What Medical Billers and Coders Need to Know About the CMS

By Karen Smiley

The Centers for Medicare & Medicaid Services (CMS) is the home of two government healthcare programs: Medicare and Medicaid. Originally, Medicare was intended to provide healthcare to the elderly at the age of 65. In the years that followed, the need for access to healthcare for others, including children, the disabled, and those with certain chronic illnesses, became apparent.

Today, Medicare also includes those with physical or mental disabilities and those awaiting organ transplants, as well as prescription drug coverage.

Because these programs serve so many Americans and use taxpayer dollars to do so, the government has established rules governing what services are covered, the acceptable level of compensation for the service providers, and how claims should be processed.

Medicare policies regarding medical necessity, frequency of procedures, and other payment rules are often used as guidelines for commercial payers as well. For complete information about the policies for Medicare claims processing, check out the Internet‐only manuals on the CMS website.

Medicare policy rules change pretty frequently, and they affect payment for certain procedures. Take a procedure as simple as a lesion excision (removing a cyst or skin growth), for example. Medicare pays for this procedure only under a specific set of rules (the diagnosis must support medical necessity). If the rules regarding this procedure change, and if these changes affect your employer, it may be your job as a coder to keep the physician or staff informed.