Incorrect Coding Edits Leads to Medicaid Improper Payments

April 20, 2016 | By Jerry Ashworth | Post a Comment

numbers-and-letters-my-mac-put-1544832Not too long ago, rock singer Bob Seger released a song entitled, “Feel Like a Number,” which highlighted how we are losing out identity as a name and, more often than not, identified simply as a number. Same holds true in the retail world, as clothing items and groceries are scanned in by number using bar codes. As we continue to rely on such codes, it’s important that they are accurate. This leads us to a recent audit by the Department of Health and Human Services related to improper payments in Medicaid related to incorrect coding.

The audit focused on improper payments in Medicaid to healthcare providers. States can use automated claims processing safeguards called “edits” are to prevent these improper payments. The Affordable Care Act required states to implement the Medicaid National Correct Coding Initiative (NCCI) edits by Oct. 1, 2010. Such edits are designed to encourage providers to code correctly by automatically denying fee-for-service Medicaid payments for services that do not meet basic medical or billing standards.

The audit found that the effectiveness of the Medicaid NCCI edits was limited because some states had not fully implemented them and most did not use all of the edits correctly. States’ inconsistent implementation and use of the edits may reduce their ability to promote correct coding by providers and prevent improper Medicaid payments, according to the HHS OIG. In addition, states’ lack of reporting of cost savings estimates, and the limitations of the estimates that were reported, inhibit the Centers for Medicare and Medicaid Service’s (CMS’s) ability to meaningfully estimate national NCCI cost savings.

The OIG recommended that CMS take appropriate action to ensure that states fully implement the NCCI edits and provide technical assistance to states to ensure that they use the NCCI edits correctly. It also urged CMS to issue guidance to states on how to estimate NCCI cost savings and take steps to ensure that states report as required. A huge amount of federal funds are going into the Medicaid program, and it’s critical that these funds are spent wisely. Hopefully, CMS will follow the recommendations to help limit the improper payments.

What is your reaction to this audit? We’d love to hear from you.



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