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N538 Denials in AL, GA and TN

August 29, 2013
AAA Member Advisory
TO: AAA Membership
FROM: David M. Werfel, Esq.
RE: N538 – Denials in Alabama, Georgia and Tennessee

PLEASE NOTE: The information in this Advisory only pertains to those ambulance service suppliers/providers in Alabama, Georgia and Tennessee.

What I am going to describe below only applies to ambulance service suppliers/providers who have Cahaba as their Medicare Administrative Contractor (MAC), i.e. those in Alabama, Georgia and Tennessee. Ambulance service suppliers/providers in all other states can disregard this Advisory. If you have Cahaba as your MAC, it is important that you know that there is a problem and that it has already been resolved, even though you may not yet have seen the problem or been notified that it has been resolved.

Starting around August 16, 2013, Cahaba started issuing unusual denials going back to January 2012. The Remittances listed the Code N538, which suggests that Medicare is not responsible and that the facility should have been billed. Thus, the thought was that these were for SNF Consolidated Billing. As it turns out, these were for claims that are exempt from SNF Consolidated Billing, e.g. dialysis, discharges after a covered in-patient stay, etc.

The bottom of the Remittance Notice would have listed the claim number with a note for the adjustment with an explanation of "FB" (forwarding balance). This does not mean that money was offset from that Remittance, even though it appears that way if you only read the section where the adjustment for that claim is listed. What it does mean is that Cahaba will be sending out a demand letter requesting the overpayment. When those letters go out, appeal rights begin.

In this case, I brought this issue to the attention of Cahaba on August 16, 2013 and then again on the following days early last week. After looking at the examples and doing some internal research, Cahaba found the error in their system. On August 23, 2013, they advised me it has been fixed going forward. In other words, they indicated the problem has been fixed for future Remittance Notices. They have also stopped their system from sending out any more demand letters on this issue. However, some were sent out. Cahaba has indicated to me that they will go back into their system and re-adjust these adjustments, effectively canceling the proposed overpayments.

If (when) you see these, if it is the situation I described above, i.e. N538, 2012 claims (possibly more recent claims also), and the "FB" at the end of the Remittance, I suggest you keep a list of the specific claims in issue and then wait approximately 30 days to make sure they cancel the proposed adjustment and demand letters you may have received. If they do not resolve the problem and cancel the debts, you will have to appeal, but I anticipate that will not happen. So, keep a list and check it to make sure there is no debt, when the dust settles. If they do not fix it, within 60 days, appeal.

Guaranteed cash flow during transition.