying your billing specialists with the necessary information. Select Data has been providing billing services to the home health and hospice industry for over 22 years. If we can assist, call us.

On another matter…EDITS

Per CMS, in a report released a while ago, the NHIC Corp Medical Review Department reviewed claims selected by three service- specific home health edits between July1 and December 31, 2012. The alert was entitled Home Health Prepay Results. These reviews have found continuing high error rates. The three edits are:

·         5ACO1- billing of the HHRGs 3AFK

·         5ACO2- billing the HHRG 1AFK

·         5ACO3- billing 5-7 visits for full episode

52% of the claims were denied. The top denial reason was 55H3A-skilled observation was not reasonable and necessary. This was the denial reason for 56% of the denials. They cite “CMS Publication 100-02, Medicare Benefit Policy Manual Chapter 7, Section explains that nursing services for observation are covered when the patient’s condition is changeable. Once the condition stabilizes, the nursing services are no longer medically necessary.”

The next highest denial reason stated CMS. was no physician certification (about 15% of denied claims). “The face to face encounter must be documented by the certifying physician.” They referred to Publication 100-02, MBPM, Chapter 7, Section 30.5.1.

“Documentation not supporting the homebound status was the reason for denial in 14% of the denied claims. Reason code 55H2B is appended to the claim when the documentation does not support the patient is homebound.” This was the third most common denial. Homebound status should be one of the first things reviewed by the clinician and the first item reviewed by any coding specialist. If there is insufficient documentation to support homebound status or medical necessity, a coding specialist should not be coding this record as it does not meet Home Health regulations right from the start. Is this a requirement of your coding specialists? It is a standard at Select Data.

The fourth most frequent denial was “physician orders not signed timely.” Another reason found as a denial reason was that” therapy services were determined to not require a therapist.”

Agencies should be auditing records routinely for these errors as well as the completeness of the record. Consider developing or using a chart audit tool. A sample of such a tool can be found on the Select Data website. That tool may be modified for completeness to meet your agency specific needs.

The NHIC Corp Medical Review Department review of specific claims are not the only claims being reviewed. Palmetto GBA recently announced new medical prepay audits based on certain HIPPS codes that have the highest denial rates. While PGBA internally identified the top 20 HIPPS groupings that have the highest denial rate. Here are the two under specific review:

  • 2CGK*
  • 1BGP*

As an agency provider, you should be prepared for possible ADRs on claims with these HIPPS. When an End of Episode claim is submitted using one of the two above HIPPS groupings, Palmetto GBA may place the claims into ADR status and you will be required to submit additional documentation from the chart in order for a determination to be made on the claim either being paid or denied. If you have limited QA resources, these are the charts you may want to focus on.

PECOS is placed on Delay per CMS

Due to technical issues, implementation of the Phase 2 ordering and referring denial edits is being delayed.   These edits would have checked certain claims for an approved or validly opted-out physician or non-physician who is an eligible specialty type with a valid individual National Provider Identifier (NPI). If this information were missing or incorrect, the following types of claims would deny:
• Claims from laboratories for ordered tests;
• Claims from imaging centers for ordered imaging procedures; and
• Claims from suppliers of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) for ordered DMEPOS.
• Claims from Part A Home Health Agencies (HHA)

CMS will advise you of the new implementation date in the near future. In the interim, informational edits will continue to be sent for those claims that would have been denied had the edits been in place.

Predictive Analytics for operations and clinical data

In home health care, predictive models are being used to exploit patterns found in historical and transactional data to identify risks and opportunities. The present models capture relationships among many factors to allow assessment of risk or potential risk associated with a particular set of conditions. The relationships should guide clinicians in their care plan decisions as well as care delivery. There are thousands of potential OASIS and coding combinations. Because of the patient profiles and patterns retained over the years, comparisons can be made readily. Add HHRGs and service information to the OASIS and diagnostic data and CMS can gather very significant data regarding your agency care delivery and outcomes. MANY analytic filters are utilized to screen the data.

The initial round of filters are termed MUEs (Medically Unbelievable Edits). These edits are the first predictors of fraud and can alert the Z-PICs of agencies that should be monitored. Auditors may monitor an agency for years, gathering data, analyzing data and patterns, and reviewing payments. The agency profile is completed.

This data and these pre-probe edits allow Z-PICs to have plenty of time to analyze data and monitor agency behaviors so that when they send a letter, they have already completed their initial audit and arrived at a solid conclusion.

Since experts state that 75-85% of all agencies are acutely unaware of business operations data and do not have necessary compliance rules built into or a part of their billing practices to protect them from wrongful claim submission. Agencies are at risk so questions must be asked. Who is auditing your clinical records and care, the ICD-9 coding, and the claim submission? Who is monitoring your data? Do you have clinical and operational benchmarks? In 2009, billing errors were found to have doubled. Be proactive now, because if your compliance rules and program are weak, you could be hearing from the Z-PICs soon.

If you are considering third party ICD-9 (soon to be ICD-10) coding or billing specialty services, consider Select Data, the Gold Standard in these services for over 20 years.  Call us at1.800.332.0555.



Good Coding: Helps Your Agency Keep Its Revenue Bad Coding: Can Mean You Lose Your Revenue

Wednesday, February 20th, 2013

PPS has always meant that “close enough” isn’t good enough. A digit off can be costly. Coding to the highest level of specificity can be complex and confusing. CMS has published Coding Guidelines and the Coding Clinic remains the source document for any coding questions. Agencies have hired coders. Yet still, many agency administrators pause when asked, “Are you leaving dollars on the table?” Most acknowledge they believe their coding may be costing them at least $200-$400 per episode.  Why continue to lose dollars?

Agencies have usually decided to complete their coding themselves. They have hired coders, certified or otherwise. Some coders are routinely reviewed and audited, most are not. Lessen the worry regarding dollar loss and the quality of your agency coding by instilling specific processes.

Consider a third party audit. Quality third party coding firms should have quarterly internal audits and annual external audits completed in their firms. So should you. Yes, the audits are costly, but so is $200-$400 per episode of care delivered

You should take a close look at the coding completed in your agency. Look at the use of case-mix diagnoses and at comorbidities. Down coding can be as costly as upcoding, just in different regulatory ways, if it brings on an audit. Have your ADRs increased? Do you know the number of codes used routinely in your firm? Do you know the top 10 diagnoses assigned?  How many of the present 16,000 codes are your coders using? How much will preparing for ICD-10 cost you?  Is a plan in place now? How strong is your coder in anatomy, physiology, diagnostics, and pharmacology? How many of the 68,000 codes will they use?

Experts know that much training is required for ICD-10. If you do not properly prepare, how much more will it cost you? Perhaps it is time to consider a third party coding specialty firm.

Consider a firm that has experienced, highly credentialed coding specialists. Ask if they employ a full time coding auditor. Ask if they have weekly training sessions paid for by the coding firm to keep their coding specialists current. Ask if they have a full time Compliance Officer, a compliance committee, and have current program policies and procedures. Ask if the firms’ employees are required to annually attend corporate compliance and HIPAA inservices. Ask if the coding specialists are reviewed quarterly. Ask about internal and external audits of the coding teams’ work. Ask about their % of documented accuracy.  If the coding agency is under 97% accuracy documented by independent external audit, look elsewhere. All of the above items are costly to the coding firm but a top coding firm should be investing in quality.

And lastly, identify the coding firm’s indepth ICD-10 curriculum for their coding specialists. Also, identify their overall plan for ICD-10 implementation including their plan for parallel coding of ICD-9 and ICD-10.  Do not continue to lose dollars. Make a move now.

Susan Carmichael
Executive Vice President
Chief Compliance Officer
Select Data