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Compliance update: When a service is bundled, don’t bill the patient separately for it

Not all types of Medicare denials are created equal. In certain cases, it may be appropriate for a provider to have the patient sign an advance beneficiary notice (ABN) and recoup payment. In others, particularly bundled service situations, a practice can get in a lot of trouble by attempting to skirt around the rules and seek payment when it isn’t warranted.

Case in point: A pair of dermatologists in Toccoa, Ga., agreed in April to pay the government $1.9 million to settle claims that they violated the False Claims Act, according to the U.S. Department of Justice. The settlement focused on the doctors’ billing of E/M services, but the original complaint, filed in 2012, described a broader pattern by the pair to unbundle services and bill for them improperly to their patients and the government.

In one instance described in the complaint, Drs. Margaret Kopchick and Russell Burken required patients — “many of whom have bodies covered” in keratotic lesions — to return every two weeks to have a maximum of five lesions lasered off. That was so the practice could bill code 17110 (Destruction of benign lesions … up to 14 lesions) over and over again instead of billing code 17111 (…; 15 or more lesions) just once for removal of all of the patient’s lesions in a single encounter.

In addition, the doctors would sometimes “allow patients to have up to an additional 10 lesions removed but charge them an additional $10 per lesion,” the complaint stated. “In other words, the doctors are charging patients on top of their Medicare copayments for procedures that are already covered by their Medicare plans,” according to the complaint, which was originally filed as a whistleblower lawsuit by a former employee of the doctors.

That’s an admittedly extreme example, but practices must guard against similar types of unbundling scenarios, warns OCPS technical adviser Margie Scalley Vaught, CPC, CPC-H, CCS-P, ACS-EM, ACS-OR.

For instance, a practice should not require patients to come back for repeat trigger point injections when more than three injections are required just to allow the provider to get around the limits built into CPT code 20553 (Injection[s]; single or multiple trigger point[s], 3 or more muscles), she explains.

In both of the above cases, the bundling occurs at the CPT code level, so the rule applies to all payers including Medicare and private payers.

Don’t bill for separate graft jacket with RCR

Ortho practices should also watch for shoulder surgeons seeking to bill patients separately for arthroscopic rotator cuff grafts in addition to arthroscopic shoulder repairs, Vaught says. Application of a graft jacket has no code, and many payers don’t want to pay separately for it, she adds.

That has caused some doctors to want to bill the insurance company for the repair, then bill the patient for the reconstruction using the graft, Vaught says. That approach could get you into trouble, she explains.

“You can’t bill two codes for one service,” she says. “Payers such as Aetna and Blue Cross say, ‘we don’t care how you decide to do the repair, it’s still a 29827 (Arthroscopy, shoulder, surgical; with rotator cuff repair).’” In other words, those payers are saying the graft is included, so the doctor shouldn’t turn around and bill the patient for it, Vaught adds.

If the doctor insists on separate payment for arthroscopic reconstruction with graft jacket, “to me, the safest thing to do is bill the whole procedure as unlisted,” Vaught says. “Work with the payer to help them understand the benefits and try to get the procedure covered via unlisted code 29999.” If the payer refuses, inform the patient that the payer says the procedure is investigational and if they want it, they will have to foot the bill for the full repair, she advises.

Medicare already paid for bundled services

Medicare rules also prohibit you from billing a patient separately for a bundled service. That includes services that are bundled by National Correct Coding Initiative (CCI) edits and medically unlikely edits (MUEs). You can bill your Medicare administrative contractor (MAC) for CCI or MUE-related denials but not the patient. That rule also applies to codes that have a payment status of “B” (for bundled) in the Medicare physician fee schedule. Examples of those include spinal bone allograft codes 20930 and 20936.

Medicare says it has already paid you for a bundled service, so it’s not OK to bill the patient for the same service. For example, CMS states about MUEs that “because a denial of services due to an MUE is a coding denial, not a medical necessity denial, the presence of an Advance Beneficiary Notice of Noncoverage (ABN) shall not shift liability to the beneficiary for UOS [units of service] denied based on an MUE” (CCI coding policy manual, Chapter 1).

For certain other denial types, Medicare will permit you to issue an ABN to the patient and bill them in the event of a denial. Those include:
  • Medical necessity denials, such as when your MAC doesn’t include the patient’s diagnosis on the list of payable conditions in its local coverage determination, and
  • When a service is non-covered by law, such as E/M preventive visits or acupuncture treatments. Technically, Medicare rules don’t require an ABN before you bill a patient for non-covered services, but it’s considered a patient courtesy to inform them.
DOJ release on Toccoa dermatologist settlement
Medicare’s CCI manual