CMS Provides MACs, CERT, RACs, and ZPICs with
Automatic Denial Authority for “Related claims” – REDUX

You may recall earlier this year, CMS issued a Transmittal 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 could be used to validate another claim, those claims can be considered “related.” Not long after issuing that Transmittal, CMS rescinded it. A copy of our previous summary is attached.

On August 8, 2014, CMS issued Transmittal 534, once again amending the Medicare Program Integrity Manual, Chapter 3, Section 3.2.3(A) permitting Medicare contractors to deny “related” claims. A copy is attached. That Transmittal states in part:

The MAC and ZPIC have the discretion to deny other “related” claims submitted before or after the claim in question, subject to CMS approval…. If documentation associated with one claim can be used to validate another claim, those claims may be considered “related.” Approved examples of “related” claims that may be denied as “related” are in the following situations:

  • The MAC performs post-payment review/recoupment of the admitting physician’s and/or surgeon’s Part B services. For services related to inpatient admissions that are denied because they are not appropriate for Part A payment (i.e., services could have been provided as outpatient or observation), the MAC reviews the hospital record and if the physician service was reasonable and necessary the service will be recoded to the appropriate outpatient evaluation and management service. For services where the patient’s history and physical (H&P), physician progress notes or other hospital record documentation does not support the medical necessity for performing the procedure, post-payment recoupment will occur for the performing physician’s Part B service.
  • Reserved for future approved “related” claim review situations….

Medicare Contractors must wait for CMS approval before initiating requested “related” claims review. Once CMS approval is received, the MACs must post their intent to conduct “related” claim review(s) to their websites within one month of initiation.

Recovery Auditors must utilize the review approval process outlined in their Statement of Work when performing reviews of “related” claims.

MACs, Recovery Auditors, and ZPICs are not required to request additional documentation for the “related” claims before issuing a denial of the “related” claim(s).

Medicare contractors must process appeals of “related” claim(s) denial(s) separately.

This Transmittal has an effective date of September 8, 2014.

A complete copy of the Transmittal announcing this change to the Medicare Program Integrity Manual may be found at:

If you have any questions, please feel free to contact us at the address and phone number below.