CODING

How to fight bundling

Payers often lump separate claims together to pay you less. But you don't have to let them.

By Dorothy L. Pennachio
Senior Editor

A former coding specialist for a major health insurer says that her instructions were to pay as little as possible on physicians' claims. One way to do that was by bundling—combining two or more CPT codes and substituting one overarching code, often ignoring modifiers along the way.

The former employee, who spoke to Medical Economics on the condition of anonymity, says the company used a claims editing system that "totally ignores CCI [Medicare's National Correct Coding Initiative] edits."

Now working for a large physician group, the coding specialist helps the practice appeal bundled claims. "We appeal any claim that's suspect," she says. "We just keep squawking." Her group has won 90 percent of its appeals.

How does bundling typically work? Let's say a patient presents for evaluation of diabetes, and you notice two suspicious skin lesions—one on the neck and one on the back. You decide to biopsy one and excise the other. You code: 99214 with modifier –25 (E&M of the patient with diabetes); 11402 (back lesion excision, benign, 2.0 cm); 11100 with modifier –59 (biopsy of neck lesion).

Modifier –25 is for a separate and distinct service provided during the same visit. Without modifier –25 on the E&M 99214, both lesion codes might be denied, or the E&M code itself might be denied. The modifier tells the payer that the codes are truly separate.

Modifier –59 is for a distinct procedural service. It should alert the payer that two services that normally would be bundled into the lesion code should be paid separately because you performed the biopsy (11100) separately. The two lesions were truly distinct, separate, and unrelated to each other.

If the insurer ignores modifiers –25 and –59, and does not recognize each separate service for payment, that means it's bundling.

Another example involves infusions and injections. Say a patient is dehydrated, and you start an IV for a saline infusion. A half hour into the infusion, the patient becomes nauseated and you inject ondansetron into the IV site.

"If the injection isn't included with the infusion therapy—it's done separately at the 30-minute point—you're correct to report it as a separate procedure, and you should be paid for both," says C.J. Wolf, physician manager of outpatient coding and reimbursement for Intermountain Health Care in Salt Lake City. But if an insurer is bundling, it will refuse to pay for the injection.

How to fight back

The only way to combat bundling and get the reimbursements you're entitled to is to track your claims submissions and check them against your explanation of benefits forms.

You may assume you don't have the time, but that could be a costly assumption. "If it were a single $50 charge, you'd have to weigh the gain of going after that money against the wear and tear on your staff," says David Packo, president of Emergency Medicine Physicians in Canton, OH. But it's not a single charge: Over time, it could be thousands of payments you're missing. So when your EOBs come in, look for coding changes and reimbursements that don't match your contract. Examine denials, delays, partial payments, and their explanation codes.

Watch for these red flags:

• When the EOB omits bundled codes as though the service were never provided. For example, you provided an E&M service and a minor outpatient surgery on the same day. You filed a claim using the –25 modifier, but when it came back, the EOB showed the surgery code alone, with no E&M code.

• When the code is listed, but the carrier omits the service modifier (such as –25 or –59), and there's no payment for the separate procedure.

• When a procedure code is listed, but there's no payment, because the carrier bundled the charge with an unrelated procedure for a different diagnosis. The EOB will usually note, "Payment for this service is included in the fee for the procedure." (For more on how to decipher insurers' remarks on EOBs, see "Spotting bundling: How to decipher an EOB").

• When an E&M procedure code is listed, but there's no payment, because the carrier bundled the charge with that of an unrelated surgical service.

After you and your manager have analyzed a few weeks' worth of EOBs, identify the procedures that insurers are most likely to bundle, says David C. Scroggins, a practice management consultant with Clayton L. Scroggins Associates based in Cincinnati. "Make a list for your staff of the CPT codes connected to those procedures, and the names of carriers who have underpaid. That way, the staff knows to carefully check the EOBs from those companies," he says.

You're less likely to see bundling from Medicare carriers, but it pays to watch these EOBs, too.

"If Medicare bundles your codes, the EOB will show the line item with a zero payment along with the denial or processing code," says Sharon M. Andrews, consultant/owner of DermResources in Pensacola, FL. Be sure your billing staff pays attention to zero payment line items. Running regular open item reports will keep those services from falling through the cracks.

Some commercial insurers are notorious for systematic bundling. Challenge those companies by appealing, but make sure your appeal is within the deadline. (One insurer we contacted said its deadline is 180 days from the date you receive the EOB.)

And register your complaint with the AMA and your state medical association. The AMA has a health plan complaint form where you can register grievances (go to www.ama-assn.org/ama/pub/printcat/6760.html). See "This doctor fought back" to read about one doctor who recovers hundreds of thousands of dollars annually through appeals.

An insurance company medical director told James A. Zalla, a dermatologist in Florence, KY, who chairs the American Academy of Dermatology Association's Health Care Finance Committee, that when doctors appeal bundled claims, the services are eventually paid in most cases.

"That's surely confirmation that such bundling isn't appropriate and should never have occurred," says Zalla.

Contact the plan's medical director or provider relations specialist if you don't get satisfaction right away. As long as you have detailed documentation, your chances are good. But if your appeal is denied, legal action may be in order.

These doctors went to court

Many large insurers analyze and "edit" CPT codes with software programs such as ClaimCheck or Patterns Review. Physicians say the software unfairly bundles, downcodes, and ignores modifiers, and that it amounts to a "black box" because payers don't disclose the software's edit system.

A representative of McKesson Information Solutions, the company that makes ClaimCheck, says the program merely finds and corrects miscoded claims. The company defends its product as a fair and accurate code-auditing tool that automates what had been a manual process. "The software is a tool. How payers use it is their responsibility based on their benefit designs and policies," says Carolyn Staudemmeier, the general manager of the clinical auditing and compliance division of McKesson.

The AMA has complained that insurers' "tweaks" sometimes get out of hand. In 2002, the association sent letters to Aetna, Anthem, and CIGNA, raising complaints about the organizations' improper use of CPT codes—their widespread bundling, downcoding, and ignoring modifiers. The letters were co-signed by specialty societies. By now, 28 such letters have gone out from the AMA to 75 percent of the insurance industry.

Because of an ongoing class-action suit involving eight major health plans and some 700,000 physicians, representatives of the plans were, on the advice of counsel, unwilling to speak with Medical Economics regarding their responses to the AMA's letters.*

"That class-action suit is a serious challenge to insurance companies," says J.B. Silvers, a professor of health systems management at Case Western Reserve University in Cleveland. "The plans have been pushing the envelope too far, and the suit has triggered a lot of litigation. Until now, doctors felt it wasn't worth the bother to go after insurance companies." Maybe plans will be less aggressive in their bundling after this suit is finished.

"Their reasoning will be, 'Let's not even try it, because there's a chance we'll lose.' "

The best way to prevent improper bundling by payers is to be alert at the front end. Look closely at the standard contracts offered by plans. "Don't passively accept whatever's offered," says Tobin Watt, a health care attorney in Atlanta.

"See what that contract says about coding," says Watt. "Negotiate. Stipulate that the insurer can't change its policies without advance notice.

"Ask, 'What's your payment methodology?' Give them a list of the top 20 codes in your office and ask what the company pays on them," says Watt. He concedes, though, that the typical payer response is "Take it or leave it" unless your practice is large enough to have clout.

Spotting bundling: How to decipher an EOB

These clues that an insurer may have improperly bundled services show up under the "remarks" column on the explanation of benefits form:

"Payment for this service is included in the fee for the procedure."

"Submitted charges were redistributed for a more accurate benefit."

"The procedure code submitted on your claim has been changed to one that better represents the services performed by your physician."

"This service is a component of a primary procedure. Payment for the primary procedure includes reimbursement for the related procedure."

"Payment for one or more billed procedure codes has been denied because it is considered a component of this billed procedure code."

"Medical visit not allowed for separate reimbursement."

"Related charges rolled up into primary procedure per HIPAA regulations."

"This last example is truly innovative," says James A. Zalla, a dermatologist in Florence, KY, and chair of the American Academy of Dermatology Association's Health Care Finance Committee. "There's nothing in HIPAA regs about 'rolling up' charges so that separate service payments disappear."

This doctor fought back

Chicago otolaryngologist John T. McMahan brought suit against a large insurer last year for bundling and downcoding claims. The parties settled for $141,000, and McMahan says he owes his success to impeccable claims records.

"Our position was also strong because we knew more about the rules and regulations than the payer did," says Kristie Martinez, practice administrator for McMahan's Northwestern Nasal + Sinus. The insurance company had bundled endoscopies with office visits and reimbursed for the less costly service only.

The insurer also had arbitrarily downcoded the practice's level 99213-99215 E&Ms, basing its decisions on McKesson's Patterns Review software, says Martinez. "The plan then called the lowered reimbursement 'a negotiated write-off' as though it was something the practice had agreed to," she adds.

The practice is now bringing suit against two other insurers.

"More doctors should appeal and sue if necessary," says Martinez. "Insurance companies repeatedly deny claims, and not enough physicians are taking a proactive approach by having a good auditing system of their EOBs.

"Every day we find at least one error on our EOBs. I appeal even when we're underpaid by $5. Sometimes we settle over the phone.

"When we reach over $50,000 in denials by one payer, and all appeal efforts have failed, we start legal action," says Martinez.

"We collect hundreds of thousands each year in appeals alone. That money would have been lost if we hadn't kept haunting payers."

*See "The HMO lawsuit: Is the end in sight?" June 6, 2003.

Dorothy Pennachio. Coding: How to fight bundling. Medical Economics Sep. 5, 2003;80:65.