NHIC, the Jurisdiction A Durable Medical Equipment Medicare Administrative Contractor (DME MAC), announced the results of its widespread complex medical review for lower-limb prostheses Healthcare Common Procedure Coding System (HCPCS) codes billed with a K3 functional level modifier and components/additions provided. The review involved prepayment complex medical review of 156 claims submitted by 111 suppliers for claims processed September 24 through December 15, 2014.
Responses to the Additional Documentation Request (ADR) were not received for 17 (11 percent) of the claims. For the remaining 139 claims, 79 claims were allowed and 60 were denied, resulting in a claim denial rate of 43 percent. The total denied allowance amount (dollar amount of allowable charges for services determined to be billed in error divided by the total allowance amount of services medically reviewed) resulted in an overall Charge Denial Rate (CDR) of 34.9 percent.
According to the documentation received, the following are the reasons for denial. The percentages reflect the fact that a claim could have more than one missing or incomplete item.
- Lack of medical record documentation: 13 percent of the denied claims had no medical record information submitted.
- Clinical documentation did not support the functional level of the lower-limb prosthesis: 13 percent of the denied claims had clinical records submitted but the records did not justify the functional level of the billed item.
- Proof of delivery: 2.7 percent of the denied claims were missing the proof of delivery.
Based on the results of this prepayment review, NHIC said it will continue to review claims for lower-limb prostheses codes billed with a K3 functional level modifier and components/additions provided.
