Provider Types Affected
All Medicare physicians, providers, and suppliers billing Medicare carriers, durable medical equipment regional carriers (DMERCs), and fiscal intermediaries (FIs)

Provider Action Needed
This Medlearn Matters article is based on information contained in Change Request (CR) 3627, which describes new Centers for Medicare & Medicaid Services (CMS) procedures and specific instructions to Medicare contractors (carriers, intermediaries, and DMERCs) for voiding, canceling, and deleting claims. As a result of these changes, providers should note that some claims they were able to delete in the past will no longer be deleted from Medicare’s systems, but will instead become denied claims.

Background
The Department of Health and Human Services (DHHS) Office of the Inspector General (OIG) has verified instances in which Medicare claims have been voided, canceled, or deleted by Medicare carriers, DMERCs, and FIs. Further, the Medicare contractors have not traditionally maintained an audit trail for the voided, canceled, or deleted claims. The OIG has indicated that Medicare must maintain an audit trail for voided, canceled, and deleted claims.

CMS is therefore implementing requirements for Medicare contractors (carriers/FIs, including DMERCs and regional home health intermediaries (RHHIs)) to:

• Deny or reject claims that do not meet CMS requirements for payment for unacceptable reasons;
• Cancel, void, or delete claims that are unprocessable for acceptable reasons;
• Return as unprocessable claims that meet conditions mentioned below for the return of unprocessable claims; and
• Maintain an audit trail for all canceled, voided, or deleted claims that Medicare systems have processed far enough to have assigned a Claim Control Number (CCN) or Document Control Number (DCN).

Acceptable Claims Deletions
Below is a list of acceptable reasons a Medicare contractor may cancel, delete, or void a claim:

1. The current CMS-1500 form or the current CMS-1450 form is not used.
2. The front and back of the CMS-1500 (12/90) claim form are required on the same sheet and are not submitted that way (claims submitted to carriers only).
3. A breakdown of charges is not provided, i.e., an itemized receipt is missing.
4. Only six line items may be submitted on each CMS-1500 claim form (Part B only).
5. The patient’s address is missing.
6. An internal clerical error was made.
7. The Certificate of Medical Necessity (CMN) was not with the claim (Part B only).
8. The CMN form is incomplete or invalid (Part B only).
9. The name of the store is not on the receipt that includes the price of the item (Part B only).

Unacceptable Claims Deletions
The following are unacceptable reasons for Medicare contractors to void, cancel, or delete claims:

1. A provider notifies the Medicare contractor that claim(s) were billed in error and requests the claim be deleted (carrier claims only).
2. The provider goes into the claims processing system and deletes a claim via any mechanism other than submission of a cancel claim (Type of Bill XX8). Providers may only cancel claims that are not suspended for medical review or have not been subject to previous medical review. (FI claims only)
3. The patient’s name does not match any Health Insurance Claim Number (HICN).
4. A claim meets the criteria to be returned as unprocessable under the incomplete or invalid claims instructions in the Medicare Claims Processing Manual, Chapter 1, Section 80.3.2.ff, which is available at http://www.cms.hhs.gov/Manuals/IOM/list.asp#TopOfPage on the CMS Web site.

 Medicare contractors must deny or reject claims in the above “Unacceptable Claims Deletions” category.

Return as Unprocessable Claims
Medicare contractors may return a claim as unprocessable for the following reasons:

1. Valid procedure codes were not used and/or services are not described (e.g., Item 24D of the CMS-1500) (Part B only).
2. The patient’s HICN is missing, incomplete, or invalid (e.g., Item 1A of the CMS-1500).
3. The provider number is missing or incomplete.
4. No services are identified on the claim.
5. Item 11 (insured policy group or FECA Number) of the CMS-1500 is not completed to indicate whether an insurer primary to Medicare exists (Part B only).
6. The beneficiary’s signature information is missing (Part B only).
7. The ordering physician’s name and/or UPIN are missing/invalid (Items 17 and 17A of the CMS-1500).
8. The place of service code is missing or invalid (Item 24B of the CMS-1500 – Part B only).
9. A charge for each listed service is missing (e.g., Item 24F of the CMS-1500).
10. The days or units are missing (e.g., Item 24G of the CMS-1500).
11. The signature is missing from Item 31 of the CMS-1500 (Part B only).
12. Dates of service are missing or incomplete (Item 24A of the CMS-1500).
13. A valid HICN is on the claim, but the patient’s name does not match the name of the person assigned that HICN.

Summary
In summary, CMS believes the following:

• The problems listed under the “Acceptable Claims Deletions” heading are valid reasons to void/delete/cancel a claim if the Medicare contractor maintains an audit trail; and
• Claims with problems listed under the “Unacceptable Claims Deletions” heading should be denied or rejected by Medicare, and the decision to deny/reject the claim should be recorded in the Medicare contractor’s claims processing system history file.

If a Medicare contractor determines that a claim is unprocessable before the claim enters that contractor’s claims processing system (i.e., the claim processing system did not assign a CCN or DCN to the claim):

• The claim may be denied; and
• The contractor does not have to keep a record of the claim or the deletion.

If a Medicare contractor determines that a claim is unprocessable after the claim enters their claims processing system (i.e., the claim processing system did assign a CCN or DCN to the claim):

• The denied or rejected claim will not be totally deleted from Medicare’s claims processing system. The Medicare contractor must maintain an audit trail for all deleted claims that have entered the claims processing system (i.e., the system assigned a CCN or DCN to the claim).

Implementation
The implementation date for the instruction is October 3, 2005.

Additional Information
For complete details, please see the official instruction issued to your carrier/intermediary regarding this change. That instruction may be viewed by going to http://www.cms.hhs.gov/Transmittals/ on the CMS Web site. From that Web page, look for CR3627 in the CR NUM column on the right, and click on the file for that CR.

If you have any questions, please contact your carrier/intermediary at their toll-free number, which may be found at http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf on the CMS Web site.

Disclaimer
Medlearn Matters articles are prepared as a service to the public and are not intended to grant rights or impose obligations. Medlearn Matters articles may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations, and other interpretive materials for a full and accurate statement of their contents.

For more information, visit the Medlearn Matters Web page at: http://www.cms.hhs.gov/MedlearnMattersArticles/.

Pub. 100-20, Transmittal# 159 , CR# 3627
Medlearn Matters Number: MM 3627 Revised
Related CR Release Date: June 17, 2005
Effective Date: October 1, 2005
Implementation Date: October 3, 2005

Posted: 11/21/2005

CPT codes, descriptions, and other data only are copyright 2005 American Medical Association (or such other date of publication of CPT). All Rights Reserved. Applicable FARS/DFARS Apply.