NHIC, the Jurisdiction A Durable Medical Equipment Medicare Administrative Contractor (DME MAC) has completed a second widespread complex medical review this year 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 reviews of 174 claims submitted by 128 suppliers for claims processed April 2012 through June 2012. Responses for additional documentation requests (ADRs) were not received for 20 (11 percent) of the claims. For the remaining 154 claims, 37 claims were allowed and 117 were denied resulting in a claim denial rate of 76 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 74.2 percent. (The review results published April 20 indicated an overall CDR of 90.9 percent, and the results of the initial probe, published November 30, 2011, indicated an overall CDR of 86.6 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/incomplete item.
- Lack of medical record documentation: 57 percent of the denied claims were missing the clinical documentation to corroborate the prosthetist’s records and support medical necessity.
- Evaluation/assessment documentation: 7 percent of the denied claims were missing the evaluation/assessment documentation for the functional level of item(s) billed (prosthetist assessment).
- Clinical documentation did not support the functional level of the lower-limb prosthesis: 22 percent of the denied claims had clinical records that did not justify the functional level of the billed item.
- Proof of delivery: 1 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 HCPCS codes billed with a K3 functional level modifier and components/additions provided. NHIC said it would also like to remind suppliers that repeated failure to respond to ADR requests could result in a referral to the Jurisdiction A Program Safeguard Contractor (PSC)/Zone Program Integrity Contractor (ZPIC).
NHIC has provided the following links to educational material so suppliers can be in compliance with documentation requirements:
- LCD for Lower Limb Prostheses (L11464) and related Policy Article (A25310)
- The DME MAC Jurisdiction A Supplier Manual (Chapter 10 includes information regarding documentation requirements.)
- Dear Physician Letter – Documentation of Artificial Limbs
- Comprehensive Error Rate Testing (CERT) Errors (Monthly Publications)
- CERT Physician Letter – Documentation
- Results of Widespread Prepayment Complex Review for Lower Limb Prostheses, posted April 20, 2012
- Results of Widespread Prepayment Probe for Lower Limb Prostheses, posted November 30, 2011
