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ASA convinces Region D Recovery Audit Contractor (RAC) to discontinue its Anesthesia Care Package E&M Services Automated Review

Chicago — (April 14, 2010) 

After a somewhat controversial demonstration program in a handful of states, the Medicare program established a nationwide Recovery Audit Contractor (RAC) network on January 1 to identify and correct inaccurate payments from the government to all types of Medicare providers. The ASA has been monitoring the RACs closely to assure that they are following federal guidelines and treating our members fairly. This effort has already paid off, as we successfully resolved an anesthesia recoupment effort with one of the RACs just this week. Here are the details.

In early January 2010, Health Data Insights (HDI), the Recovery Audit Contractor (RAC) for Region D (Alaska, Arizona, California, Hawaii, Iowa, Idaho, Kansas, Missouri, Montana, North Dakota, Nebraska, Nevada, Oregon, South Dakota, Utah,  Washington and Wyoming), posted notice on its Web site that it intended to review claims where an anesthesia code and an Evaluation and Management (E&M) code were reported by the same provider within a specific date range. The Web site posting was as follows:

Anesthesia Care Package E&M Services. Under NCCI 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 cited sources were the National Correct Coding Initiative (NCCI) manual and Chapter 12, Section 50 of the Centers for Medicare and Medicaid Services (CMS) Claims Processing Manual. The approval date listed was November 11, 2009, and
the review applied to claims paid on or after October 1, 2007. HDI stated that it would use an automated review process.

We believe that HDI intended to look for instances where providers were inappropriately separately reporting the typical pre‐ or post‐anesthesia work covered by the base unit value assigned to an anesthesia code. HDI’s use of automated review (where the RAC can simply recoup payments based on a review that shows an anesthesia code and an E&M code were reported within a specified date range) cannot recognize those circumstances where the E&M represents an appropriately reported service such as a visit for post‐op pain follow up. That can only be accomplished through complex review where the RAC must request and review records.

ASA contacted HDI in January to raise our concerns about this RAC issue. We disagreed with HDI’s interpretation of how the NCCI edits pairing anesthesia and E&M should be applied. NCCI edits are applicable when services are performed by the same provider on the same patient on the same date of service. This would not preclude reporting of an E&M on the day before or after an anesthesia service as long as the E&M was not for the pre‐ or post‐anesthesia care that is part of the base unit value assigned to the anesthesia code. If that criterion is met, there is no need for a modifier as HDI stated. Furthermore, the globalconcept does not apply to anesthesia codes so reviews cannot be based on that concept.

It may be appropriate for an anesthesiologist to report an E&M that is not the typical pre‐anesthesia exam/evaluation on a day before the surgical procedure. An example is a request from the surgeon for the anesthesiologist to make recommendations on preparing/optimizing the patient in advance of a possible surgical procedure. This is not something that happens frequently, but it does happen.

ASA requested the source for the statement, “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.” This statement is not accurate and should not be used as the basis of a RAC review.

When an anesthesiologist rounds on a patient to follow up on a post‐op pain procedure (this is not the usual post‐anesthesia follow up), s/he will use an E&M code that corresponds to the location and level of the service. A frequent example of this reporting pattern is when the patient undergoes a total knee replacement under general anesthesia. If the anesthesiologist places a continuous femoral block to provide post‐op pain control (in this circumstance, placement of the block is separately reportable from the anesthesia service per CMS), any medically necessary follow up for the block on a subsequent day is reported with an E&M code since this block has a zero day global period.

ASA also expressed concerns that HDI prepared demand letters dated January 14, 2010, but such letters were not postmarked until February 9, 2010. Since a provider has 30 days from the date of the demand letter in which to file an appeal request andavoid recoupment during the appeal process, this delay deprived our members of many of their rights. Many of our members have reported having payments recouped since they did not receive timely notification. Representatives from ASA and HDI met via conference call on March 3, 2010. After hearing our concerns, HDI representatives stated that:

• HDI will research proper use of modifiers per the information we provided.
• No new files will be sent for review while they look into this matter, but any letters in process will be sent to providers.
• In the event that HDI sees that this target is flawed and needs to be restructured so as to meet its stated goal of uncovering anesthesia unbundling without impacting providers who are legitimately reporting E&M codes, providers will receive re‐payment of the recouped funds.
• HDI informed ASA that the delay in sending the letters was due to incomplete information they received from contractors. Specifically, a file they received did not contain complete provider contact information; in another instance, the contractor did not send HDI all the needed files.
• HDI expected to have resolution for ASA within a week, but did note that they will require approval from CMS.

ASA followed up with HDI over the next several weeks. We also raised the matter at a meeting of the Practicing Physicians Advisory Council. PPAC is charged with advising HHS and CMS on proposed changes in regulatory matters and instructions CMS issues to its contractors through its carrier manuals. Finally, ASA has had several discussions with CMS staff on this issue.

In early April, without any comment, HDI removed the issue from its Web site. ASA continued its push for full resolution. We urged HDI to promptly refund the money that they recouped from our members. There were two important factors at hand:
process and timing. Physicians and other providers should not have to use a time consuming and labor intensive appeal process to get back money that should not have been taken from them in the first place. The other issue was time. The appeal clock started ticking on January 14 – the date of the letters – even though HDI did not mail the letters until February 9. Appeals must be filed within 120 days of the date of the letter. HDI stated in our March 3 call that if their review process was flawed, the recouped money would be automatically returned.

During our April 7 contact with HDI, an HDI staffer informed ASA that we should expect to receive a response to our concerns on Tuesday, April 13.

We are pleased to report that we have received that notice. As a result of ASA’s discussions with HDI about our concerns over this issue, HDI will enact the following revisions to its review:

1. Automated review will continue to identify improper payments for E&M Services rendered the day of Anesthesia Services (CPT codes 00100 to 01999).
2. Findings will include services rendered by the same individual Practitioner as well as services rendered by another member of the same group practice (based on Tax ID#) and of the same provider specialty.
3. Automated review for E&M services not rendered on the day of Anesthesia Services (i.e., preop and postop days) were discontinued on March 6, 2010. Consideration of Complex Review audits for preand postoperative day
anesthesia services will be considered based on additional analysis of the Region D CMS Claims Data and workload priorities.
4. Accordingly, the preoperative and postoperative day E&M lines submitted by HDI to Claims Processing Contractors (CPC) for adjustment under this New Issue are being reversed. Any adjustments made by the CPC for services other than those preop and postop day E&M services should be addressed with the CPC.

ASA wants our members to take note that HDI may propose this issue for Complex Review where the RAC must request and review records. We remind our members that the base unit value assigned to each anesthesia code includes the typical preand
postanesthesia evaluations. That work should not be separately reported either on the day of the anesthesia service or on a
preceding or subsequent date. We also remind our members that documentation of an E&M service should clearly support the level of service and establish the reason for the encounter.

We appreciate HDI’s and CMS’s willingness to hear our views and the actions they have taken on this matter.


Founded in 1905, the American Society of Anesthesiologists (ASA) is an educational, research and scientific society with more than 52,000 members organized to raise and maintain the standards of the medical practice of anesthesiology. ASA is committed to ensuring physician anesthesiologists evaluate and supervise the medical care of patients before, during and after surgery to provide the highest quality and safest care every patient deserves.

For more information on the field of anesthesiology, visit the American Society of Anesthesiologists online at . To learn more about the role physician anesthesiologists play in ensuring patient safety, visit Like ASA on Facebook , follow ASALifeline on Twitter and follow ASA on LinkedIn .



American Society of Anesthesiologists