CMS Provides MACs, CERT, RACs, and ZPICs with
Automatic Denial Authority for “Related claims”
Effective March 6, 2014, CMS amended the Medicare Program Integrity Manual giving MACs, RACs, CERT contractors, and ZPICs discretion to automatically deny other “related” claims submitted before or after the primary claim in question. For instance, if documentation associated with one claim can be used to validate another claim, those claims may be considered “related.”
Below are a couple of situations where the claims could be considered “related” and, therefore, denied along with the primary claim in question:
- Inpatient Claim and Physician Claim – The inpatient claim and associated documentation was reviewed and the contractor determined that the inpatient hospital services were not reasonable and necessary. The contractor now has authority and discretion to also deny the physician claim associated with the inpatient services rendered without reviewing any additional documentation.
- Diagnostic Test Claim and Professional Component – The diagnostic test claim and associated documentation was reviewed and determined as not reasonable and necessary. The associated professional component can now also be determined not reasonable and necessary by the contractor without review of any further documentation.
The MAC, Recovery Auditor and ZPIC are not required to request additional documentation for the related claims before issuing a denial of such claims.
In making this announcement, CMS stated that additional documentation requests (“ADRs”) refer to all documentation requests associated with pre- or post-payment review. Additionally, CMS expanded the definition of “additional documentation” that may be requested by MACs, CERT contractors, RACs and ZPICs. “Additional documentation” includes medical documentation and other documents such as:
- Clinical evaluations, physician evaluations, consultations, progress notes, physician’s office records, hospital records, nursing home records, home health agency records, records from other healthcare professionals and test reports.
- Supplier/lab/ambulance notes include all documents that are submitted by suppliers, labs, and ambulance companies in support of the claim (e.g., Certificates of Medical Necessity, supplier records of a home assessment for a power wheelchair).
- Other documents include any records needed from a biller in order to conduct a review and reach a conclusion about the claim.
These examples are not an exclusive list. CMS’ expansion of contractors’ claim denial discretion could impact coverage of and payment for numerous types of services and products including physicians’ services, Skilled Nursing Facility services, Home Healthcare, Hospice services, and medical equipment rental. This change will likely result in a significant increase in the number of appeals, claims, and appellants compounding the problems created by our overburdened claims appeal system.
A complete copy of the Transmittal announcing this change to the Medicare Program Integrity Manual may be found at: