The devil is in the details of transmittals

Wednesday, March 11, 2020

by Debbie Mackaman, RHIA, CPCO

It has been relatively quiet lately in terms of announcements and releases from CMS so I thought I would take some time to dissect what appears to be a relatively benign transmittal as a demonstration of how to interpret guidance from transmittals. Connecting the dots in a very complicated revenue system can be quite a challenge.

Interdepartmental communication

Healthcare is a highly regulated industry, and staying up to date with quarterly and annual changes is critical to achieving and maintaining revenue integrity. A few questions any sized healthcare facility or practice should ask itself are who is monitoring the regulatory announcements and what is the operational and financial impact of the changes.

This process should cross departmental lines as different professionals and staff will interpret the regulations from their own perspective— “what’s in it for my department/position or our facility or practice?” For example, patient financial services (PFS) will be focused on operational processes within the billing process while compliance staff will focus on the bigger picture and legal ramifications for the organization.

National coverage determinations (NCD) and transmittals

CMS hosts a comprehensive coverage website called the Medicare Coverage Database where they publish NCDs, local coverage determinations (LCD), and related documents. In particular, NCDs describe national Medicare coverage policy and generally provides the conditions under which an item or service is considered to be covered. Changes to an NCD policy are communicated via transmittals that contain key information that may affect many processes within the revenue cycle.

Keys to interpreting transmittals

Transmittals communicate new or revised policies or procedures, as well as new, deleted, or revised manual language. It is important to pay attention to the date section of transmittals. The effective date listed in the transmittal represents the date of service in which the policy change will begin to apply, unless noted otherwise. Readers should pay close attention as this date may be prior to the date the transmittal was published, which may affect coverage, coding, billing, or payment of services already provided.

Another date that should be considered is the implementation date, which represents the date claims processing systems will be able to handle claims correctly according to the policy changes in the transmittal. The implementation date of a transmittal is generally the first business day of the quarter or year after the transmittal is effective but may be substantially after the effective date. A provider may need to hold claims affected by the transmittal until system changes are implemented.

Transmittals also have a section called the business requirements table that contains specific instructions to CMS contractors for implementation of changes in the transmittal. This section is helpful as it contains more details for providers to use to determine the effect of the transmittal on their claims, including instructions related to reprocessing claims or adjusting claims brought to their attention by providers.

Case study

On February 21, CMS published One-Time Notification Transmittal 2439; we will use this transmittal as an example of how communication is needed across departmental lines to ensure changes are properly implemented. Of note, one-time notification (OTN) transmittals are global in nature and are not tied to a particular substantive manual such as the Benefit Policy Manual or Claims Processing Manual. Regardless, they are equally important as the other operational transmittals.

Transmittal 2439 addresses revisions to codes within the NCDs and is not intended to change the original intent of the NCDs listed in the transmittal’s body. CMS is quick to point out in the transmittal that coding and payment are separate and distinct areas from coverage policies and criteria. CMS also includes a spreadsheet link embedded in the transmittal’s policy section, and all tabs in that spreadsheet should be reviewed with attention to language in red that indicates the change related to the policy. This transmittal lists changes to eight different NCDs; however, for the case study, we will focus on NCD 150.3, Bone Mineral Density Studies.

Medicare pays for a screening bone mass measurement once every two years. Medicare may pay for more frequent tests when medically necessary, such as monitoring a patient who is on long-term glucocorticoid therapy for more than three months. A list of covered diagnosis codes is included in the policy. This transmittal announces that ICD-10-CM diagnosis code Z79.818 (long term [current] use of other agents affecting estrogen receptors and estrogen levels) has been added to the list of covered diagnoses effective January 1, 2020.

I am pointing out the addition of the diagnosis code for two reasons. The obvious one is the addition of a new diagnosis code to the covered list. This information should be shared with staff who are involved in the medical necessity screening process. This may include the ordering practitioner, registration, imaging department, coding, PFS department, and denials prevention. The other issue to consider is that this transmittal was released on February 21 but diagnosis code Z79.818 was covered for dates of service beginning on January 1, 2020. This may mean that a facility has already received denials and the claim will need to be reprocessed for payment. In addition, if the patient signed an advance beneficiary notice (ABN) accepting financial responsibility for services for which Medicare does not pay and this information was correctly reported on the claim using occurrence code 32 (and in certain circumstances, modifier -GA), then the facility may also owe the patient a refund.

Within the business requirements table of the transmittal, CMS indicates who is responsible for correcting any denials associated with the change. It states, “contractors shall adjust any claims processed in error associated with this change request (CR) that are brought to their attention.” In a nutshell, facilities need to find their own denials and resubmit the claims for proper processing. This will not be a step that your MAC will automatically do for you. The implementation date on this particular transmittal for MACs is March 24, so that date is the soonest reprocessing can begin. Going forward, claims reported with Z79.818 should be held until the MAC can process the claims correctly the first time.

The other item CMS has listed in this transmittal is that modifier -XU (unusual non-overlapping service that does not overlap usual components of the main service) will be allowed to bypass any frequency edits. This change will be effective for claims received on or after July 1, 2020, which allows facilities time to prepare for this change through education of the imaging department, coding, and PFS department.

The instruction reads:

  • Attach to procedure 77081 (dual-energy x-ray absorptiometry [DXA], bone density study, 1 or more sites; appendicular skeleton [peripheral] [radius, wrist, heel]) when both 77081 and 77085 (1 or more sites; axial [hips, pelvis, spine] including fracture assessment) are on a claim.
  • Attach to procedure 77080 (1 or more sites; axial skeleton [hips, pelvis, or spine]) when both 77080 and 77081 are on a claim.

Of interest is that back in January 2015, CMS published Special Edition MLN Matters 1503, in which CMS claimed that it would be publishing more guidance and education on EPSU modifiers but never published full information on implementation. Thus, any directions on using these modifiers that are included in transmittals apply only to that specific transmittal.


Healthcare and the processes inherent in capturing revenue that a provider is entitled to are very complex. Interdepartmental communication is critical to achieving revenue integrity and reducing a facility’s operational costs. Looking at just one benign transmittal, you can see that many departments have become involved to ensure that one diagnosis and one modifier are appropriately used for just one type of screening test.

Editor's note: This story originally appeared in Revenue Cycle Advisor on February 27, 2020.

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Revenue Integrity