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David McGill Blogger

Important Miscellaneous Information

Posted by David McGill | October 03, 2012

Medicare recently updated its Coding Procedures guidance, available on its website. While every supplier should take the time to become familiar with this revised document, we want to focus specifically on its guidance regarding miscellaneous (or “not otherwise classified”) codes.

What are NOC Codes?

Medicare states that “[t]hese codes are used when a supplier is submitting a bill for an item or service and there is no existing national code that adequately describes the item or service being billed.” (Emphasis added) Example: when Össur began selling PROPRIO FOOT in 2006, no other microprocessor-controlled ankle foot system existed. As a result, no then-current code described the unique characteristics of that device and Össur suggested the use of the prosthetic NOC code (L5999) while Medicare reviewed Össur’s application for a new L code.

Why do NOC Codes Exist?

Medicare created NOC codes for two main reasons.

First, “[t]he importance of miscellaneous codes is that they allow suppliers to begin immediately billing for a service or item as soon as it is allowed to be marketed by the Food and Drug Administration (FDA) even though there is no distinct code that describes the service or item.” In other words, Medicare sees the NOCs as a way to provide beneficiaries access to new services or devices before Medicare has the chance to formally consider and rule on a new code for them.

Second, “the use of miscellaneous codes also helps us to avoid the inefficiency and administrative burden of assigning distinct codes for items or services that are rarely furnished or for which we expect to receive few claims.” Stated another way, when Medicare determines that the administrative costs of creating a new code are greater than the cost of reviewing a small number of claims with a NOC, it will recommend the NOC for a particular service or device.

How Do You Use Them in Practice?

Medicare states that before using a NOC code

a supplier should check with the entity that will receive the payment claim to determine whether there is a specific code that should be used rather than a miscellaneous code. In the case of claims that are to be submitted [to Medicare], suppliers that have coding questions should check with the pricing, data analysis, and coding (PDAC), contractor to [Medicare].

If the PDAC confirms that use of a miscellaneous code is appropriate, Medicare will manually review the claim, will request a clear description of the item or service being billed, and will additionally seek detailed pricing information. Because of these requirements, NOC codes do trigger a high level or payer scrutiny, both with Medicare and with private payers. It is therefore critical that you have exhaustive documentation explaining the need for the service or device giving rise to the NOC code.

Future Trends re. NOC Code Use

A new development in the use of NOC codes is the strategic use of them in place of seeking a new code to describe a particular service or technology. Example: Manufacturer develops a new knee brace that isn’t described by the current code set. Instead of submitting an application for a new code to Medicare, it decides to suggest to customers that they use an NOC code to describe it on a permanent basis.

The appropriateness of using a NOC code as a replacement for seeking a new code is questionable. The primary goals of NOC codes, as outlined above, are (1) giving beneficiaries early access to new products, and (2) administrative efficiency for rarely-used items. But the widespread and indefinite use of NOC codes for a new prosthetic or orthotic device serves neither of those aims. In fact, using NOC codes in this context actually increases the administrative burden on payers.

We believe that if this practice becomes more widespread, Medicare will respond strongly. And the nature of that response may not be one that suppliers find attractive.

What Should You Do?

First, be aware of the updated Coding Procedures published by Medicare.

Second, before using NOC codes for Medicare claims, follow Medicare’s guidance, set forth above.

Third, if you get confirmation that use of a NOC code is appropriate, prepare yourself for a rigorous examination of the claim.

Beyond those three things, consider the future trend: is it a good thing to try and use NOC codes in place of new codes that specifically describe the service or item? And when asking that question, think about how Medicare and other payers will view the practice. Will they consider it a legitimate use of NOC codes given what they were originally designed for? Or will they view it as an inappropriate attempt to end-run the coding application process?

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