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Preventing Denials Related to Diagnosis Codes

by Published On: Mar 14, 2012

You may have noticed that services you have billed time and time again are now being denied. You may be providing medically necessary services and coding your claims using ICD codes and CPT codes that you believe are appropriate for the patient and services provided, only to have them denied by Medicare. 

These coding denials may have stemmed from your Medicare contractor’s Local Coverage Determination (LCD).

LCDs specify under what clinical circumstances a service is considered to be reasonable and necessary. Their guidance assists providers in submitting correct
claims for payment. 

Many Medicare contractors, known as Medicare Administrative Contractors (MAC), have implemented automated coverage edits in their claims processing
systems to assure that claims are only being paid for medically necessary services. 

Sometimes MACs will determine medical necessity by matching or linking ICD codes to CPT codes associated with specific services.

Coding Medicare claims can be a complex maze. Utilizing the information in LCDs can help you to navigate that maze. Many LCDs give guidance for ICD
coding when specific services are provided. 

It’s important to know when there is an LCD that applies to the services you provide. 

When a MAC does require specific ICD codes to support medical necessity, the covered ICD codes will be listed in their LCDs. For the CPT code services described in the LCD, there must be at least one of the covered ICD codes from  the LCD section, “ICD Codes that Support Medical Necessity.” It’s important to note that additional ICD codes that are not listed in the LCD, but that support medical necessity, may also be documented and coded on the claim, as long as one of the covered ICD codes from the LCD exists on the claim.

For example, a MAC may have an LCD for dysphagia services. The dysphagia LCD indicates that if you bill one or more of the following CPT codes:

  • 92526
  • 92610
  • 92611
  • 92612
  • 92613
  • 92615
  • 92616
  • 92617

Then, at least one of the following covered ICD codes must be billed to support:

  • 438.82 DYSPHAGIA CEREBROVASCULAR DISEASE
  • 464.01 ACUTE LARYNGITIS WITH OBSTRUCTION
  • 464.51 SUPRAGLOTTITIS UNSPECIFIED WITH OBSTRUCTION
  • 478.30 UNSPECIFIED PARALYSIS OF VOCAL CORDS
  • 478.31 PARTIAL UNILATERAL PARALYSIS OF VOCAL CORDS
  • 478.32 COMPLETE UNILATERAL PARALYSIS OF VOCAL CORDS
  • 478.33 PARTIAL BILATERAL PARALYSIS OF VOCAL CORDS
  • 478.34 COMPLETE BILATERAL PARALYSIS OF VOCAL CORDS
  • 478.6 EDEMA OF LARYNX
  • 507.0 PNEUMONITIS DUE TO INHALATION OF FOOD OR VOMITUS
  • 787.20 DYSPHAGIA, UNSPECIFIED
  • 787.21 DYSPHAGIA, ORAL PHASE
  • 787.22 DYSPHAGIA, OROPHARYNGEAL PHASE
  • 787.23 DYSPHAGIA, PHARYNGEAL PHASE
  • 787.24 DYSPHAGIA, PHARYNGOESOPHAGEAL PHASE
  • 787.29 OTHER DYSPHAGIA

The above listing of CPT codes and ICD codes are for illustration purposes only.
You must review any applicable LCDs from your MAC to determine if specific
ICD codes are required to support medical necessity.

Steps to take when the LCD lists covered ICD codes

When your MAC does have an LCD that lists covered ICD codes that support medical necessity, the following steps should be taken to assure that the proper diagnoses are documented in the medical record and forwarded to the billing department for claim development.

  1. Make available a printed copy of the entire LCD for reference use by clinical staff. Keep in mind that the MAC carries the expectation that as a provider of services to Medicare beneficiaries, you are knowledgeable of the contents in the LCD.

  2. Make a separate printout of the section of the LCD that indicates the CPT codes and the covered ICD codes that align with those CPT codes. Keep this listing next to the documentation stations and in the billing office. Clinicians, such as therapists, should incorporate the appropriate and applicable covered ICD codes into their documentation and billing logs.
  3. Prior to forwarding billing logs to the billing office, staff should review each billing log to assure that covered ICD codes are included.

When denials for ICD codes occur

When automated denials occur on claims for which no medical records were submitted, it’s necessary to review denial reason codes to determine if the denials are related to diagnosis codes.

Review of the online denied claims and review of the Remittance Advice (RA) will help you decipher why the service was denied.For example, your Medicare MAC might use the following Denial Reason Code to indicate a denial related to ICD coding:

55A00: Claim did not have a covered diagnosis in accordance to the National and Local Coverage Determinations (LCD/NCD)

For diagnosis-related denials, the following remark codes may be present on the Remittance Advice (RA):Diagnosis-related denials can be appealed when your documentation supports

N155: This decision was based on a Local Coverage Determination (LCD). An LCD provides a guide to assist in determining whether a particular item or service is covered. A copy of this policy is available at www.cms.gov/mcd, or if you do not
have web access, you may contact the contractor to request a copy of the LCD.
CO-50: Services not deemed a ‘medical necessity by the payer”

Diagnosis-related denials can be appealed when your documentation supports that a diagnosis from the LCD would apply to your patient’s treatment condition.

It is always preferred to have your claim paid the first time it is submitted. Assuring that covered ICD codes are included in your documentation and billing when an LCD applies will reduce your risk for automated claim denials.

For additional information, contact Jaclyn Warshauer, PT, Senior Clinical Claims Review Specialist, Aegis Therapies, jaclyn.warshauer@aegistherapies.com

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