CMS resumes testing, plans to implement edits related to provider-based services

CMS has resumed testing of the activation of systematic validation edits for outpatient providers with multiple service locations, according to MLN Matters SE19007. After postponing testing during the public health emergency (PHE), the agency conducted a fifth round of tests in May and revealed it is moving forward with the full production implementation of these edits.

CMS said it conducted these recent tests to ensure providers have used the new practice location screen tool, made necessary claims submissions system updates, and were prepared for implementation of the edits after the PHE.

In 2017, CMS outlined billing requirements for outpatient providers who submit claims for services rendered at a hospital outpatient provider-based department (HOPD) in a different payment locality than the main billing provider address in Chapter 1, Section 170 of the Medicare Claims Processing Manual.

All practice locations must be identified on the CMS 855A enrollment form and entered into the Provider Enrollment, Chain, and Ownership System (PECOS), according to CMS. In addition, modifier -PO (excepted service provided at an HOPD) or -PN (non-excepted service provided at an HOPD) must be present on all service lines with HCPCS codes when the service facility address is present.

To ensure that providers are adhering to these requirements, CMS introduced the following Fiscal Intermediary Standard System edits, which identify reasons for claim submission errors:

• 34977, claim service facility address doesn’t match provider practice file address
• 34978, off-campus provider claim line that contains a HCPCS code must have a modifier -PN or a -PO

The overall claim volume for these edits trended downward during round five testing, and no new significant issues were identified, according to CMS.

CMS conducted the first national trials in July 2018 to test the system edits in production environments. The agency temporarily activated the edits during the first round of testing to identify any issues in reporting and billing services provided in HOPDs. These initial tests revealed that many providers were not sending the exact service facility location on the claim that matched the Medicare-enrolled location based on the information entered into PECOS for their off-campus provider departments.

After providers had time to correct their off-campus provider department location addresses to match their entries in PECOS, CMS conducted a second round of testing in November 2018 and found no significant reporting errors.

The agency conducted the third round of testing in April 2019 to ensure that providers are using the new practice location screen tool available to providers who use the Direct Data Entry System to submit claims and made necessary claim submission system updates.

CMS began deploying the edits into full production on August 1. The agency has asked all Medicare Administrative Contractors to develop implementation plans to permanently the codes on and set them up to Return-to-Provider claims that don’t match.

Providers can make corrections to their service facility address for a claim submitted with editing that reveals the claim has typographical errors that don’t match the official postal address in PECOS, according to CMS. Those who need to add a new practice location that hasn’t been enrolled, or correct an existing practice location address that has changed since initial enrollment, must submit a new 855A enrollment application in PECOS.

Editor’s note: Find more NAHRI resources on coding and documentation here.