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Top Five Claim Denials and Resolutions – Medical Necessity Denials

LCD/NCD Denials

The Remittance Advice will contain the following codes when this denial is appropriate.

  • CO-50, CO-57, CO-151, N-115 - Medical Necessity: An ICD-9 code(s) was submitted that is not covered under a LCD/NCD

CMS houses all information for Local Coverage or National Coverage Determinations that have been established.  Those are housed at the Medicare Coverage DatabaseExternal Website.

Resolution

Check the LCD or NCD prior to service to determine eligibility of services for patient.  If the service being performed is not covered under the LCD guidelines, we encourage you to provide your patients with an ABN prior to performing these tests.

LCD Reconsideration Process: To request changes to any existing LCD, fax clinical evidence/documentation directly to CGS through our Medical Director.

Routine Services

The Remittance Advice will contain the following codes when this denial is appropriate.

  • PR-204: This service/equipment/drug is not covered under the patient's current benefit plan
  • PR-49: These are non-covered services because this is a routine exam or screening procedure done in conjunction with a routine exam.

Resolution/Resources

  • Procedures that are submitted to CGS, which would otherwise be considered 'medically necessary' and reimbursed accordingly, are denied as 'non-covered routine services' when submitted with certain ICD-9-CM codes that indicate the services are performed in the absence of signs and symptoms, such as V70.0
  • The Centers for Medicare & Medicaid Services (CMS) does not require providers to submit claims for services that are excluded by statute under section 1862(a) (1) of the Social Security Act. However, if the patient (or his/her representative) believes that a service may be covered and asks that a claim be submitted or desires a formal Medicare determination, you must file a claim for that service to effectuate the patient's right to a determination
  • If you are submitting a non-covered service to Medicare for denial purposes, the service may be submitted with HCPCS modifier GY. This modifier lets us know that an item or service is statutorily excluded or does not meet the definition of any Medicare benefit.

Statutorily Excluded/ Non Covered Services

The Remittance Advice will contain the following codes when this denial is appropriate.

Reason Code CO-96: Non Covered Services

  • Statutorily Excluded or Non Covered services are never covered by Medicare based on the Fee Schedule of Services.

Advance Beneficiary Notice Information versus the Notice of Exclusion from Medicare Benefits (NEMB)

ABN Notices, and How They Are Used

ABNs allow Medicarepatients to make an informed decision about whether to receive a service that is likely to be non-covered on the basis of “not reasonable and medically necessary”. If you have a signed, valid ABN on file and your office receives a Medical Necessity denial for services, you may collect the billed amount from the patient for the services indicated.

The Requirements of the ABN

Providers must use the CMS-R-131 Form, which can be copied on your letterhead.  It must be given to the patient in advance of the service being rendered, and must cover all services that are being provided that may not be covered.  Repetitive notices are acceptable, if necessary.  The ABN may be completed prior to the patient's arrival for the provider's convenience (Blanks A-F), with the beneficiary or representative responsible for filling out their section (Blanks G-I).  Keep a copy of the ABN in the patient's file for documentation purposes.  A copy must also be provided for the patient.

When should the ABN be used?

If medical necessity is not met, or if the patient is receiving a screening service with frequency limitations, then the ABN should be delivered as described above.

What if the patient refuses to sign the ABN Form?

Make sure to verbally review the ABN with the patient, and document their refusal to sign.  A witness should sign and date the form. 

If you have obtained a valid ABN, submit a claim for the service(s) with HCPCS modifier GA. Refer to CGS Modifier Lookup tool for more information on HCPCS modifier GA.

Additional information related to the proper use of the ABN can be found on the CMS Beneficiary Notice Initiative WebsiteExternal Website.

The provider can refer the patient to their "Medicare and You" handbook for the complete list of excluded services. 


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