Medicare Denial Management & IPA Billing Guidelines

RCM Topic & Denial Management

Focus: Medicare Overview & IPA/MG Denials

Presentation Agenda

Medicare Overview: Definition & Target Population

RCM Perspective: Coding & Billing Guidelines

Medicare Structuring: Parts A, B, C, & D

Denial Deep Dive: Claims billed to IPA/Medical Groups

Medicare: Overview

Medicare is a US Federal Health Insurance Program administered by CMS (Centers for Medicare & Medicaid Services).

Primary Beneficiaries: • People aged 65 and above • Certain disabled individuals • ESRD (End-Stage Renal Disease) patients

RCM Importance in Medicare

Eligibility Verification: Confirming patient coverage status and benefits prior to service.

Correct Coding: Ensuring diagnosis (ICD-10) and procedure codes accurately reflect services rendered.

Compliance: Strict adherence to Medicare guidelines (NCD/LCD) to prevent audits and takebacks.

Medicare Parts Breakdown

Part A (Hospital Insurance): Inpatient care, Hospital stays, Skilled Nursing Facilities (SNF).

Part B (Medical Insurance): Physician services, Outpatient care, Durable Medical Equipment (DME).

Part C (Medicare Advantage): Managed by private carriers (MCOs) replacing original Medicare.

Part D (Prescription Drugs): Coverage for prescription costs.

Medicare Billing Key Points

Primary Payer: Medicare usually acts as the primary payer unless other specific group coverage exists.

Medical Necessity: Claims must meet specific necessity criteria to be reimbursed.

NCD / LCD: Must follow National and Local Coverage Determinations.

Denial Topic: IPA/MG Billing

WHAT: Understanding the Denial Scenario

This denial occurs when a claim is incorrectly billed to the health plan directly, while the provider is contracted under an IPA (Independent Practice Association) or Medical Group. The financial responsibility lies with the IPA/MG.

WHY: Reason for Denial

Capitation Agreement: The provider is under a capitation model where payment is a fixed amount per patient per unit of time, not fee-for-service from the main payer.

Incorrect Routing: The billing entity selected was the Insurance Payer instead of the Delegated Group (IPA).

Result: Payer denies liability and redirects the claim to the IPA/MG.

HOW: Resolution Steps

Identify Correct Group: Check eligibility response or patient card for IPA / Medical Group info.

Verify Contracts: Ensure the provider is participating with the specific IPA.

Re-Bill: Submit the claim directly to the IPA/MG claims address/Payer ID.

System Update: Update the patient demographics to prevent future routing errors.

Denial Codes (CARC & RARC)

CARC 24: Charges are covered under a capitation agreement.

CARC 96: Non-covered charge (often used with RARC).

RARC N95: Provider must bill IPA/MG.

Key Takeaways & Q&A

Differentiation: Medicare is government insurance; Medicare Advantage (Part C) is private.

Delegated Authority: IPA/MG manages claims under specific contracts (Risk/Capitation).

Prevention: Always verify eligibility and identify the correct billing entity before submission.