June 20, 2011

RACs Find Errors on Professional Claims for Technical Component of Radiology

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wiitalaRAccording to the Centers for Medicare & Medicaid Services, Recovery Auditor Contractors are adjusting claims to align provider payments with Medicare guidelines related to the technical component (TC) of radiology services.

Specifically, Medicare Part B contractors do not directly pay suppliers and physicians for the TC of radiology services furnished in inpatient and outpatient settings of hospitals that are paid under the inpatient prospective payment system (IPPS) or outpatient PPS (OPPS).  That information and other insight can be found in the April issue of the "Medicare Quarterly Provider Compliance Newsletter."

Radiology suppliers that render non-physician outpatient services during inpatient stays must bill the PPS hospitals, not the Medicare carriers, for those services. Radiology professional services furnished to hospital outpatients are paid to the hospital under the OPPS.

Under the IPPS, Medicare contractors reimburse acute-care hospitals (but not critical access hospitals) a predetermined amount for services furnished to patients based on their illnesses and their classifications under diagnosis-related groups (DRGs).

This bundled payment covers non-physician outpatient services that Medicare beneficiaries receive during an inpatient stay, which include radiology services, such as tomography scans, furnished to inpatients by a physician's office, another hospital, or a radiology clinic. Radiology services for beneficiaries in a hospital inpatient stay are part of the hospital bundled payment.

CMS provided the following example of how things work.

An 80-year-old female was admitted to an inpatient hospital stay on January 24, 2010, and discharged on February 8, 2010. A physician billed CPT code 71010 (chest x-ray) for the date of service (DOS) of January 26. This code has a professional component/technical component (PC/TC) indicator of 1 with a global allowed amount of $23.73 and a paid amount of $18.98. The DOS occurred during the inpatient hospital stay, and data analysis confirmed that the patient was not on leave-of-absence from the hospital on that date. The TC portion of this code was only payable to the facility while the patient is in an inpatient setting.

Code 71010 was adjusted to pay only for the PC portion, by applying modifier 26 to the claim. The allowed amount for 71010 with modifier 26 was $9.03. The new provider-paid amount was $7.22. This resulted in a total recouped amount of $11.76.

For more information about the above, go to page 12 of the document located at http://www.cms.gov/MLNProducts/downloads/MedQtrlyComp_Newsletter_ICN903696.pdf. At the end of the summary, you will find numerous references for more guidance on the parameters around which the TC of radiology services furnished to hospital patients.

About the Author

Randy Wiitala, BS, MT (ASCP) is a senior healthcare consultant with Medical Learning, Inc. (MedLearn), St. Paul, MN. MedLearn is a nationally recognized expert in healthcare compliance and reimbursement. Founded in 1991, MedLearn delivers actionable answers that will equip healthcare organizations with their coding, chargemaster, reimbursement management and RAC solutions.

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rwiitala@medlearn.com

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Randy Wiitala, BS, MT (ASCP)

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