R1 operators take pride in being trusted partners with our clients. Our ongoing commitment to service excellence and proactive problem-solving was recently illustrated yet again when our operators identified and resolved a significant Medicare claims logic issue that emerged in the second quarter of 2025.
What happened?
On April 1, 2025, the Centers for Medicare & Medicaid Services (CMS) implemented an update to the Integrated Outpatient Code Editor (I/OCE), Edit 113 to be specific. This update introduced a logic error that affected outpatient claims, leading to an increase in denials and returns to provider (RTP) for one of our academic medical center (AMC) clients. The issue was isolated to outpatient claims and was triggered by the new edit, which did not align with established coding guidance and policy.
Our client, experiencing a noticeable uptick in RTPs, reached out to our Underpayments team for assistance. RPS Intelligence Medicare experts quickly identified that the problem was not unique to this client but was impacting multiple others, including other AMCs and larger health systems, despite all claims being coded correctly.
The expert fix
Recognizing the widespread and urgent nature of the issue, R1 took swift action. Our team reached out to CMS with a detailed description of the problem, supported by clear data examples and thorough analysis. CMS acknowledged the logic error and instructed Medicare Administrative Contractors (MACs) to ignore the edit on future outpatient claims while they worked on a resolution.
The rapid response
Understanding the potential impact on client revenue, R1 proactively alerted all impacted clients to the issue. We provided comprehensive details to expedite their research process, validate any remaining exposure and ultimately prevent revenue loss. Our recommendations included:
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Staff Education: Informing Health Information Management (HIM), coding and billing teams about the issue and CMS guidance.
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Bill Edits/Logic: Reviewing their billing software and claim scrubber logic to assess whether edits tied to OCE Edit 113 needed revision or overriding to avoid unnecessary claim holds.
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Claim Holds: Releasing any outpatient claims currently on hold due to this edit, including those routed for HIM review.
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RTP Status/T-File Claims: Identifying outpatient claims returned to provider under Reason Code W7113 and resubmit them with the original coding.
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Active Inventory Monitoring: Monitoring claims held or returned due to these edits and continuing to submit impacted outpatient claims without modification.
The beneficial results
By taking these proactive steps, R1 safeguarded client revenue by investigating and determining the mysterious cause of the sudden rise in denials and RTPs, restoring order to the disruption and uncertainty that the logic error created. Our clients were quick to express their gratitude for the swift action and clarity we provided during a disruptive incident.
R1 values close partnership with clients and collaborates to share knowledge to benefit our healthcare provider partners, and we remain determined to leverage our expertise, scale and technology prowess to help clients protect their rightful revenue. Working with the initial AMC client impacted, we identified a systemic issue, engaged with CMS for clarification and resolution and provided actionable solutions to all clients – all within a matter of weeks. Day after day, experience continues to prove that R1 is a true partner in navigating and reducing the complexities of healthcare revenue operations for providers.
