Medicare Reporting Update: Coding is King

Medicare Reporting Update: Coding is King

***NEWSLETTER***

"This blog post is intended solely for educational and informational purposes and does not constitute legal advice. The content herein should not be relied upon as a substitute for professional legal consultation. Reading this post does not create an attorney-client relationship with The Lien Project, PC or any of its attorneys. For personalized legal guidance, please consult The Lien Project, PC."

Diagnostic codes can influence several major aspects of personal injury litigation, including liability carriers’ claims valuations, Medicare’s reimbursement demands, and Medicare’s willingness to cover future care.

These issues are of escalating importance, as we are seeing increasing signs of new Medicare procedures relating to injury claims. Medicare has massively increased its budget for contractors who process liability and reimbursement issues. U.S. Attorneys’ offices are actively investigating and charging plaintiff’s firms for failure to comply with the Medicare Secondary Payer Act.

CMS continues to roll out changes to the mandated reporting system under the Medicare and Medicaid SCHIP Extension Act of 2007 (MMSEA). This is the process by which carriers report claims and payments to CMS. CMS uses this data to process its secondary payer liens for conditional payments and to determine potential denial of future claims.

Claims Valuations and Denials of Future Care

Coding remains the driving factor in how carriers value personal injury claims. We strongly advocate that plaintiffs determine the correct ICD-10 diagnostic codes for their claimed injuries and include them in initial representation letters, demand packages, discovery responses, and CMS reporting.

There is enough variation in diagnostic coding to meaningfully affect how liability carriers' algorithms assign value to a claim. Allowing the carrier to choose the codes is, at a minimum, a missed opportunity to maximize your client’s recovery.

However, if incorrect or overly broad codes are reported to CMS at settlement, it may create significant problems for the plaintiff down the line—particularly regarding Medicare Set-Asides or future claim denials.

Medicare Reimbursement and Denial of Future Care

It’s not unusual to assert an injury at the beginning of a case and later determine it is not causally related. When that happens, it is important that this change be communicated to CMS by both plaintiff’s counsel and the liability carrier during the settlement process.

We frequently see liability carriers continue to report the original ICD-10 codes—those submitted when the claim was opened—during their settlement reporting. This can result in CMS assigning conditional payments or LMSA responsibility to the beneficiary for injuries that were ultimately withdrawn or excluded. The fallout for the plaintiff can be serious. A signed release gives the carrier no further incentive to assist in correcting the error, and the client often turns to their counsel for help resolving the issue.

Timing only compounds the problem. Settlements are generally paid and disbursed quickly, but CMS data is reported quarterly. By the time CMS processes the carrier’s submission and issues a demand letter—sometimes for repayment of past care or notice of future denial—it could be six months or more after the settlement has closed. We’ve seen these issues arise years after a file was closed and archived.

The best time to address potential problems is during settlement and disbursement. That includes documenting efforts to fully inform and advise the client about CMS’s interests, both past and future. Including specific ICD-10 codes in the settlement documentation—particularly for injuries being paid for—is one way to reduce risk. But this can be difficult if the carrier or defense counsel is uncooperative.

Evolving Medicare Coding Procedures

On August 13, 2020, CMS held a “town hall” focused on Non-Group Health Plan (NGHP) reporting under Section 111. An NGHP reporting entity includes all carriers providing medical coverage. CMS emphasized the need for accurate and relevant claims data, including the directive: “Only report relevant injury information… You should not report diagnosis codes for pre-existing conditions.” They also made it clear that “Accurate reporting of diagnosis codes is critical for accurate recovery.”

Most notably, CMS introduced a default diagnostic code—“NOINJ”—to be used when a settlement releases medical claims but involves no associated injury or medical treatment. The example provided was a loss of consortium claim. However, “NOINJ” may also be appropriate in wrongful death cases, where:

• The decedent’s past medical expenses are not legally recoverable, and
• The claimant received no related medical treatment.

The CMS slideshow from that presentation details how the “NOINJ” designation should be inputted in specific data fields. We have started including this coding detail in settlement language where appropriate.

Of course, some plaintiff attorneys may be hesitant to advise their clients on Medicare rights and responsibilities—especially future care implications—believing it falls outside the scope of their engagement. That may be true, but as we all know, clients rarely make that distinction. When CMS sends a notice demanding repayment or denying coverage, they won’t call CMS. They’ll call you.

That’s why it’s critical to get these issues addressed early, during the settlement process. It protects your client, protects your file, and helps avoid messy problems that can surface months or years later.

Explore More Resources with Lien Project Network

For a deeper dive into lien resolution strategies, settlement planning, and reimbursement challenges, explore our educational modules. Lien Project Network serves as a trusted resource for plaintiff attorneys, providing insights on financial planning, public benefits, and structured settlements in the context of lien management.

Need Assistance? Work With The Lien Project, PC

If you need expert legal assistance in navigating lien resolution, reimbursement claims, or settlement planning, our team at The Lien Project, PC is ready to help. As an LPN member, you earn credits that can be applied toward lien reduction and resolution services provided by The Lien Project, PC, allowing you to offset up to $900 per year. Your investment in continuing education through Lien Project Network not only enhances your lien resolution skills but also reduces the cost of engaging legal experts when needed.

Schedule a Consult today to see how we can help maximize your client’s recovery.