Understanding Medicare Benefits and Coverage –
A Coder's Perspective

In this article, we will take a broad look at Medicare Benefits and Coverage, and walk through key research resources coders can use to determine Medicare policy. Throughout this article, we will use screening mammography as the example (see example "edits" that coders may see, and discuss best-practice research techniques). Specifically, we will talk about Medicare Benefit Policy, payment status indicators under outpatient and physician payment systems and local and national coverage determinations.

What Does Medicare Cover?

Medicare provides coverage for items and services for over 43 million beneficiaries, but limits coverage to what is considered "reasonable and necessary" for the diagnosis or treatment of an illness or injury. This broad definition is dictated by Congress (see "definitions". Translating this to an understanding of actual covered procedures is the essence of the coder's challenge. The vast majority of this logic is provided on a local level and developed by clinicians at the contractors that pay Medicare claims. In certain cases, Medicare deems it appropriate to develop a national coverage determination (NCD) for an item or service to be applied on a national basis for all Medicare beneficiaries meeting the criteria for coverage.

Example: Medicare and Mammography

Let's start at the highest authority to determine coverage for screening mammography. Congress has weighed in specifically on this procedure, as recently as the Affordable Care Act. They defer to the U.S. Prevention Services Task Force recommendations that screenings to detect breast cancer for women are appropriate every two years for women ages 50-74. Diagnostic mammography for a suspected cancer may be covered more often, which we'll discuss later in this article.

Medicare Benefit Policy

Key Medicare benefits are defined in the Social Security Act and 42 CFR. For most services, these benefits are described in a general language that would be nearly impossible to use to determine proper scheduling, coding and billing under Medicare. The best translation of these highly legal publications is the Medicare Benefit Policy Manual, also known as Pub 100-02. Organized into chapters by type of service, this is the "lay person's" definition for what Medicare will and will not pay. All local payers must abide by these rules and all coders should be familiar with the layout of the manual.

For general outpatient or physician services, Chapters 15 and 16 are especially helpful; for inpatient stays, refer to Chapters 1 and 3. You can access the Benefit Policy Manual on the CMS website at http://www.cms.gov/Manuals/IOM/list.asp or consider a vendor solution that includes the Benefit Policy Manual. There have been close to 150 substantive changes (transmittals) to Pub 100-02 since 2003, so auditors should be sure to have access to historical policy as well as the current chapters available for download from CMS.

Example Medicare and Mammography

An important research tip for using the Benefit Policy manual is that it is typically better to flip through this book first or search an electronic version using words rather than codes, which the mammography example illustrates nicely. This is because there are important general benefit descriptions that do not specifically name a service or procedure by CPT/HCPCS code, or a specific medical condition by ICD-9 diagnosis code.

Screening Mammography is discussed in Chapter 15 (Covered Medical and Other Health Services), Section 280 (Preventative and Screening Services), Sub-section 280.3 (Screening Mammography).

This section provides a reasonable definition of mammography services: "The term "screening mammography" means a radiologic procedure provided to an asymptomatic woman for the purpose of early detection of breast cancer and includes a physician's interpretation of the results of the procedure. Unlike diagnostic mammographies, there do not need to be signs, symptoms, or history of breast disease in order for the exam to be covered."

Click here to view a helpful table that shows coverage by age and screening period, as well as instructions on calculating the screening period; yet no codes. Instead you will be directed to the Claims Processing Manual for billing and claims instructions via a citation found in this section. This manual instructs payers to check claims for improper billing for screening mammography, and details the error codes and MSN denial statements coders may encounter (see Appendix).

National Coverage Determinations

Medicare can issue a special policy determination for any service or procedure. Once published, all Medicare providers and payers must abide by this policy or NCD. There is, in fact, a long standing CMS NCD for Mammograms (originally published in 1978) that outlines the same information provided by the Benefit Policy Manual. Again, an important research tip is to search by key word, not code to find related policies and to use terminology that is fairly generic, rather than highly technical language. For instance, the word "digital" does not appear anywhere on the Mammogram NCD, though that may be what the doctor ordered.

The NCDs are available in two formats from CMS: as a manual (Pub 100-03) and as a policy document, available with MAC LCDs on CMS's coverage database (http://www.cms.gov/medicare-coverage-database/search/advanced-search.aspx). If you use a vendor solution to access electronic LCDs, you should insist that the NCDs are included in your subscription, as many payers don't bother with local policy when a long standing national policy has been established.

Payment Status Indicators

While the Benefit Policy and National Coverage Manuals allow Medicare to translate legal terminology to a more concrete discussion of specific benefits, services, and medical conditions, Coders still need to map this logic to actual procedure codes. At the national level, this is can be done by determining a code's Payment Status Indicator published within the payment system files by Medicare.

Mammography Example

Under the Outpatient Prospective Payment System, there is no APC for Mammography, and if you check Addendum B for Mammography HCPCS codes, you will see status indicators M (not billable under OPPS), E (Not paid under OPPS; not covered based on statutory exclusion ) and A (not payable under OPPS, but payable under another payment system).

Under the Physician Fee Schedule, mammogram codes that aren't used for quality measurement reporting purposes all have status indicator A, which means they are active payable codes, if covered. The Status Indicator for physician services is published in the Relative Value Unit File (RVU).

Download the Addendum A & B, or RVU files from CMS at http://www.cms.gov/HospitalOutpatientPPS/ and http://www.cms.gov/PhysicianFeeSched/ respectively, or even look up payment policy indicators on CMS's free tool here: http://www.cms.gov/apps/physician-fee-schedule/overview.aspx.

These free resources require that you know which codes to look up, and there are G HCPCS codes as well as 7 series radiology CPT codes for mammography related services; therefore it is best to use a code search engine that allows you to find procedure codes by key word search first. To see an example search, visit the following blog article and click on the Sample Code Report: http://www.mediregs.com/blog/2011/04/code-explorer-lets-you-see-outpatient-and-physician-payment-rules-one-screen.htm

Local Coverage Determinations

Finally, we get to the most precise information available to coders for medical necessity research, the Local Coverage Determination (LCD). These are published locally by the Medicare Administrative Contractor (MAC), and serve to clarify CMS policy, make policy for services not discussed specifically by CMS, and provide coding and claims processing advice from the payer to the provider. LCDs are published on your MAC web site, as well as in the centralized CMS Local Coverage Determination database (http://www.cms.gov/medicare-coverage-database/search/advanced-search.aspx). All coders should become familiar with the LCD structure, which includes important narrative and coding sections.

In the narrative section, you will notice an overview with citations to Medicare national policy. This information can help you understand where the payer is coming from and can also be a helpful reference if you examine a policy from a payer other than your own. You will also see a lengthy section called "Indications and Limitations of Coverage and/or Medical Necessity." This is the compliance rule you must follow when submitting a claim to your payer. There are often helpful descriptions of a procedure, documentation guidelines, and discussions of which patient conditions are covered, and additional terminology that enhance your understanding of the actual HCPCS/CPT code that describe a procedure. We've also heard from clinical documentation improvement specialists that this language, since it is written by a medical professional, is often persuasive when trying to help a physician understand why current documentation may be inadequate for coding & billing. Using an electronic coding research tool which allows key word, as well as code, searches of the local coverage determinations will ensure that you find the right documents, including LCDs that mention brand name drugs, biologicals and devices. (Note: the CMS database allows limited key word search.)

In the coding section of the LCD, you will see a list of bill types, Revenue Codes (for Part A LCDs only), CPT/HCPCS codes, and ICD-9-CM diagnosis codes. This provides excellent insight into the logic that exists in the medical necessity "scrubber" used by your MAC payer, and also helps you find local coverage policy by code search; however there are some important pitfalls to consider. First, the MAC can leave this section blank, which means a code search would not find the document, even though it exists and you are responsible for compliance. That can be true of the scrubber as well; there may be policy you are accountable for in an audit that fails to catch bad claims before payment is made. Second, since the non-covered diagnosis codes are not listed, if you search for a diagnosis code provided by a physician that is NOT covered, you'll get no search results, which can be confusing.

There has been a large reduction in the number of LCDs since the new MAC assignments have begun, so there are fewer documents out there to help coders understand coverage rules. Referencing the national policy manuals and national payment indicators can be a good start to researching a procedure or service for which your payer does not have a policy. Checking other Medicare or private payer policies can also help, particularly if you use that to focus on the national references provided.

Definitions

"Reasonable and Necessary"

Services must be reasonable and necessary:
-For the diagnosis or treatment, or to improve the functioning of a malformed body member;
-The need for the service must be clearly documented in the patient's medical record; and 
-The service must be:
   - Safe and effective;
   - NOT experimental; AND
  - Appropriate, including duration and frequency that is considered suitable for the service.
 

 "Elective (NEVER covered) vs. Emergency Necessary"

Elective surgery can be scheduled in advance, is NOT an emergency, and, if delayed, would not result in death or permanent impairment of health.

An "Emergency Medical Condition" involves a patient manifesting by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in:
-Placing the patient's health in serious jeopardy
-Serious impairment to bodily functions, or
-Serious dysfunction of any bodily organ or part.

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