Medicare Moves Forward with Phase III for Fraud Edit Module

In April 2009, the Centers for Medicare & Medicaid Services (CMS) will implement a Fraud Edit Module that will allow claims payment and program safeguard contractors to create on-the-fly edits to immediate address fraud on a national level while leveraging the experience of individual states and regions. An analysis phase will start in January 2009 with final implementation of the system, April 6.

The impetus for the Fraud Edit Module stemmed from the development cost faced by carriers to create a system to deny claims with potentially improper payments associated with Infusion therapy. Implementing an edit system in Florida, Michigan, New Jersey, and New York resulted in over $10 million in savings but at substantial cost to the claims payment contractors.

As a fraud moves from state to state, a low-cost way to share and implement edits was key. The CMS convened a Fraud Edit Module workgroup to develop requirements for a proactive Fraud Edit Module that would allow Medicare Carrier System users to implement onthe-fly edits when potentially fraudulent claims are found locally or nationally. Additionally the edit module could be used in other payment systems including the Fiscal Intermediary Shared System and VIPS Medicare System.

The module will allow the creation of edits based on the following:

Dimension  the criteria that allow the user to select a specific group of claim lines for further editing:

Measure  the criteria that users may set to reject the claim:

In the absence of more specific reason, adjustment, MSN and remarks codes more appropriate to the edit situation (e.g., "the procedure/revenue code is inconsistent with the patient's gender;" "the diagnosis is inconsistent with the procedure," "this (these) diagnosis (diagnoses) (is) are not covered, missing or are invalid"), for claim lines denied, contractors shall use

Reason Code: M79: Missing/incomplete/invalid charge. Note: (Modified 2/28/03)
Claim Adjustment Reason Code: A1: Claim/service denied.
Remark code: CO: Provider Responsibility
MSN: 21.6 - This item or service is not covered when performed, referred or ordered by this provider.

While contractors can share their edits with CMS by sending the edits on CDROM to the Central Office, It is not clear if these edits will be made public by CMS or the contractors.

Dr. Carter's Corner
Darren Carter, MD, founder and President of Provistas, has a personal commitment to alleviating uncertainties in the health compliance environment. He has authored dozens of articles, presents to professional and hospital associations, serves on several editorial boards, and provides consulting and expert witness testimony.

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