Determining when to adjust or cancel a claim

Feb 08, 2019
The Bottom Line

If a provider discovers a claim was paid incorrectly or in error, it is important that he or she takes the initiative to make a correction. Adjustment claims are also appropriate to add other charges to the claim, such as if an invoice for an ancillary item is received after the billing has been completed or was simply overlooked when the claim was prepared. Keeping Medicare funds that were improperly paid is considered Medicare fraud.

  • An adjustment claim (TOB with a third digit of 7) is completed to change information on a claim.

  • A cancel claim (TOB with a third digit of 8) is completed to withdraw a claim from the Medicare system completely.

These claims can be initiated by a SNF for either Part A claims (217 or 218) or Part B claims (227, 228, 237, or 238). Adjustment and cancel claims can be completed in the fiscal intermediary shared system (FISS), or you can check with your electronic software provider for specific instructions for adjusting and cancelling claims through their software.

An adjustment claim should be filed when you discover that an error has been made in the original claim. Adjustment claims can only be completed for claims in a P status (paid), not in T status (return to provider) or D status (denied).

Cancel claims completely delete the previously paid claim. Once a cancel claim has been initiated, it cannot be reversed, so use caution prior to cancelling claims. As with adjustment claims, claims can only be cancelled if they are in P status.

Claim change reason codes

The following are claim change reason codes required with adjustment or cancel claims:

  • DO: Changes to service dates

  • D1: Changes to charges

  • D2: Changes to revenue codes/HCPCS codes/health insurance PPS (HIPPS) rate code

  • D3: Second of subsequent interim PPS bill

  • D4: Change in ICD diagnosis/procedure code

  • D5: Cancel or correct health insurance claim number or provider ID

  • D6: Cancel only to repay a duplicate or Office of Inspector General payment

  • D7: Change to make Medicare the secondary payer

  • D8: Change to make Medicare the primary payer

  • D9: Any other change

  • E0: Change in patient status

Only one claim change reason code is allowed per adjustment request, so choose the single reason that best describes the adjustment being requested. Use the claim change reason code D1 only when the charges are the only change on the claim. Use the best code to describe the change.

Correction claims

Correction claims are completed when a claim is in a T status (return to provider or RTP). If the claim cannot pass all the system edits, it will be put in T status. The biller can access the code through the FISS system and make the needed corrections and release the claim for processing (PF9). Examples of why a claim may RTP include the following:

  • The beneficiary name and Medicare number do not match

  • Claim is missing occurrence span code

  • The resident status code does not match the type of bill (for example, a discharge status code on a continuing stay claim)

  • Total days do not match the individual line items of days

  • Total charges do not add up from the individual charges

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