New FQHC Billing Requirements for Medicare Part A - What do they mean?

The requirements for filing Medicare Part A claims changed on January 1, 2011.  The logistics of these changes continue to be worked out as amended requirements and system changes occur with Medicare contractors.  This article describes the current state of the changes from Medicare and how they will impact most FQHCs, as well as how the changes should be handled in Practice Management systems.

Beginning January, 1, 2011, Medicare required that Part A claims include line level details. CMS publication MM7038 states: “Beginning with dates of service on or after January 1, 2011, when billing Medicare, FQHCs must report all pertinent services provided and list the appropriate HCPCS code for each line item along with revenue code(s) for each FQHC visit. The additional line item(s) and HCPCS code reporting are for informational and data gathering purposes only, and will not be utilized to determine current Medicare payment to FQHCs. Until the FQHC prospective payment system is implemented in 2014, the Medicare claims processing system will continue to make payments under the current FQHC interim per-visit payment rate methodology.”

In a later publication, SE1039, Medicare states:  “When reporting multiple services on FQHC claims, the 052X revenue line should include the total charges for all of the services provided during the encounter. For preventive services with a grade of A or B from the USPSTF, the charges for these services must be deducted from the total charge for purposes of calculating the beneficiary coinsurance correctly.”

What do these changes mean to the way you are currently billing?  How will these impact your organization?

Previously, FQHCs “rolled up” the procedures on a visit into a single line for electronic filing.  Because procedures were set to roll up, there was no detail on the claim regarding the other procedure codes and the only revenue code that impacted billing was the code associated with the visit itself, for example 0521.  This is no longer the case.  Your billing staff now has to properly code revenue codes in addition to procedure codes.  There are guidelines for revenue coding available.  Generally, the expectation is that only one line will contain the 0521 revenue code.  There are situations where there will be more than one line with this code, but clinics should use a more applicable code when available.

What should the claim look like now?

Since the changes, the claim should contain each procedure code and the sum of all codes on the office visit line.  Below is a claim example:

Row

CPT

Description

Rev Code

From Date

To Date

Charge

1

99212

Office Visit

521

1/5/2011

1/5/2011

$71.00

2

69210

Ear Wax Removal

479

1/5/2011

1/5/2011

$48.00

The claim below depicts how this would look on a paper form if submitted under the new guidelines:

claim

Will this inflate our Accounts Receivables in the billing system?

The first row, the office visit code, contains the sum of the total charges. The subsequent rows contain the actual charges. Nowhere on the claim will you find the actual charge for the office visit or in our example the 99212 code.

Why are the coinsurance calculations incorrect?

As you know, coinsurance for a FQHC should be 20 percent of the total charges covered in the visit. There is a problem with adjudication that is impacting coinsurance calculations at this time. CMS has indicated that the fix for this problem will be released in early April. To understand the problem, you need to understand how claims are being adjudicated by Medicare contractors to calculate coinsurance.

When claims are being adjudicated, the Medicare systems sort the lines on the claim first by revenue code and then by CPT/HCPCs code. The coinsurance amount was being calculated on the first line after the sort. They are now calculating it on the first line with a 052x revenue code after the sort.

This poses several issues when determining coinsurance:

1. Until the amendment was released indicating that the sum of the charges had to be submitted on the office visit line, there was no single line that represented total charges that could be used for calculating coinsurance, therefore, it was being calculated off the charges for a single line on the claim. To illustrate, below is a mock remit, (this was not provided by Medicare and is not meant to represent an actual remit), for the claim example that was used above:

claim2

In this example, both lines were submitted with the 0521 revenue code and then sorted by procedure code. The Coinsurance amount should have been $23.80 but was calculated on the first line as $9.60. Since the requirement to unbundle the claims was effective on January 1, 2011 and the amendment was not released until later, practices did submit claims like the example above and will have claims that were not adjudicated correctly.

2. It was not initially clear that the revenue codes needed to be coded differently so many facilities submitted the “unbundled” claims with the 052x revenue code on each line.  Because of the sorting issue, even after the amendment requiring the sum of the charges on the office visit, coinsurance was calculated incorrectly.  In the remit example above, the 99212 line would now have a charge amount of $119.00 but would have still been sorted below the 69210 and therefore coinsurance would be calculated as 20 percent ($9.60) of $48.00.

Why do some claims have the correct coinsurance amount?

Now that you understand how claim lines are sorted and used for calculating coinsurance, the answer to this question becomes clearer. For claims that only contain the office visit code and no other lines, the charge amount on the single line was the sum of the total charges for the claim. For the single line claims, neither the summing issue nor the sorting issue would have affected coinsurance calculations.

What do we do with claims that were incorrectly processed?

In the special message issued by NHIC, it was indicated that providers do not need to take action at this point. In the case where claims were originally submitted without the sum of the total charges on the office visit, we recommend contacting your contractor to see how those claims need to be handled. Since they do not contain the sum of charges on the office visit, it stands to reason that Medicare cannot properly re-adjudicate these claims. This is another item that we are watching closely and will provide updates on as they become available.

What if 052x is the correct revenue code for multiple lines on a claim?

This will happen. There will be times when you cannot find a more appropriate revenue code. An example that one clinic provided was an office visit with an I&D. Both the office visit and the I&D would be coded with 0521. Until the system changes, expected in April, these claims will not likely calculate coinsurance correctly because of the sorting issue. CMS has indicated that the fix in April will "apply coinsurance on the line with 052x with the office visit code 99XXX when multiple 052x lines are reported." We continue to communicate with CMS representatives and will provide updates on this when available.

How will this impact secondary claims?

We are concerned about this item. Traditionally if the charges on the remit did not match the charges on the claim, secondary payers would reject the claim.  Since the total charges in a claim file for Medicare will be inflated because the sum of total charges is on the office visit along with the individual charges for other codes, we are concerned the remit will reflect a higher total charge amount than the secondary claim for printed claims. Medicare will cross over some claims and practices will print some claims.

We posed this question to a CMS representative and were told that the only charge that will show on the remit is the sum that is on the office visit. Charges for the remaining lines should be reflected as $0.00 on the remittance according to our source.

However, this is not the case on the remittances that we are receiving so we are aggressively pursuing information from our CMS contact. We are treating this as an urgent matter and will provide an update as soon as we receive one.

What if one of the lines is denied?  Does this impact coinsurance?

According to CMS, the subsequent lines on the claims are not evaluated at all for adjudication, they are only informational. Every line other than the office visit will be displayed on the remittance with an Adjustment Group Code "CO" and an ANSI Reason Code "97". This should indicate to a secondary that the payment for the additional lines was included in the payment on another line.

If you see any other adjustment reasons for an individual line you should contact your Medicare contractor and question why that line was evaluated at all. CMS has indicated that the subsequent lines are informational only to help with the development and implementation of the Prospective Payment System (PPS) for Medicare FQHCs.

Coinsurance will be calculated (once corrected in the April release) on the sum of charges represented on the office visit.

What should my Practice Management system be doing to help?

This answer to this question is simply automation.  These changes should be handled with minimal setup and should not impact the way you are entering claims.  Your vendor should thoroughly understand the changes, communicate with Medicare, and implement them in a manner that does not disrupt your normal claims entry process or inflate your AR.

This document was compiled through research on CMS bulletins, communication with CMS representatives and providers, and filing claims. It does not cover all changes that are occurring with Medicare.  We continue to work aggressively to understand upcoming changes and ensure that FQHC providers are properly paid for Medicare services.  If you have additional questions that we can research, please send them to This email address is being protected from spambots. You need JavaScript enabled to view it. or post to our blog at www.successehs.com.