CODE AUDITING RULES. SAMPLE Medical Policy Rationale

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1 CODE AUDITING RULES As part of Coventry Health Care of Missouri, Inc s commitment to improve business processes, we are implemented a new payment policy program that applies to claims processed on August 8, 2007 or later. The program aligns our payment policies and claims adjudication system with nationally accepted coding standards and guidelines of the Centers for Medicare and Medicaid Services (CMS) and the American Medical Association (AMA). It also ensures that coding requirements are supported with improved transparency. SAMPLE Medical Policy Rationale Add-on Codes Allergy Testing and Allergy Immunotherapy Ambulatory Blood Pressure Monitoring Anesthesia Modifiers Certain procedure codes are commonly carried out in addition to the performance of a primary procedure. These additional or supplemental procedures are referred to as add-on procedures and describe additional service associated with the primary procedure. These codes are identified in the AMA CPT manual with a plus mark ( + ) symbol and are also listed in Appendix D of the CPT manual. Add-on codes are always performed in addition to a primary procedure, and should never be reported as a stand-alone service. When an add-on code is submitted and the primary procedure has not been identified on either the same or different claim, then the addon code will be denied as an inappropriately coded procedure. If the primary procedure is denied for any reason, then the add-on code will be denied also. E/M services for established patients are included in the global allowance for allergy testing and allergy immunotherapy, unless the E/M service is a significant, separately identifiable service. Allergy testing is not performed usually on the same day as allergy immunotherapy in standard medical practice. Therefore, these codes should not be billed together. According to CMS policy, Ambulatory Blood Pressure Monitoring is covered only for the diagnosis of elevated blood pressure reading without a diagnosis of hypertension. Anesthesia services should be billed with the correct modifier(s) to indicate whether the service was provided entirely by the anesthesiologist or the anesthesiologist provided supervision for a CRNA. Similarly for services provided by a CRNA, the appropriate modifier should be appended to indicate whether or not a physician supervised the anesthesia administration. Assistant Surgeons The modifiers used to indicate the services of an assistant surgeon are: 80 Assistant Surgeon, 81 Minimum Assistant Surgeon, 82 Assistant Surgeon (when qualified resident surgeon not available), AS Physician Assistant, nurse practitioner, or clinical nurse specialist services for assistant at surgery. Surgical codes identified by CMS or by the American College of Surgeons (ACS) as not requiring an assistant surgeon will be denied. In addition, CMS identifies certain procedures where assistant surgeons may not be allowed unless documentation supports the need for an assistant surgeon. Documentation will be required. Bilateral Procedures A bilateral procedure is defined as a procedure that is performed on both sides of the body at the same session or on the same date of service. Procedures billed with a 50 modifier should only be billed on one line with one unit of service. Procedures that are bilateral in nature should be billed on a single claim line, without any modifiers, and with one unit of service. Bundled Services Cardiac Rehabilitation There are a number of services/supplies for which payment is bundled into the payment for other related services, whether specified or not. The list of bundled services is based on CMS National Physician Relative Value File. Status indicator B. Such services will be denied. Cardiac rehabilitation services include areas of exercise, diet and related modalities provided under physician supervision. Coventrypolicy allows 36 sessions within 12 weeks.

2 Co-Surgeons Deleted Procedure Codes Diagnosis and Gender Diagnosis-Age Rules Diagnosis- Procedure Dialysis Duplicate Claims Evaluation and Management Services Co-Surgeons are two physicians working together as primary surgeons, performing distinct parts of a procedure. The modifier used to indicate the services of a cosurgeon is modifier 62 (Co-Surgeon). Only surgical codes identified by CMS or ACS as requiring a co-surgeon will be allowed when billed with modifier 62. Procedure codes, such as Level II HCPCS and AMA CPT-4 Codes undergo revision by their governing entities on a regular basis. Revisions typically include adding new procedure codes, deleting procedure codes, and redefining the description or nomenclature of existing procedure codes. These revisions are normally made on an annual basis (January 1) by the governing entities with occasional quarterly updates. Claims received with deleted procedure codes will be validated against the date of service. If the procedure code is valid for the date of service, then the claim will continue processing. If the procedure code is invalid for the date of service then the procedure will be denied. Note: No grace period will be allowed. When the gender on the claim does not match one of the diagnoses on the claim, these services will be denied. Certain diagnosis codes have been identified as being specific to certain age groups. When one of these diagnoses is billed and it is the only diagnosis on a claim and it does not match the age of the patient on the claim for that date of service, then all services on the claim will be denied. The diagnosis code(s) billed with each procedure code should be clinically appropriate for the billed procedure. Per CMS policy, Medical nutrition therapy is not covered when provided on the same day or within the previous 28 days of a paid dialysis management service. Per CMS policy, the usual course of treatment for hemodialysis is 3 times within a 7- day time period. When more than 3 procedures are billed within a 7 day period, additional procedures will be denied. Duplicate claim is defined as a claim or claim line that has been previously submitted for payment, regardless of payment status by a provider of the same specialty, same or different tax group. Example: A deleted CPT or HCPCS code is billed and its new replacement code is also billed on the same date of service by the same provider. This billing scenario is considered to be a duplicate submission. The American Medical Association defines a new patient as one who has not received any professional services from the physician or another physician of the same specialty who belongs to the same group practice within the past three years. Otherwise, the patient is considered an established patient. Only one Evaluation and Management (E/M) code should be billed for a single date of service by the same provider group and specialty, regardless of place of service. If more than one evaluation and management code is billed and the appropriate modifier is appended, both services will be reimbursed. When Evaluation and Management services are billed on the same date as other therapeutic or diagnostic services, appropriate modifiers are required. Annual exams or screening services should be billed as new or established patient preventive medicine visits, not as consultations. Only one inpatient admission or inpatient consultation service is allowed per week by the same provider group and specialty. An initial E/M service for patients with diabetic LOPS is required if follow-up E/Ms are to be considered for reimbursement, and are only to be billed once per group practice. ICD-9 codes that support medical necessity are required. Please refer to AMA guidelines for correct use of Evaluation and Management services codes.

3 Global Obstetrical Package The American Medical Association and the American College of Obstetricians and Gynecologists define the global obstetrical package for uncomplicated maternity cases as including the following services: Ante partum Care (approximately 13 visits) Initial and subsequent history Physical examinations Recording of weight, blood pressure and fetal heart tones Routine urine dipstick analysis Monthly visits up to 28 weeks gestation Biweekly visits up to 36 weeks gestation Weekly visits from 36 weeks gestation until delivery Delivery Services Admission to the hospital Admission history and physical examination Management of uncomplicated labor Vaginal or cesarean delivery Postpartum Care Routine hospital visits Routine office visits during global period Separate reimbursement for those services which are included in the global obstetrical package for uncomplicated maternity cases is not allowed. Evaluation and Management services or Postpartum care is not allowed by the same provider that performed the delivery within the 6 weeks following the delivery. If a provider provides all or part of the ante partum care but does not perform the delivery due to reasons such as termination of pregnancy by abortion or referral to another provider for delivery, then the provider should bill the ante partum care using the appropriate E/M or ante- partum care only code. The provider who performs the delivery only should bill the appropriate delivery only code. It is not appropriate for a single provider to bill more than one ante- partum care in any combination during the ante partum period. Cerclage removal is included in the delivery fee.

4 Global Surgery Hyperbaric Oxygen Therapy Incident To Services Invalid or Deleted Diagnosis Codes/ Diagnosis Specificity Multiple Endoscopy Multiple Procedure Reduction Multiple Procedure Reduction for Radiology Overview National Correct Coding The Global Surgery Package includes all necessary services normally furnished by the surgeon before, during and after a surgical procedure. The Global Surgery Package applies only to surgical procedures as defined by CMS that have postoperative periods of 0, 10 and 90 days. The global surgery concept applies only to primary surgeons and co-surgeons. The following items are included in the Global Surgery Package: preoperative and same day E/M visits after the decision is made to operate; all post-operative E/M visits and services for 10-day and 90-day surgeries related to the primary procedure in accordance with CMS guidelines. Anesthesia services billed by the surgeon are not reimbursed separately. Hyperbaric oxygen therapy should be allowed only in place of service 21 (inpatient hospital), 22 (outpatient hospital) or 23 (emergency room). Incident To services are those services furnished as an integral, although incidental, part of the physician's personal professional services in the course of diagnosis or treatment of an illness or injury according to CMS guidelines. Incident To services should not be billed in an inpatient hospital (21), outpatient department (22, 23, 24), or military treatment facility setting (26). Annually (October 1), diagnosis (ICD-9) codes undergo revision by the governing entity. Revisions typically include adding new diagnosis codes, deleting diagnosis codes, and redefining the description or nomenclature of existing diagnosis codes. Claims received with deleted diagnosis codes will be validated against the date of service. If any diagnosis codes listed on a claim line are invalid for the date of service or are not reported to the highest level of specificity (missing 4 th or 5 th digit) then the claim will be denied. Note: No grace period will be allowed CMS has established payment guidelines when multiple endoscopic procedures are performed for the same date of service. Endoscopies can be classified as either related (e.g. 2 different upper GI endoscopies) or unrelated (e.g. an upper and a lower GI endoscopy]. The underlying concept of multiple endoscopy rules is that for each family of endoscopies (e.g. upper GI) there is a base endoscopy procedure which is considered to be a component of all other endoscopies within that family. In calculating the reimbursement for multiple endoscopies, the cost of the base endoscopy is deducted from the related endoscopy when the latter is not the endoscopy with the highest relative value. CMS reimbursement for multiple surgical procedures is based on a 100%/50%/25% methodology. The procedure with the highest RVU is reimbursed at 100% of the allowed amount and all secondary procedures are reimbursed at 50% of the allowed amount. This methodology only applies to procedures that have been identified by CMS as being subject to multiple procedure guidelines, which is a subset of all procedure codes. Multiple Procedure Reduction for Radiology applies when a provider performs two or more radiological procedures on the same date of service that are within the same CMS designated family, i.e. a CT of the abdomen and a CT of the pelvis. In this situation, the technical component of the lower valued procedure will be reduced by 25%. This applies only to physicians performing these procedures in their offices and to free-standing diagnostic centers. The National Correct Coding Initiative (NCCI) is a collection of bundling edits created and sponsored by CMS that are separated into two major categories: Column I and Column II procedure code edits (previously referred to as "Comprehensive" and "Component"), and Mutually Exclusive procedure code edits. CCI edits are for services performed by the same provider on the same date of service only and do not apply to services performed within the global surgical period. The CCI edits bundle procedure codes into other procedure codes. Each CCI code pair edits is associated with a policy as defined in the National Correct Coding Initiative. Effective dates apply to code pairs in CCI. These represent the date when CMS added the code pair combination to the CCI edits. Code combinations are processed based on this effective date. Termination dates apply to code pairs in CCI. This date represents the date when CMS removed the code pair combination from the CCI edits. Code combinations are refreshed quarterly, utilizing only the active edits. When a code is billed that is not recognized by CMS but is a valid CPT code and there is an equivalent policy for the code recognized by CMS, Coventry will apply the appropriate CMS policy. Coventry also applies correct coding policies outlined in the National Correct Coding Policy Manual. Once Per Lifetime Services Operating Microscope Certain procedures would be inappropriate to be billed more than once per lifetime due to anatomical considerations, e.g. appendectomy. In accordance with CCI Guidelines, separate reimbursement of the operating microscope is only allowed when it is used in the performance of certain procedures.

5 Place of Service Post Operative Pain Management Procedure-Modifier Rules Certain codes are allowable only in specific places of service, e.g. hospital admission codes ( ) can only be billed for place of service Inpatient Hospital (21). CMS does not allow for separate payment for anesthesia services or services performed for anesthetic purposes when provided by the same physician who also performs the procedure. In this case, payment for the anesthetic service is included in the payment for the medical or surgical service. Anesthetic services provided by surgeons may be represented in several different forms. Post operative pain management is included in the global surgical fee, when performed by the operating surgeon. Procedure Code Modifier combinations are reviewed and validated. Most modifiers have descriptions indicating that the procedure applies to a specific anatomic site, that the services performed were separate and distinct from other services, or that special circumstances surrounded the performance of the service. Appropriate use of modifiers to identify the correct anatomic site is required. Modifier use may be subject to retrospective review. Documentation will be required for services submitted with a 22 Modifier requesting additional reimbursement. Procedures billed with incorrect modifiers will be denied as inappropriately coded procedures in accordance with AMA and CMS code definitions.

6 Professional, Technical, and Global Rules Diagnostic tests and radiology services are procedure codes that include two components: professional and technical. The professional component describes the physician work portion of a procedure and is represented by a procedure code with a modifier 26. The technical component describes the technical portion of a procedure, such as the use of equipment and staff needed to perform the service, and is represented by a procedure code with modifier TC. The global service represents the sum of both the professional and technical components, and is represented by the CPT/HCPCS code for the service without modifiers 26 and TC. Only procedure codes designated as diagnostic tests or radiology services have the two individual components. Reimbursement of diagnostic tests and radiology services is limited to no more than the amount for the global service. Diagnostic tests or radiology services submitted with a place of service outside of the office setting should be reported using the appropriate professional component modifier. Professional radiology services should not be billed by a non-radiologist in the inpatient or outpatient hospital, freestanding surgery center or office setting. Only one professional radiology service will be reimbursed (the same service will be denied when billed by different providers). Professional Component Only services are stand-alone procedures that describe only the professional component of a given procedure (e.g., interpretation and report only). These codes identify the physician work portion of selected diagnostic procedures that have associated codes to describe the technical and global components of these procedures. It is inappropriate to bill these procedure codes with professional or technical component modifiers as neither of these modifiers is applicable to this group of procedure codes. Technical Component Only services are those that are stand-alone and describe only the technical component of a given procedure without the use of the technical component modifier. Procedures should not be billed in the inpatient hospital, outpatient hospital, emergency department, or ambulatory surgical center using a technical component modifier. The technical component of diagnostic tests and radiology services will be billed by the facility in these settings. Many clinical laboratory services do not have associated professional components. When a provider bills for one of these clinical laboratory services with a professional component modifier, the clinical laboratory service will be denied. The interpretation of laboratory results is included in the payment for E/M services. It is inappropriate for pathologists to bill for laboratory oversight and supervision through the use of this modifier. Reimbursement for laboratory oversight and supervision is obtained through the hospital or independent laboratory. Certain procedure codes, such as office visits and surgical procedures, describe physician services. These services do not have separate professional and technical components. Therefore it is inappropriate to use professional and/or technical component modifiers with these procedure codes. These rules are in accordance with AMA and CMS guidelines.

7 Quality of Care Separate Procedures Split Surgical Care Surgical Trays Team Surgery Within certain physician specialties, there is a set of services that may be rendered by that specialty. Other services would be considered to be outside of the scope of services for that specialty. Certain diagnostic services (i.e. radiology, laboratory, etc) are limited to being performed by providers with certain specialties. An example is urodynamics ( ). These services would not be expected to be billed by a provider whose specialty is not either urology or obstetrics/gynecology. The description for many CPT codes includes a parenthetical statement that the procedure represents a "separate procedure." The inclusion of this statement indicates that the procedure should not be reported when it is performed in conjunction with, and related to, a major service. Split surgical care occurs when different physicians furnish either the pre-operative, intra-operative or post-operative portions of the global surgical package. Split surgical care is only applicable to providers of different Tax ID groups or providers within the same Tax ID group but with different specialties. Providers within the same Tax ID group and same specialty are treated as a single entity and may not bill split surgical care. When split surgical care occurs, each provider is reimbursed according to the portion of surgical care they provided. The three portions of surgical care are: Pre-operative; Intra-operative- surgical care only including hospital post-operative care; and Post-operative. Modifiers 54, 55 and 56 are appropriate for use only with procedure codes that have a 10-day and 90-day post-operative period. It is not appropriate to append these modifiers to E/M services, 0-day surgical services, or any other service that does not have a 10-day or 90-day post-operative period. Surgical trays are considered incidental to the surgical service according to CMS guidelines. Under some circumstances, highly complex procedures are carried out by a team of physicians. In a team Surgery setting, the physicians are typically of different specialties and also include other highly skilled specially trained personnel. Only surgical codes identified by CMS as requiring a team to complete the procedure will be allowed when billed with modifier 66.