CMS Pub. 100-06, ch. 6, § 240.2

B3-13322.2

This part of the report provides CMS with:

• Current quarterly data on the results of carrier activity in determining reasonable charges;

• Information on the extent to which claims (real and replicate) are being denied or partially

denied;

• The amount of charges disallowed as a result of carrier claims screening operations; and

• Information on the reasons items are denied and the savings realized.

The carrier reports only data relating to initial claims (real and replicate) actions in Part A of the

report. It does not report data on disposition of informal reviews, hearings, or reopenings of an

initial claim action in Part A. In order to be included in lines 1-7, the allowed amount on a service

must be greater than $0. A claim must be reflected on more than one of lines 2-6 if appropriate.

For example, if one service on a claim is reduced due to a fee schedule, and two services are

reduced due to medical necessity, the carrier counts the claim once on line 2 and once on line 4. It

reports the appropriate dollar amounts on lines 3 and 5.

Covered Charges

Line 1. Total Covered Charges for All Claims - total amount (rounded to the nearest dollar) of

billed charges for covered services on all claims (real and replicate) paid or applied toward the

deductible during the quarter. Claims paid or applied toward deductible are those reported in lines

9, 10, and 13 of the monthly CMS-1565 (CROWD Form B). For those claims in which reasonable

charge/fee schedule reductions are made, the carrier reports the total covered charges prior to such

reductions.

It does not include charges for otherwise covered services that are duplicates of previously

submitted services, or should have been included in previously submitted services (e.g., global

fee/rebundling situations).

Reasonable Charge/Fee Schedule Reductions

Line 2. Number of Claims With Reasonable Charge/Fee Schedule Reductions - number of

claims (real and replicate) reported as paid (claims included under line 9 of the monthly Form B,

applied toward the deductible (claims included under line 10 of the monthly Form B), or approved

outside of Common Working File (CWF) (claims included under line 13 of the monthly Form B)

in which the charges were reduced as a result of reasonable charge determinations or comparisons

to fee schedules.

For provider-based physician claims, the separation of charges for physicians' services and

charges for provider component (institutional) services according to some schedule of charges is

not a reasonable charge reduction. The carrier counts a claim of this type as a reduced claim

only if the submitted charge exceeds the provider billing agreement.

Line 3. Amount of Reduction (in dollars) - total amount (rounded to the nearest whole dollar)

by which the claims (real and replicate) reported in line 2 were reduced as a result of reasonable

charge determinations or fee schedules.

Medical Necessity Reductions

Line 4. Number of Claims with Medical Necessity Reductions - number of claims (real or

replicate) where the carrier reduced the billed charges because of a determination that the level of

service was not medically necessary (i.e., a lower level of service would have sufficed). It

includes cases where the service was reduced because medical review determined that a lesser

service was actually performed.

Line 5. Amount of Reduction (in dollars) - the difference (rounded to the nearest dollar)

between the billed and allowed charges for those covered services included on line 4.

Global Fee/Rebundling Reductions

Line 6. Number of Claims with Global Fee/Rebundling Reductions - the number of claims (real

or replicate) where the charges were reduced because one or more of the services in a global fee

was previously paid. It does not include claims with services denied because they should have

been included in a previously submitted global fee. The carrier reports such claims in line 17.

(See MCM-3, §4630.)

Line 7. Amount of Reduction (in dollars) - the difference (rounded to the nearest dollar) between

the billed and allowed charges for those covered services included on line 6.

Denials

In this section, the carrier reports data for claims (real and replicate) totally or partially denied.

Claims totally denied are claims where it determines the allowed amount to be $0 for all services

billed. Claims partially denied are claims where it determines the allowed amount to be $0 for

some, but not all services.

The carrier does not report transfers of claims to other carriers or Part A intermediaries since these

are not denials. It does not include claims returned to physicians or suppliers because they were

lacking necessary information. (Returns are cases where no attempt was made to develop the

claim.)

It does not report reductions in billed charges where the fee is deemed to have been included in a

global fee, such as postsurgical care. It includes such services only if the allowed amount is $0

(i.e., the service is denied). It reports data for such services reduced to an amount greater than $0

on lines 6 and 7 above.

Line 8. Claims Denied in Full or in Part - the sum of (l) those claims (real and replicate)

reported as denied in full on lines 11 and 14 of the Form B submitted for the three months of the

reporting calendar quarter, plus (2) those claims (real and replicate) reported as paid or applied

toward the deductible in which some charges, but not all, were denied. Claims paid or applied

toward deductible are those reported on lines 9, 10 and 13 of the monthly Form B.

Line 9. Amount Disallowed (in dollars) - the total amount (rounded to the nearest dollar) of

charges disallowed (billed charges for denied services) on the claims (real and replicate) reported

on line 8.

Reason for Denial - On lines 10-18 the carrier enters the number of items denied (column 1), the

amount (rounded to the nearest dollar) disallowed (column 2), and the number of claims

disallowed (column 3).

The items reported in column 1 of this section represent the number of separate items coded by the

carrier which were denied. These items usually relate to a single service, but may also represent

more than one service when multiple occasions of the same type of service are coded as a single

item. Line 19 for column 1 should contain the total number of items denied. Since more than one

item on a claim may be denied, the total on line 19 for items denied (column 1) will usually be

larger than the total number of claims denied in full or in part shown on line 8, column 1.

However, the total money shown in column 2 on line 19 for amount disallowed must equal the

total amount disallowed shown on line 9, column 1.

The carrier shows a claim that contains multiple services, but is denied for only one reason, only

once in column 3 under that reason for denial. However, if a claim is denied for more than one

reason, it shows it under each reason for denial. Therefore, line 19, for the total number of claims

disallowed (column 3), will usually be larger than the number of claims denied in part or full on

line 8 (column 1).

Line 10. Claimant Ineligible - the number of items denied, the related amount (in rounded

dollars) of total charges disallowed, and the number of claims denied because the recipient of

services was ineligible for Part B benefits, or because the services billed were rendered before the

beneficiary's coverage for Part B benefits began, or after coverage was terminated.

Line 11. Filing Limitation Exceeded - the number of items denied, the related amounts (in

rounded dollars) of total charges disallowed, and the number of claims denied because the claim

was filed later than the time limitation on filing claims. (See MCM-3, §3004.)

Line 12. Duplicate Claim - the number of items denied, the related amount (in rounded dollars)

of total charges disallowed, and the number of claims denied because the services billed duplicated

those from previously filed claims. The only denials reported on line 12 are actual duplicate

charges for the same item or service. The carrier does not report denials for duplicate medical

equipment (see line 14) or charges for services which are deemed to be included in a global fee

(see line 17).

Line 13. Services Not Covered - the number of items denied, the related amount (in rounded

dollars) of charges disallowed and the number of claims denied because the services billed are

determined to be excluded from coverage under the SMI program for reasons other than a finding

that the services were not medically necessary. Some examples of services not covered are:

• Services with charges above 62.5 percent of psychiatric charges;

• Services with charges over $1,375 annual psychiatric expenses;

• Services with charges over $100.00 annual therapist expenses;

• First three pints of blood;

• Equipment or services not ordered or prescribed by a physician;

• Manipulation of spine when no X-ray is submitted;

• Services by noncertified labs, nonapproved ambulance services or supplies;

• Nonambulance transportation;

• Services provided by relative/household member;

• Services provided where there is no legal obligation to pay;

• Routine physical check up, immunization shots, prescription drugs, personal comfort items,

eyeglasses, hearing aids, etc.;

• Care outside United States;

• Rental or purchase of DME for inpatients of hospitals or SNFs;

• Service date is before provider's participation effective date or after provider's termination

date;

• Services, supplies, or rental of equipment not needed during a period when the beneficiary

was hospitalized; or

• Ambulance beyond nearest appropriate facility.

Line 14. Services Not Medically Necessary - the number of items denied, the related amount (in

rounded dollars) of charges disallowed and the number of claims denied because it was determined

that the services billed were not medically necessary. Some examples are:

• Ambulance not medically necessary, e.g., transfers between similar hospitals for reasons

other than medical necessity;

• Care for same illness by another attending physician;

• Medical equipment which is not needed for the patient's condition or which continues to be

used after medical necessity has ceased;

• Duplicate medical equipment;

• Services not substantiated as necessary by medical review;

• Vitamins or other injections not considered necessary for patient's diagnosis;

• More than one nursing home visit per month by physician unless medical need is

documented; and

• Manipulation of spine when subluxation is not verified by X-ray.

Line 15. MSP - the number of items denied, the amount (in rounded dollars) of charges

disallowed, and the number of claims denied because it was determined that Medicare should have

been secondary to another payer. (See MCM-3, §§3330-3340.)

Line 16. Missing Information - the number of items denied, the amount (in rounded dollars) of

charges disallowed, and the number of claims denied because the claimant failed to provide

information necessary to process the claim.

Line 17. Global Fee/Rebundling - the number of items denied, the amount (in rounded dollars)

of charges disallowed, and the number of claims denied because the fee was deemed to have been

included in a previously allowed global fee, or a charge for a rebundled set of codes.

Line 18. Other - the number of items denied, the related amount (in rounded dollars) of charges

disallowed, and the number of claims denied for reasons other than those specified on lines 10-16.

Some examples of items to be reported here are:

• Services or rental is billed in advance; and

• Representative payee's form not on file.

Line 19. Total - the total number of items denied, the related amount (in rounded dollars)

disallowed and the number of denied claims reported on lines 10-18.