Do it Right the First Time – Medicare Claims Filing Tips

April 23, 2005

The following are some of the most common circumstances that cause Medicare claims to deny, reject or otherwise cause delays in processing. These issues were first reported by the Texas Medicare carrier but should apply to all jurisdictions. The nine items listed below outline the issues and their resolutions. I encourage readers to this e-newsletter to use these items as training tools for their staff and review them with the appropriate associates in their offices.

Tip #1:

Medicare does not accept copies of the CMS 1500 Claim Form for processing. Copies will be returned to the provider unprocessed.

Tip #2:

When required to report a ZIP code in Item 32 of the CMS 1500 Claim Form, providers must enter a valid ZIP code. Failure to do so will result in a rejection.

Tip #3:

Modifier 76 – Repeat procedure by the same physician. Use the 76 modifier when billing for repeated medically necessary procedures or services on the same date of service. Only use this modifier when billing repeat diagnostic tests, multiple purchased diagnostic services, separate evaluation and management visits that occur on the same date of service (only for CPT codes 99211-99215), and any separate encounter of anesthesia services on the same date of service.

Tip #4:

If you receive a yellow Automatic Development System (ADS) letter asking for additional information, it is imperative that you return the original yellow letter with your supplemental information. Failure to return the color-coded letter may result in delays in processing and possible denials of your claim. If you wish to keep a copy of the letter in the patient’s file, make sure that you keep the copy and return the original yellow letter to Medicare. The ADS request letter for each patient should be stapled to each patient’s documentation and returned to Medicare.

Tip #5:

All paper claims are initially processed through the Medicare Optical Character Recognition (OCR) scanner. It is important that you check your cartridge regularly. Light-ink print is often unrecognizable by the OCR system. Using an extremely small font may cause your data to be unrecognized by the scanner. Additionally, regularly check to make certain that the printing of your paper claims aligns all entries within the specific CMS 1500 Claim Form blocks. Information printed outside of the blocks will not be recognized and may cause your claim to deny or reject. Handwritten CMS 1500 Claim Forms cannot be scanned by the optical scanner and must be manually keyed. This could delay the processing or your claim.

Tip #6:

When billing Medicare electronically as the secondary carrier, Medicare does not require that you kick your claims to paper claims. Consult with your electronic vendor or submitter to identify the appropriate electronic records to notify Medicare of the primary payer’s actions.

Tip #7:

Some providers are giving patient’s incomplete CMS 1500 claim forms to submit to Medicare for reimbursement. Incomplete forms are not accepted for processing. It is the provider’s responsibility to submit claims to Medicare for covered services.

Tip #8:

All refunds (voluntary and solicited) must be sent to the Recoveries Department of your Medicare carrier.  A copy of the overpayment letter will assure that refunds are appropriately applied. Unsolicited refunds should include information that identifies the patient’s name, Medicare number, date of service, charge amount and reason for refund. A copy of the Medicare remittance notice along with an explanation will provide the necessary information.

Tip #9:

When Medicare sends a refund request to a provider, the initial letter includes a Financial Control Number (FCN). If funds are not refunded and received within the allotted time frame, the overpayment is offset from future Medicare reimbursements. The FCN number is listed on the remittance voucher to notify providers why monies were offset. Providers should maintain a file of the overpayment letters so that they can properly identify why funds are being offset. Should you not be able to determine why the funds are being offset, you may contact Customer Service and they will forward you a copy of the original overpayment letter. They will be unable to provide you with specific patient information over the telephone.

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