RAC RULES: PRE- AND POST-OP VISITS NO LONGER BUNDLED WITH ANESTHESIA SERVICES

April 5, 2010

Before a Medicare Recovery Audit Contractor (RAC) may send a demand letter or a request for records to a provider, an improper payment “issue” must first be approved and be posted on the RAC’s website. In January of this year, one of the first CMS-approved issues relating to anesthesia appeared on Health Data Insight’s website. HDI is the RAC for Region D, which encompasses Alaska, Arizona, California, Hawaii, Iowa, Idaho, Kansas, Missouri, Montana, North Dakota, Nebraska, Nevada, Oregon, South Dakota, Utah, Washington, Wyoming and three U.S. territories. The New Issue would have bundled almost all pre- and postoperative visits with the anesthesia service, thus:

Under NCCI [National Correct Coding Initiative] Edit rules, the anesthesia care package consists of preoperative evaluation, standard preparation and monitoring services, administration of anesthesia, and post-anesthesia recovery care. Anesthesia CPT codes 00100 to 01999 (except 01996) include Evaluation & Management (E&M) services rendered on the day before anesthesia (pre-operative day), the day of the anesthesia and all post-operative days. CPT code 01996 includes E&M services on the same day as the 01996 service only. Physicians can indicate that E&M services rendered during the anesthesia period are unrelated to the anesthesia procedure by submitting modifiers 24, 25, 57 and/or 59, depending on claim specific circumstances, on the E&M service. Only critical care E&M services are payable during the anesthesia post-operative period. The post-operative period is defined as the day immediately following the anesthesia service and any subsequent days during the same inpatient hospital admission as for the anesthesia service.

The American Society of Anesthesiologists and others quickly protested this overzealous interpretation of the NCCI. It has long been CMS and private payer policy to allow claims for E&M services provided by anesthesiologists pre-and postoperatively. The phrase “anesthesia care package” was RAC invention; there is no global anesthesia service, unlike most surgical services which have a 10- or 90-day “global period” during which E&M services related to the surgery are not separately billable. According to the ASA Relative Value Guide and Medicare policy, the base units for an anesthesia service include the pre-anesthesia evaluation and “indicated post-anesthesia care.” E&M services are a different matter.

We are pleased to advise our readers that HDI has now removed the “anesthesia care package” issue from its website. This means that HDI cannot demand refunds of alleged overpayments based on the bundling of perioperative medical visits with the anesthesia service. (We are aware of one proceeding involving an anesthesia practice in an HDI state that, we believe, no longer has any basis and should be halted.)

None of the other RACs adopted HDI’s lead in posting the “anesthesia care package” issue, once CMS had approved it. Now that CMS has withdrawn its approval and has instructed HDI to remove the issue from its site, it is unlikely that those RACs – Diversified Collection Services, CGI Federal and Connolly Healthcare -- will attempt to bundle the E&M codes with the anesthesia codes.

This type of misstep seems inevitable given that CMS allows the RACs considerable creativity in identifying new overpayment or underpayment issues for which to seek CMS approval. Moreover, the RAC program seeks to prevent fraud and abuse by giving the contractors a percentage of the overpayments collected, and by not educating physicians about problem billing. In response to this e-mailed suggestion: “Tell physicians what the problem areas are and give them a chance to fix the problem rather than letting the RACs use secret algorithms -- that may or may not be based on payment rules; is anyone going to check? -- simply to nail or hassle the physicians,” the RAC office sent the following:

CMS does not give the RACs detailed steps and/or algorithms to identify which claims to deny. We only give them access to CMS manuals, the CMS coverage database and instruct them to review OIG and GAO reports. All of these resources are available to the public. The RAC will utilize all the resources listed above to identify possible new issues for review. Once a possible new issue is identified by the RAC, it must be approved by CMS. If approved, the RAC will then run the paid claims data provided by CMS through data analysis techniques to identify those claims that are most likely to contain improper payments. Data analysis techniques involve comparing claim information and other related data (e.g., the provider registry) to identify potential errors by claim characteristics (e.g., diagnoses, procedures, providers, or beneficiaries) individually or in the aggregate. The new issue must be posted to the RACs website prior to widespread review. Thank you.

It is up to physician practices, therefore, to keep up with changes in Medicare payment policy and enforcement activities to immunize themselves against possible RAC audits. In his article “Recovery Audit Contractors (RACs) Are Here to Stay” that appears in the April issue of the ASA Newsletter, Jason Byrd, JD lists a number of websites that anesthesiologists should consult periodically. The first and most important such website is your own RAC’s website. As Mr. Byrd states, “Each RAC is different in the issues it will review – know your RAC’s issues (but be cognizant of other RACs’ issues as they may come to your RAC in the future.”

Speaking of informational resources, we note with interest that the Medicare Learning Network video is now playing on CMS' You Tube channel. This video provides you with a rather basic introduction to the Medicare Learning Network as well as other information and education that CMS offers to Medicare fee-for-service providers. Should we be thinking about You Tube channels for anesthesia practice management information?

With best wishes,

Tony Mira
President and CEO

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