Down-Coded

Claims
Learning Team 1- Lavatus Windom & Michele
Hornick
 What are Down-Coded claims?
The alteration by an insurer or other third-party payer of service
codes for physicians or other health care providers, to those of lesser
complexity, resulting in decreased reimbursement. (The Free
Dictionary, 2015)
The insurer assumes (most likely through a software system) that
when a patient presents with certain diagnoses, the clinical
evaluation can never be more complicated than a certain E/M level,
regardless of the specifics of the individual case. This assumption has
no clinical basis. (Medical Billing and Coding, 2012)
 How are claims Down-Coded?

Most payers like CMS engage Recovery Audit Contractors

(RAC) to review medical records from practices and facilities.
RACs look for billing and coding errors, identify
underpayments and overpayments and recoup overpayments
under part A or B of the Medicare program.
The RACs have the authority to detect and correct
overpayments and underpayments by Congress.
 What happens if your
practice/facility gets Down-coded?

Improper coding could result in incompliance with the CMS guidelines

Significant loss of dollars for healthcare organizations because of
denials from third-party payers and incorrect billing to patients.
Delay in payment for services
Loss of revenue
Penalizes physicians across the board, particularly
those with a sicker, more complex patient mix, and seems designed to
save money. (Medical Billing and Coding, 2012)
 How does the Down-coding
process work?
An RAC retrospectively reviews claims and evaluate if the codes on the
claim were consistent with care, diagnosis and treatments indicated in a
patients medical record.
The determination of these codes are base on criteria from the CMS,
Medicare Program Integrity Manuals, DRG Evaluation Review, ICD-
Coding manual for dates of service on the claim, ICD- Addendums and
Coding Clinics and the UHDDS (Uniform Hospital Discharge Data Set).
Once the reviewing is complete the facility or practice receives a
determination letter outlining what part or if any of it will be paid.
 What happens after the
determination letter is received?

The facility or practice has a certain amount of time to appeal the

decision.
An appeal letter must then be sent to the Recovery Audit
Contractors that justifies the codes listed on the claim.
The appeal must include clinical evidence and federal
justification on why the claim was filed as such.
Provide additional clinical documentation like diagnostic and
other ancillary reports to support the appeal
 How to prevent from getting Down-
Coded?

Physicians must ensure that the medical record supports the

level of services reflected in the claim. (Medical Billing and
Coding, 2012)
Physicians must also not use terms like rule out, possibility,
uncertainty, susceptible or likely in their documentation.
The diagnosis should relatively correspond with the diagnostic
workup, the arrangements for further workup and/or
observation, and the initial therapeutic approach.
 An Example of Down-Coding
84 year old patient is admitted into the hospital displaying:
shortness of breath
Confusion
2-3 + bilateral edema
Diminished lung sounds
Bilateral basilar crackles in the lungs
No use of accessory muscles when breathing
LUE Mass
Pressure ulcer on heel
 An Example of Down-Coding
(Cont.)
Patient has a history of:

heart failure (CHF, A-Fibrillation, CAD, Enlarged

atrial/ventricle)
Pulmonary hypertension
Plural effusion
Hyperlipidemia
Hypercholesterolemia
 An Example of Down-Coding
(Cont.)
Once admitted to the hospital physician orders:
Chest x-ray
Ultrasound
Lab work
Medication for existing heart problems , edema and
antibiotics for POSSIBLE Pneumonia.
Patient began to improve over the next day or two and a second
chest x-ray was done that showed no evidence of pneumonia.
 An Example of Down-Coding
(Cont.)
The patient is treated for her other issues and transferred to a skilled nursing
facility and the claim is sent to the payer.
RAC retrospectively reviews the claim and denies the code for pneumonia (486)
being the secondary diagnosis and changes the primary diagnosis from (291)
Heart Failure & Shock w/ MCC to (292) Heart Failure & Shock w/ CC.
Of course this determination was appealed. A letter was sent to the RAC to
justify the physicians use of the term possible and requesting that they re-
determine our original claim.
Along with the letter more documentation like other reports had to be attached
and the use of supporting rules and regulations were added into the appeal.