Part B Medicare Fraud to Bypass Medicare Correct Coding Edits

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In January 1996 the Centers for Medicare and Medicaid Services began the National Correct Coding Initiative (NCCI), an automated medical claim review program. This initiative was developed to prevent improper payment by Medicare Part B for companion services on a single service date, when the services were deemed unlikely to reflect true and valid separate beneficiary encounters or medial procedures. Accurate coding and reporting of services by physicians is a critical aspect of assuring proper payments.

The CCI claim edits are procedure code pairs which are unlikely to be valid based on beneficiary criteria (i.e. gender-restricted services) or clinically-impossible services (i.e. two distinct surgical procedures on the same anatomic site on the same encounter). The NCCI promotes correct coding to assure appropriate payments for Medicare Part B services. NCCI software recognizes code pairs from claims which are separated and sorted into two groups; the software then selects a primary code from the pair and approves payment only for that service. The intent of this program is to save the Medicare program payments for minor medical services that are properly components of a primary service, rendered during the identical encounter.

The Office of Inspector General (OIG) published an analysis of the use of modifiers in claim submission which resulted in enhanced provider payments by bypassing these NCCI code separations. the modifiers were developed to force payment for independent services, which the physician attests are separate and mutually exclusive. The added service would qualify for added payment as a different surgery, a different anatomic site or organ, a different lesion, or a separate injury, but critically addressed on the identical patient encounter.

The OIG report highlighted the frequent submission of a particular modifier (modifier 59), which is submitted by providers to seek added payment for separate services at the same encounter. In the course of its audit, the OIG found that medical record evidence supporting modifier 59 was absent or deficient in 40% of randomly-selected patient records. Such documentation evidence in the patient record is critical to assuring highest quality of care and medical outcomes. The absence of fastidious and careful medical record documentation is a major quality issue impacting clinical outcomes and is a potential indicator of Part B Medicare fraud.

Continued scrutiny and surveillance of inappropriate service unbundling to bypass claim payment edits will be critical to the fiscal health of the Medicare entitlement.