Some Medicare Claims Denials for Outpatient Psychotherapy Services May Be Off-Base, Compliance Officer Tells AIS Newsletter

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Hospitals should challenge claims denials related to outpatient psychotherapy services, a compliance officer advises in the Feb. 2 issue of Atlantic Information Services’s Report on Medicare Compliance.

Hospitals should challenge any upcoming prepayment audits of outpatient psychotherapy, advises a compliance officer in the Feb. 2 issue of Atlantic Information Services, Inc.’s (AIS) Report on Medicare Compliance (RMC). Some denials are based on outdated Medicare rules, Stephen Gillis, director of compliance coding, billing and audit at Partners HealthCare in Boston, tells RMC, and not challenging them could result in lasting, negative consequences.

The confusion over the denials stems from a four-year-old change in Centers for Medicare and Medicaid Services (CMS) policy, and relatively new codes that took effect in January 2013 when the American Medical Association transformed coding for mental health services. The new CMS policy, which was reiterated in 2011, states that “Nonphysician practitioners may provide the required supervision of services that they may personally furnish in accordance with State law and all additional requirements.” Since January 2014, however, Partners has received a number of Medicare claims denials for services provided by licensed clinical social workers. Among the reasons for the denials were invalid treatment plans, missing credentials, and incomplete or missing documentation, the Medicare administrative contractor (MAC) said.

Appealing the denials “is a lot of work for a little return [on each claim],” Gillis says, whose hospital is in the midst of a review by its MAC. “But if you don’t appeal these, they will continue to show a high error rate and you will continue to be audited.” Not only does writing off charges mean lost revenue, hospitals get a reputation for high denial rates for that service, even if a lot of the denials may not have been justified, he explains.

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About Report on Medicare Compliance
The industry's #1 source of timely news and proven strategies on Medicare compliance, Stark and other big-dollar issues of concern to health care compliance officers, the award-winning Report on Medicare Compliance identifies and provides valuable guidance on dozens of high-risk billing and documentation problems and foreshadows the next moves of federal enforcers and their armies of RAC, ZPIC and MAC auditors. “The best information there is for hospital compliance officers,” the 8-page weekly newsletter includes insights and strategies not available anywhere else.

Since 1992, Report on Medicare Compliance has been written by Nina Youngstrom, who has a reputation for being one of the most knowledgeable journalists and incisive writers in the field. With excellent Contact s at the IG's office and at CMS, and strong relationships among industry experts and compliance officers, each issue of Report on Medicare Compliance contains exclusive, inside news. Visit for more information.

About AIS
Atlantic Information Services, Inc. (AIS) is a publishing and information company that has been serving the health care industry for more than 25 years. It develops highly targeted news, data and strategic information for managers in hospitals, health plans, medical group practices, pharmaceutical companies and other health care organizations. AIS products include print and electronic newsletters, websites, looseleafs, books, strategic reports, databases, webinars and conferences. Learn more at

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