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Know the Difference: Medicare Rejections, Denials, Appeals, and Reopenings

Know the Difference: Medicare Rejections Denials, Appeals, and Reopenings

Ideally, claims submitted to Medicare are always entered and processed correctly and then paid on time according to the Medicare fee schedule. But since we live in the real world, where mistakes can and do happen at any point in the billing process, here are four tips to help you identify and correct billing errors on Medicare claims.

Know the Difference between a Rejection and a Denial

Let’s face it: rejections and denials don’t sound all that different. In fact, if you look up “denial” in a thesaurus, “rejection” is listed among the acceptable synonyms. But in Medicare parlance, the two words mean different things.

A claim that is rejected is “unprocessable,” which according to Medicare Administrative Contractor WPS-GHA means, “Any claim with incomplete or missing required information or any claim that contains complete and necessary information; however, the information provided is invalid. Such information may either be required for all claims or required conditionally.”

The following are common reasons claims are rejected as unprocessable according to WPS-GHA:

  • Invalid/missing rendering physician
  • Invalid/missing modifier
  • Missing referring/attending physician
  • Missing Clinical Laboratory Improvement Act (CLIA) number
  • Missing address of facility
  • Medicare Secondary Payer (MSP) information
  • Dates of charges missing (a quantity issue)
  • Health Insurance Claim Number (HICN) not entitled
  • Invalid/procedure modifier
  • Truncated diagnosis code
  • Invalid/incorrect diagnosis code
  • Missing initial date of treatment
  • Physician Assistant, Nurse Practitioner, or Clinic Nurse Specialist is not associated with the billing provider

A claim that is denied contains information that was complete and valid enough to process the claim but was not paid or applied to the beneficiary’s deductible and coinsurance because of Medicare policies or issues with the information that was provided. For instance, the following are common reasons claims are denied according to WPS-GHA:

  • The claim does not support medical necessity.
  • The claim has Payer/Contractor issues, such as the patient is enrolled in a Medicare Advantage Plan, the patient was in a Skilled Nursing Facility (SNF) on the date of service, or the patient has another insurance that is primary to Medicare.
  • The expenses were incurred before or after the beneficiary was covered by Medicare.
  • The claim has provider number issues, such as an incorrect NPI, employer identification number, or facility address.
  • Add-on codes were billed when the same physician did not perform and bill the primary code.
  • The claim is a duplicate.

Know How to Fix Rejections

Claims rejected as unprocessable cannot be appealed and instead must be resubmitted with the corrected information. The rejected claim will appeal on the remittance advice with a remittance advice code of MA130, along with an additional remark code identifying what must be corrected before resubmitting the claim.

Know How to Fix Denials

Denied claims also will appear on the remittance advice with remark and reason codes to help you determine your next steps. When a claim is denied because the information submitted was incorrect, often the claim can be reopened using a Clerical Error Reopening (CER).

CERs can be used to fix errors resulting from human or mechanical errors on the part of the party or the contractor. CERs would not be appropriate, however, for claims that have not been processed or claims that have been rejected as unprocessable. According to WPS-GHA, the following types of errors can be corrected as CERs:

  • Increase number of services or units (without an increase in the billed amount)
  • Add/Change/Delete modifiers
  • Procedure Codes
  • Place of service
  • Add or change a diagnosis
  • Billed amounts (without an increase in the number of unit billed)
  • Change Rendering Provider National Provider Identifier (NPI)
  • Date of service. The date of service change must be within the same year.

CERs may be requested up to one year from the receipt of the initial Remittance Notice.

Claims denied for reasons that cannot be addressed with a CER can be appealed. All appeals must be made in writing, and there are five appeal levels a provider can pursue:

  • Level 1 – Redetermination by a Medicare Administrative Contractor (MAC)
  • Level 2 – Reconsideration by a Qualified Independent Contractor (QIC)
  • Level 3 – Decision by Office of Medicare Hearings and Appeals (OMHA)
  • Level 4 – Review by the Medicare Appeals Council (Council)
  • Level 5 – Judicial review in U.S. District Court

The first stage of the appeal process, requesting a redetermination, must be done within 120 days from the date of receipt of the Electronic Remittance Advice (ERA) or Standard Paper Remittance Advice (SPR) that lists the initial determination.

Be Aware of Timely Filing Limits

There’s one final type of denial for which there is no recourse: when the claim is submitted beyond the filing limit. Based on provisions in the 2010 Affordable Care Act, providers must submit claims within one calendar year of the date of service. According to WPS-GHA, Medicare Contractors deny all claims submitted after the timely file limit has expired, and those determinations cannot be appealed. In rare cases an exception may be made if the provider can prove that a Medicare representative somehow caused the delay. In those cases, providers can request a waiver of timely filing, along with supporting documentation, at the time the claim is submitted.

While other payers have their own processes for identifying and correcting medical billing errors, becoming familiar with Medicare guidelines will provide a broader understanding of the types of errors that can occur and how to correct them. Having this information can also help you implement processes to minimize errors in the first place.

For more information, review the following resources about identifying and fixing problems with Medicare claims:

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Charity Singleton Craig

Charity Singleton Craig is a freelance writer and editor who provides communications and marketing services for CIPROMS. She is responsible for creating, editing, and managing all content, design, and interaction on the company website and social media channels in order to promote CIPROMS as a thought leader in healthcare billing and management.

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