Updated on: November 28, 2016

Getting Proper Reimbursement for Work Done

Original story posted on: August 15, 2016
We all know how important clinical documentation is to patient care, and from a compliance standpoint, it is also crucial to auditing – but for those dealing with the financial side of healthcare, the importance may translate into reimbursement losses. Let us look at a clinical scenario.

Say an 80-year-old male patient with a history of myeloepithelial carcinoma of the left parotid presents with a new left neck mass, which through fine needle aspiration (FNA) showed carcinoma. The patient underwent a radical resection of the left neck tumor with resection of the overlying skin (5 cm x 2 cm) and deep muscle, along with an adjacent tissue transfer advancement flap closure (flap dimensions 5 cm x 2 cm of neck defect).

Per the pertinent sections of the operational note, “we deepened our incision circumferentially along the ellipse down to the sternocleidomastoid muscle. We then encompassed a small cuff sternocleidomastoid muscle deep to the mass to ensure adequate deep margin and removed the specimen en bloc … we then created adjacent flaps on either side of the 5 cm x 2 cm defect in subcutaneous plane with flap dimensions 5 cm x 2 cm in aggregate. These flaps were advanced over the defect, and then we performed a multilayered closure.”  

What I think may have happened is that the coding staff either didn’t have access to the operative note at the time of coding, or in a rush to meet their daily quota, it didn’t fully read the operative note and therefore coded this case as 11620 (EXCISION, MALIGNANT LESION, SCALP, NECK, HANDS, FEET, GENITALIA; LESION DIAMETER 0.5 CM OR LESS) and 12041 (LAYER CLOSURE OF WOUNDS OF NECK, HANDS, FEET AND/OR EXTERNAL GENITALIA; 2.5 CM OR LESS).

This case then was pulled for an audit by the payer, and you may have already guessed the reason. The reason this claim was flagged by the payer’s system for an audit was because of a National Correct Coding Initiative (NCCI) edit. The primary code would be 11620 and the component code would be 12041. 

For those of you who don’t live, breathe, and die with NCCI edits, this means that 12041 cannot be billed with 11620 (see table below). Per the Centers for Medicare & Medicaid Services (CMS), the purpose of the NCCI procedure-to-procedure (PTP) edits is to prevent improper payment when incorrect code combinations are reported. The NCCI contains one table of edits for physicians/practitioners and one table of edits for outpatient hospital services. 

So what this means is that there are tables out there that have one code in column 1 and one or many codes in column 2. The payer software is set up so that if the system encounters a claim with two codes identified as a pair, it will either flag the chart for review or deny the claim.

Primary Code

Component Code



10140 12031 12032 12034 12035 12036 12037 12041 12042 12044 12045

NCCI Policy Manual

  12046 12047 12051 12052 12053  12054 12055 12056 12057 96405 96406

Chapter IC6 Chapter III G

    Chapter III E

This chart was appealed to the payer with the billed codes 11620 and 12041. The payer denied the claim, noting that it did not meet NCCI standards. An appeal was submitted a second time, and after a second-level review, it was determined that the chart was incorrectly coded and should have been coded as 21558 (RADICAL RESECTION OF TUMOR (EG, MALIGNANT NEOPLASM), SOFT TISSUE OF NECK OR ANTERIOR THORAX; 5CM OR GREATER) and 14040 (ADJACENT TISSUE TRANSFER OR REARRANGEMENT, FOREHEAD, CHEEKS, CHIN, MOUTH, NECK, AXILLAE, GENITALIA, HANDS AND/OR FEET; DEFECT 10SQ CM OR LESS).

The explanation given was this: when lesion excision is of such an extent that closure cannot be accomplished by simple, intermediate, or complex closure, other methodology must be employed. Frequently, adjacent tissue transfer or tissue rearrangement is employed (Z-plasty, W-plasty, flaps, etc.). This family of codes (CPT® codes 14000-14350) involves excision with adjacent tissue transfer and correlates to excision codes. Excision CPT codes (11400-11646) and repair CPT codes (12001-13160) are not to be separately reported when CPT codes 14000-14350 are reported. Skin grafting performed in conjunction with these codes may be separately reported if it is not included in the specific code definition.

In the case of closure of traumatic wounds, these codes are appropriate only when the closure requires the surgeon to develop a specific adjacent tissue transfer; lacerations that coincidentally are approximated using a tissue transfer technique (e.g. Z-plasty, W-plasty) should be reported with the more simple closure code.

In conclusion, there are several lessons to be learned in this case scenario. First, make sure you have the necessary documentation to code a chart. If there is documentation missing, such as an operative report or a pathology report, pend the chart until the documentation is available to correctly process it.

Second, make sure you have a scrubber in your billing system that will catch the NCCI edits the first time, thus avoiding the time-consuming appeals process. Third, make sure that the appeals staff either understands coding or routes the case to the coding department so that they can investigate the codes utilized.

Never leave money on the table, as would have been the case in the above scenario had it bypassed the NCCI edits. I understand that most facilities/practices have a very short turnaround time for billing, some as little as 48hours, but if the case above had not hit the payer edits, it would have reimbursed at a much lower value than the second-level appeal recoding of the case. Always try to optimize your reimbursement by having the right staff, the right protocols, and a claims scrubber to catch edits before the claims go out the door.
Disclaimer: Every reasonable effort was made to ensure the accuracy of this information at the time it was published. However, due to the nature of industry changes over time we cannot guarantee its validity after the year it was published.
Denise M. Nash, MD, CCS, CIM

Denise Nash, MD has more than 20 years of experience in the healthcare industry. In her last position, she served as senior vice president of compliance and education for MiraMed Global Services, and as such she handled all compliance and education needs, including working with external clients. Dr. Nash has worked for the Centers for Medicare & Medicaid Services (CMS) in hospital auditing and has expertise in negotiation and implementation of risk contracting for managed care plans. Dr. Nash is a consultant on coding/compliance audits at physician practices and hospitals, and has worked for insurance plans conducting second- and third-level appeals. Her past experience also included consulting for the Office of the Inspector General of New Hampshire in its Fraud and Abuse Division. Dr. Nash is a member of both the RACmonitor and the ICD10monitor editorial boards.

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