Seven Things That Will Cause Medicare to Deny a Claim
Written by Kelli Moore, MCS-P,I   
Thursday, September 07, 2017 12:21 PM

A Working Guide for What to Do When Medicare Denies for Medical Necessity

By Kelli  Moore, MCS-P, I

Medical Compliance Specialist – Physician, Instructor

Getting a notice from Medicare that your services were not medically necessary and therefore not payable is not the response any doctor or biller wants to see. No one wants to work for free. So, getting this ambiguous denial, “These are non-covered services because this is not deemed a medical necessity by the payer”, is both alarming and frustrating. It raises questions: what causes this denial from Medicare? What can one do to fix this and keep it from happening in the future? Is there any hope of getting paid after getting this denial?

The Cause

First, there are the seven main reasons that will trigger this unfavorable denial:
1. Wrong primary diagnosis
2. Wrong secondary diagnosis
3. Not enough diagnosis for the CPT code reported
4. Wrong modifier
5. More than 30 visits in a calendar year
6. More than 12 visits in a calendar month
7. The date of first consult is older than 90 days

The Fix

Be aware there may be more than one reason for the denial. So use this as a guide to pinpoint what is wrong with the claim and then go about fixing all the problems and then get the claim re-billed correctly.

1. Wrong primary diagnosis:

According to the current Novitas LCD L35424, claims for chiropractic services must be accompanied by a proper diagnosis.
LCD L35424 Chiropractic Services
Coverage Indications, Limitations, and/or Medical Necessity

ICD-10 Codes that Support Medical Necessity

Group 1 paragraph: The CPT/HCPCS codes included in this LCD will be subjected to “procedure to diagnosis” editing. The following lists include only those diagnoses for which the identified CPT/HCPCS procedures are covered. If a covered diagnosis is not on the claim, the edit will automatically deny the service as not medically necessary. (emphasis added) 
  • M99.00 – Segmental and somatic dysfunction of head region 
  • M99.01 – Segmental and somatic dysfunction of cervical region
  • M99.02 – Segmental and somatic dysfunction of thoracic region 
  • M99.03 – Segmental and somatic dysfunction of lumbar region
  • M99.04 – Segmental and somatic dysfunction of sacral region
  • M99.05 – Segmental and somatic dysfunction of pelvic region

This means that if the claim does not have a “primary diagnosis” of segmental and somatic dysfunction of one of the five regions of the spine, it will be denied.

FIX: Make sure that the claim has an M99.00, 01, .02, .03, .04, or .05 as the primary diagnosis for each region treated. If not, then correct the diagnosis and resubmit the claim.

2. Wrong secondary diagnosis:

More from the LCD L35424 Chiropractic Services:

Covered diagnoses are displayed in four groups in this policy, with the groups being displayed in ascending specificity. Medicare does not expect that substantially more than the following numbers of treatments will usually be required:

  • Twelve (12) chiropractic manipulation treatments for Group A diagnoses.
  • Eighteen (18) chiropractic manipulation treatments for Group B diagnoses.
  • Twenty-four (24) chiropractic manipulation treatments for Group C diagnoses.
  • Thirty (30) chiropractic manipulation treatments for Group D diagnoses.

FIX: This fix has two parts. First, double-check that your second diagnosis is one from the approved list published by Novitas. The list can be found here: Novitas LCD L35424

Next, make sure the patient hasn’t gone over the visit limit for the diagnosis. Notice that some diagnosis codes are valid for up to 12, 18, 24 and even 30 visits. If the patient has gone over the visit limit for a particular diagnosis, the doctor may review the documentation to be sure the correct diagnosis was reported. If not, a change can be made and a new “corrected” claim may be submitted.

3. Not enough diagnosis for the CPT code reported

Medicare only covers manipulation of the spine for chiropractic services. This should be reported on the claim using one of  the CPT codes:
  • 98940, 1-2 regions
  • 98941, 3-4 regions
  • 98942, 5 regions

As seen in steps 1 and 2, each claim must have at least a primary and a secondary diagnosis from the published list provided by Novitas. However, be aware that this is not just a primary and secondary per claim, but for each region. 

NOTICE that the CPT 98940 represents CMT provided to 1-2 regions. This means that if the provider delivered a CMT to “one” region, the claim would require only two diagnosis; a primary which defines the region of subluxation and a secondary which defines the problem that exists as a result of the subluxation. But if “two” regions were manipulated, then a total of four diagnosis are required. They would be listed on the claim form in the order of Primary/secondary (first region), then, Primary/secondary (second region). Likewise, 98941, 3-4 regions, would require six to eight diagnosis codes depending on the number of levels adjusted while using the same primary/secondary ordering for each region. The 98942, 5 regions, requires ten diagnosis codes listed on the claim form in the same primary/secondary, primary/secondary... for all five regions.

FIX: Make sure that the number of diagnosis codes reported on the claim are appropriate for the CPT reported. If not, correct the diagnosis and resend the claim.

4. Wrong Modifier:

The Balanced Budget Act of 1997 required that HCFA, now CMS, develop utilization guidelines for chiropractic care. In developing such guidelines, modifiers were also developed to ensure proper payments for chiropractic services.  As a result, the AT must be appended to each claim if the treatment qualifies for active care.

The LCD states:

Notice: It is not appropriate to bill Medicare for services that are not covered (as described by this entire LCD) as if they are covered. When billing for non-covered services, use the appropriate modifier.

Associated Information

Documentation Requirements

  1. For Medicare purposes, a chiropractor must place an AT modifier on a claim when providing active/corrective treatment to treat acute or chronic subluxation. 
  2. The AT modifier must not be placed on the claim when maintenance therapy has been provided. Claims without the AT modifier will be considered as maintenance therapy and denied. Chiropractors who give or receive from beneficiaries an ABN shall follow the instructions in Pub. 100-04, Medicare Claims Processing Manual, chapter 23, section and include a GA (or in rare instances a GZ) modifier on the claim. (emphasis added)

FIX: Review the claim to verify that the proper modifier was placed on the claim. 

  • If the patient was treated for active care, the AT modifier should be on the claim. 
  • If the patient was treated for maintenance care and they signed an ABN, the GA modifier should be on the claim. However, placing the GA on the claim will result in a denial of payment as “maintenance care” is not considered medically necessary.

If no modifier was on the claim or the wrong modifier was appended, simply correct and resubmit the claim.

See Novitas’ list of ABN modifiers at this link.

5. More Than 30 Visits in a Year, or  

6. More Than 12 Visits in a Calendar Month

Reasons 5 and 6, number of visits in a calendar year and month, will be answered together. Novitas has placed visit limits on chiropractic care even though neither the actual federal law nor the NCD, National Coverage Determination, permits such limits. 

In fact, the current LCD, L35424 states, “This LCD supplements but does not replace, modify or supersede existing Medicare applicable National Coverage Determinations (NCDs) or payment policy rules and regulations for chiropractic services.” Clearly, they have not actually read the NCD or federal rules. None the less, Novitas has imposed a visit limit which frequently causes claim denial.

FIX: This fix is fairly easy; make sure the patient hasn’t gone over the monthly or yearly visit max. It is notable that in at least eight months of any given year, a patient runs the risk of going over the monthly max of 12 visits, if they are being treated three times a week or more. Knowing this, it is important that staff and doctors are ready with the ABN on such occasions. Remember to have the patient sign it - before the treatment is rendered.

A sub-question with this scenario is often, “what do I collect when Medicare won’t cover the service?” The answer can be found in the Medicare Claims Processing Manual, 50.13 – Collection of Funds and Refunds. This section of the manual explains that once the ABN is signed, the staff is free to collect for the full amount of the provider’s usual and customary fee for the the non-covered service. This means that the provider is NOT obligated to “allowed amount” or “limiting charge” as with a “covered service.” With a properly signed ABN, the claim would then be billed with the GA modifier for that visit. 

7. Date of First Consult is Older Than 90 Days

This is really a lack of understanding of patient management from the Medicare carrier’s point of view. 

To answer this why this occurs, let’s look at the both the LCD and a recent report from the OIG, “HUNDREDS OF MILLIONS IN MEDICARE PAYMENTS FOR CHIROPRACTIC SERVICES DID NOT COMPLY WITH MEDICARE REQUIREMENTS”.

In the OIG report that stated an 82% payment error rate for chiropractic services, it gave this as an example:

The chiropractors submitted claims for all 105 services with the AT modifier and initial treatment date, indicating that the services were for active/corrective treatment for subluxation and all documentation required by Medicare was being maintained on file. However, the documentation provided by the chiropractors for 94 services did not support the medical necessity of the services; 37 of these services had more than 90 days (approximately 3 months) between the date of initial treatment and the date of service, which may indicate that the services were maintenance therapy. (Emphasis added)

FIX: As we can see from this OIG report, Active care (AT) for both acute and chronic conditions should be concluded within ninety days. A full 90 days is a fairly long treatment plan if the patient is being seen three times per week. As such, the functional improvement that carriers are looking for, is not hard to document.

The reader may be saying: “but I don’t treat three times a week,” or “the patient condition didn’t require three times per week”. What ever your treatment philosophy, keep in mind:
Medicare expects that acute symptoms/signs due to subluxation or acute exacerbation/recurrence of symptoms/signs due to subluxation might be treated vigorously. Improvement in the patient’s symptoms is expected and in order for payment for chiropractic services to continue, should be demonstrated within a time frame consistent with the patient’s clinical presentation. Failure of the patient’s symptoms to improve accordingly or sustained worsening of symptoms should prompt referral of the patient for evaluation and/or treatment by an appropriate practitioner.” LCD L35424 (emphasis added)

With this recommendation from Novitas, providers would do well to hone their patient management skills. When treating a “new” patient, most providers ace this test with the common practice of offering treatment plans consisting of three visits or more per week for a while then gradually lessening the frequency. The conundrum comes when there is an existing patient that is currently being treated returns with worse, or new symptoms. How should that be handled? Should the provider perform an Initial evaluation and change the diagnosis if necessary? Should the provider create a new treatment plan of care? Should the date of first consult be refreshed to indicate the new onset date? Yes, yes and yes!

The Hope

The adage, “an ounce of prevention is worth a pound of cure”, is certainly true! It is better to prevent this form of Medicare payment denial by having clear billing policies and checks and balance procedures. However, if it happens, there is hope of getting paid for the denied services. Simply troubleshoot the claims using the steps outlined-above and re-bill when appropriate.

One final word of caution: this article deals with handling the “not medically necessary” denial from a claims point of view, and NOT from a serious look at the provider’s documentation. Remember, “Medicare requires the medical necessity for each service to be clearly demonstrated in the patient’s medical record.” This means following all the documentation requirements which include everything from the initial history to the treatment plan and goals as described by the LCD L35424.

If uncertainty remains on exactly what documentation is required and you would like a coach, The Collections Coach can help!

  • We offer education such as a $49 One Chart Review (OCR) where we review a file and report back to the provider what is missing for compliant documentation.

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  • We offer a S.M.A.R.T. Chiropractic EHR that is built for compliance and designed for speed. This includes documentation, scheduling, billing and marketing – in one comprehensive system! It comes with FREE training, updates, support and compliance training. All for an amazing $499 start-up and the low subscription fee of $299 per month.

  • Two-day, in-house Profit Rescue (PR) consulting to improve income and decreasing the risk of an audit, $2500 plus travel and lodging.

  • Audit Response Assistance (ARA), $2500 for up to 10 charts. Because we know what auditors are looking for, we help you make a proper response that puts you in the best position for auditors understand that your treatment is medically necessary. Our goal is to help you pass 100% the first time you are audited. If this is not possible on the first pass, the provider is given education and training for compliant documentation and billing.

  • And finally, we offer a comprehensive training Medical Compliance Training (MCT) Certification course, $2900. This is a comprehensive certification course with a special chiropractic add-on where the attendees will not only become familiar with the rules, laws and regulations that govern healthcare but will also build a compliance plan for their own office and will be certified to implement in any physician office, nationwide.