CMS Publishes Denials Criteria

The Centers for Medicare & Medicaid Services (CMS) announced that beginning October 1, 2008, it will publish most of the criteria for which it makes denials for excessive units of service on claims. These criteria, called "edits," are used by claims-processing contractors who apply its Medically Unlikely Edit (MUE) program during the electronic processing of all claims. CMS has stated that it is publishing them to improve the accuracy of claims payments.

"It is always our aim to ensure that CMS pays for appropriate services, at the same time protecting the Medicare Trust funds and the American taxpayer," said CMS Acting Administrator Kerry Weems. "This program is going to help us dramatically reduce costly payment errors."

CMS established the MUE program to reduce payment errors for Medicare Part B claims. The edits check the number of times a service is reported by a provider or supplier for the same patient on the same date of service.

Prior studies, including one by the U.S. Department of Health and Human Services' Office of the Inspector General in May 2006, identified significant Medicare overpayments because provider or supplier claims sometimes report services with too many units of service. These errors may be caused by numerous factors, including clerical and coding errors.

CMS first implemented the MUE program January 1, 2007, with edits for about 2,600 Healthcare Common Procedure Coding System/Current Procedural Terminology (HCPCS/CPT) codes. There have been quarterly updates, adding additional codes. CMS has not yet determined if there have been any savings due to the MUE program since it was implemented. The edits were developed by CMS with the cooperation and participation of national healthcare organizations representing physicians, hospitals, non-physician practitioners, laboratories, and durable medical equipment (DME) suppliers. CMS also utilized claims data in its analysis of MUE.

The October 1, 2008, version of MUE will contain most of the edits for about 9,700 HCPCS/CPT codes that have been assigned unit values for MUEs. MUEs are cumulative for each quarter. However, CMS said it will not publish all MUEs on October 1, 2008; additional ones will be published on January 1, 2009, and CMS will not publish those that are primarily designed to detect and deter questionable payments rather than billing errors, as publishing them would diminish their effectiveness. At the start of each calendar quarter, CMS will publish most MUEs active for that quarter.

To view the edits, visit the CMS web site at http://www.cms.hhs.gov/NationalCorrectCodInitEd/08_MUE.asp#TopOfPage