Catch Me If You Can: Staying Ahead of the RAC Reviews of Untimed Codes

nbeckleyNancy J. Beckley, MS, MBA, CHC

It is great to breathe a great big sign of relief!

No, the RACs have not gone away, but they have finally become operational (rather than informational), and the first targets have been revealed.

Regions C (Connolly Healthcare) and D (HealthDataInsights,) have posted CMS issues to their Web sites for the states in which they have completed the required informational town hall meetings.  Connolly posted seven approved issues earlier this month including the CMS approved automated reviews of outpatient therapy untimed codes.

HDI premiered its new RAC Web site, revealing that they had also been approved by CMS to automatically review outpatient rehab claims, for both Part A and Part B providers on the topic of untimed codes.  At least one rehab target is no longer moving.  This provides an opportunity for every provider that is billing therapy codes to put in place retrospective audits to assess risk, mitigate adverse findings and put in place effective compliance practices.

HDI discusses the approved issue: "When reporting service units for untimed codes (excluding Modifiers -KX, and -59) where the procedure is not defined by a specific timeframe, the provider should enter a 1 in the units bill column per date of service."

No surprises here having untimed codes appear as an approved issue by CMS.  Untimed codes were high on my list of rehab areas in my July 15th RACMonitor article: Likely Outpatient Rehab RAC Targets - Hiding in Plain Sight.   As noted in the article "in the California and New York RAC demonstrations this represented a substantial error rate for speech-language pathology.  This should have been caught in an edit table in the hospital's billing program, and when it missed that edit, it should have been denied at the MAC/FI level - but these billings sneaked through both security systems and were nabbed by the RAC with ease."

Listen Up

Listen up hospitals with outpatient therapy departments, skilled facilities billing Part B services, Rehab Agencies, Comprehensive Outpatient Rehab Facilities (CORFs) and private practice physical therapists, occupational therapists and speech language pathologists.

As you are sleeping peacefully this evening the computers at the RAC are whirling away running outpatient therapy claims through proprietary algorithms to see if those pesky untimed codes have slipped through the security systems of your billing software and sneaked through the gates of the claims edits at the FI or carrier.

Rehab providers are often subject to complex (medical records review) probe reviews that select a certain percentage of claims for review that may or may not extrapolate an error rate to a specified universe of claims.  In the automated reviews no medical records are necessary and the review is a quick crunch of the numbers in a super database looking for untimed codes that are billed in increments of more than one unit.

As noted in my previous article "physical therapy, occupational therapy or speech therapy evaluations may take anywhere from 30 minutes to over an hour, but the reimbursement for the respective therapy evaluation codes of 97001, 97003 and 92506 is not time based, but rather service based.  The evaluation CPT code may only be billed as a unit of 1 on the claim."

Hospitals and other providers often establish therapy billing items in 15 minutes increments based on the line item detail in the charge master (CDM).  It is done this way to demonstrate resource intensity of the service, as well as a measure of staff productivity.  In general an edit table decision algorithm should give direction to bill this out based on rules in the database needed for the various related payer tables.  For example for a physical therapy evaluation there could be four different charge codes:  one reflecting a 15 minute evaluation, another reflecting a 30 minute evaluation, and finally those reflecting a 45 minute and 60 minute evaluation.  The billed charge for each would be incrementally higher, and perhaps even some payer sources may offer incrementally higher reimbursement.  (Hope springs eternal!) This represents a way of billing for an untimed code for a unit of one, but with the charges reflecting the resource intensity of the service.  In the case of Medicare, the reimbursement is based upon the Medicare Physician Fee Schedule for your locality regardless of the amount of time or resource intensity involved in delivering the therapy evaluation service that is billed as an untimed code.  The MPFS calculations are computed on a formula that takes the averages into account.

Both Connolly and HDI list the following CMS references for providers on the Untimed Codes issue approved by CMS:  CMS Pub 100-04, Transmittal 1019, dated 8.3.06, pages 7-11 and CMS Pub 100-04, Ch. 5, § 20.2.