7/16/99

Jane Orient, MD
Executive Director
Association of American Physicians and Surgeons, Inc.
1601 N. Tucson Boulevard, Suite 9
Tucson, Arizona 85716-3450

Dear Dr. Orient:

I am writing in response to your letter to Nancy-Ann Min DeParle, Administrator, Health Care Financing Administration (HCFA). My response has been delayed due to internal HCFA discussions concerning the applicability of evaluation and management (E&M) Documentation Guidelines in your specific situations. I apologize for the delay in my response. You raised concerns regarding the review of claims using E&M documentation guidelines.

Medicare contractors review claims to determine if the services billed to the Medicare program were correctly coded and covered, including being reasonable and necessary for the patient's condition. To make these determinations, contractors may review documentation submitted with the claim or in the patient's clinical record. Contractors often refer to local medical review policies or other documentation guidelines when making such determinations. Your question was "May claims be denied on the basis of failure to comply with the 1997 AMA/HCFA E&M Documentation Guidelines, which according to your office have been indefinitely withdrawn?" First, it is important to understand that the documentation guidelines have not been withdrawn. No changes have been made to the status of the documentation guidelines. Our contractors will continue to use both the 1995 and the 1997 E&M Documentation Guidelines depending upon which provides the greatest advantage to the physician when adjudicating claims.

You questioned whether the standards of documentation published in the 1997 documentation guidelines could be applied retroactively to services that were rendered before the guidelines went into effect. Contractors review E&M services for appropriate documentation and medical necessity. Since the documentation guidelines instruct physicians on the appropriate documentation of the elements of an E&M visit that will support the physician' s selection of a given level of service to be billed, it would be inappropriate to apply such guidelines retroactively. However, if the documentation in the clinical record does not support the medical necessity of the services billed the contractor may deny the service as not reasonable and necessary.

You asked". . what recourse do physicians have if carriers deny claims inappropriately?" If a physician believes the claims have been denied incorrectly by the contractor, the physician may file an appeal of the denial with the contractor. Physicians should be aware of their rights to appeal these decisions. The physician may need to submit additional documentation that supports the level of the service billed.

You questioned whether HCFA would apply sanctions to employees or contractors who have a pattern of inappropriate denials or unlawful behavior. Our contractors face annual evaluations of their medical review processes. The Contractor Performance Evaluation (CPE) process validates that the decisions our contractors make regarding the level of care for services billed to the Medicare program are the appropriate decisions. If patterns of inappropriate denials are identified, HCFA requires the contractor to take immediate corrective action. Contractors and their employees who engage in unlawftil activities face a number of severe penalties, including criminal or civil action.

Finally, you questioned "what is the correct E&M code to use for a housecall to a patient who is not homebound but who nevertheless requests the physician to visit? Can you give an authoritative statement the physician may cite in case the carrier challenges him? Or is such a service not covered under Medicare?" The correct Current Procedural Terminology (CPT-4) codes to use for a housecall to a patient who is not homebound are as follows: Home Services- New Patient, 99341-99345; Home Services--Established Patient 99347-99350. These services may be covered by Medicare depending on the clinical condition of the patient. HCFA is currently updating the Medicare Carriers Manual to include the policy and use of these new codes. In the interim, HCFA defers to the American Medical Association CPT description of these codes.

I hope this addresses your concerns regarding the review of E&M services.

Penny Thompson
Director
Program Integrity Group