Avoiding Claim Denials Due to New Medical Codes

At the beginning of each year, we start to report the new CPT® and HCPCS Level II codes. It is extremely important to monitor payment denials due to coding errors that are a result of the new codes. Monitoring the denials allows you to identify if a particular payer is not processing the codes correctly or if you have an error in your billing/practice management system that is causing the denial.

Denial resolution is an important step in the revenue management cycle that often gets overlooked. Denials mount up until "someone" has time to review them. This is detrimental to the financial success of the practice. Unless you have dedicated staff to work denials, money is being left behind.

Most denials can be easily fixed and resubmitted for payment. Denials due to new codes can occur because the payer has not updated their system, the practice does not know how to properly use the codes, the codes are not updated correctly in the practice management system, or there is a new payment policy of which the practice is not aware.

In order to avoid these denials, follow these steps:

1. When the code changes are released, update your encounter forms/super bills and systems where codes are stored and used for claim submission.

2. Educate providers and coders on the new and revised codes and the documentation needed to support the codes.

3. Review the revised CPT® coding guidelines. These can be quickly identified because the changes are in green text in the CPT® code book. Sometimes the guidelines will change or clarify proper code selection even though the codes are not changed.

4. Update your fee schedules to include the payment rates for the new and revised codes.

5. Review the CMS National Coverage Determinations (NCD) and Local Coverage Determinations (LCD). Also review the payment policies from private insurers. These are often available on the payer’s website. This is an important step because these policies clarify code use, identify the diagnoses that support medical necessity, and provide documentation requirements.

6. Review the National Correct Coding Initiative (NCCI) edits to determine the bundling of codes.

The steps above will help you prevent denials associated with code updates but will not eliminate them completely, making denial management essential. We know that just because a code was created does not mean it will be paid. For example, the new complex chronic care coordination codes (CPT® codes 99487-99489) are not reimbursed by CMS. If the codes were submitted and denied, it is a valid denial. Although CMS does not reimburse these codes, it does not mean that other payers will not. Check with your payers each year to find out if they will reimburse the new codes and the fee schedule.

Tips for monitoring denials:

1. Review all denials. Most practice management systems allow you to run reports by payer and denial reason code. It is helpful to categorize the report to work the biggest problem first.

2. Research the denial to determine the cause. Make sure the information was submitted accurately on the claim. If the wrong codes were submitted originally, make the necessary corrections and resubmit the claim.

3. If the claim was submitted correctly and the denial is due to medical necessity, check the payment policy for the payer to determine if the patient’s diagnosis supports the policy. Also review the documentation required to support the service. If you need to file an appeal to resolve the denial, most payers require the medical record for the date of service to make the appeal determination.

Raemarie Jimenez, CPC, CPMA, CPC-I, CANPC, CRHC has over 15 years experience in the medical field. She manages the clinical development of the AAPC exams program. She oversees the development of exam content for all certification exams and exam preparation material such as study guides and practice tests. She assisted with the development of the Medical Coding Training CPC curriculum that is used by PMCC-licensed instructors and the AAPC distance learning course. E-mail her here.