CMS Releases Billing Instructions For Surgical Never Events

on Tuesday, 23 June 2009. All News Items

On January 15, 2009, the Centers for Medicare & Medicaid Services (CMS) finalized National Coverage Determinations (NCDs) for non-coverage of three surgical “never events.”  Per the NCDs, Medicare will not cover a particular surgery or invasive procedure if:

  1. the wrong procedure is performed on a patient,
  2.  the procedure is performed on the wrong body part, or 
  3.  the procedure is performed on the wrong patient. 

On June 12, 2009, CMS released two transmittals that manualize the determinations, further define related non-covered services, and provide billing instructions. 

The effective date of the transmittals is for discharges and services on or after January 15, 2009, but the implementation date, including availability of the new HCPCS modifiers is July 6, 2009 for Part B claims and October 5, 2009 for Part A claims.  Contractors will not go back and search for erroneously processed claims prior to the implementation dates but will adjust any claims brought to their attention.

Related Services

Medicare will not cover hospitalizations and other services related to these non-covered procedures as defined in the Medicare Benefit Policy Manual, Chapter 1 , Sections 10 and 120 and Chapter 16, Section 180. 

  • Related services do not include performance of the correct procedure
  • All services provided in the operating room when an error occurs are considered related and therefore not covered
  • All providers in the operating room when the error occurs, who could bill individually for their services, are not eligible for payment
  • All related services provided during the same hospitalization in which the error occurred are not covered
  • Following hospital discharge, any reasonable and necessary services are covered regardless of whether they are or are not related to the surgical error.

Billing Instructions – Inpatient Admission

If covered services were provided during the same hospitalization in which a surgical error occurred, the hospital should submit two separate claims: one claim with covered services and procedures unrelated to the erroneous surgery on a Type of Bill (TOB) 11X (except not 110) and another claim with the non-covered services and procedures related to the error on a TOB 110 (no-pay claim).  On the claim for the non-covered services (TOB 110), hospitals should enter one of the following 2-digit surgical error codes in the Remarks field.

  • MX: wrong surgery on patient
  • MY: surgery on wrong body part
  • MZ: surgery on wrong patient

Claims submitted on a TOB 110 with one of the surgical error codes will be denied for payment.

Billing Instructions – Hospital Outpatient

On hospital outpatient claims for services where one of the non-covered surgical events occurred, the hospital should append one of the following applicable HCPCS modifiers to all lines related to the surgical error.

  • PA: surgery on wrong body part
  • PB: surgery on wrong patient
  • PC: wrong surgery on patient

All line-items with one of the above HCPCS modifiers will be denied for payment.

CMS cannot envision a scenario in which HINNs or ABNs could be validly delivered in these NCD cases.  Medicare contractors will maintain a list of surgical error occurrences and will review beneficiary history for other claims potentially related to the surgical error.  If the contractor determines that related services should not have been covered, they will deny payment for the related services and recover overpayments when appropriate. 

Links to the CMS transmittals:

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