CA Providers: Appeal Denials Based on Defunct MUE Values

Last month, California’s Division of Workers’ Compensation (DWC) posted updates to the Official Medical Fee Schedule (OMFS) which included an unpleasant surprise. The OMFS adopted Medicare Medically Unlikely Edits (MUE) that eliminated reimbursement for certain workers’ comp services, including acupuncture, hearing aid exams, and others.

Following the immediate outcry, the DWC revised the OMFS update, un-adopting the MUEs for all billing codes with an MUE value of ‘0,’ and affirming that state payment ground rules take precedence over Medicare edits.

Unfortunately, some claims administrators didn’t get the memo, and continue to deny reimbursement based on these inapplicable MUEs. Providers can and should appeal such denials via the second review process — and submit further appeals if necessary.

A Pointed Controversy

California providers and their advocates rightfully cried foul when billing codes 97810 through 97814 for acupuncture were suddenly no longer reimbursable — or so it seemed.

The July 2018 update to the Physician Fee Schedule automatically incorporated the MUEs in question “by reference.” But while the OMFS generally adopts Medicare National Correct Coding Initiative (NCCI) edits, including MUEs, California Code of Regulations (CCR) Section 9789.12.13 clearly states (emphasis ours):

Except where payment ground rules differ from the Medicare ground rules, claims administrators shall apply the NCCI physician coding edits and medically unlikely edits to bills to determine appropriate payment.

Acupuncture, in particular, can be a medically necessary service for an injured worker and is reimbursable under California ground rules. The backlash was enough to force the DWC to reevaluate the OMFS update, ultimately revising the update to exclude all 1,121 billing codes with an MUE assigned value of 0 from the workers’ comp MUE file.

But apparently, news travels slowly to certain claims administrators.

An Appealing Debacle

Despite the DWC’s reversal, providers continue to receive incorrect denials of payment, with Explanations of Review (EORs) that cite an MUE value of 0 for the codes in question.

Unfortunately, it’s almost always up to providers to enforce the rules that California workers’ comp payors are supposed to follow. When the claims administrator incorrectly denies payment for reimbursable services, a second review appeal is the only recourse.

Of course, claims administrators can still incorrectly deny payment upon appeal. As the Explanations of Review (EORs) below show, Sedgwick Claims Management Services, Athens Administrators, Gallagher Bassett, and CompWest continue to incorrectly apply the MUEs in question, even after second review.

For these incorrectly denied second review appeals, providers have only one option to receive correct payment: filing for Independent Bill Review (IBR).

Forcing providers to appeal to the state via IBR is time-consuming, unnecessary, and wasteful for both the provider and the claims administrator, the latter of which must reimburse the IBR $195 filing fee to the provider when the incorrect denial is overturned.

We hope for everyone’s sake that these claims administrators get up to speed on the rules, soon.


The OMFS is always changing. Fortunately, DaisyBill keeps up, so you don’t have to. The OMFS Calculator, included in our Work Comp Wizard, instantly calculates the correct reimbursement for services rendered. Try it free today.

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