CGS Administrators, the Durable Medical Equipment Medicare Administrative Contractor (DME MAC) for Medicare’s Jurisdiction C, paid $6 million for 4,260 lines of service for lower-limb prostheses in 2010 and 2011 that did not meet local coverage determination (LCD) requirements, according to an Office of Inspector General (OIG) report released July 19. This review was part of a series of reviews to determine the compliance of DME MACs with LCD requirements for lower-limb prostheses. The OIG excluded claims undergoing Recovery Audit Contractor (RAC) audit review.
The following LCD requirements were not met:
- LCD 11442 states that to receive certain lower-limb prostheses, individuals should attain a certain functional level, and the functional level modifier codes must be included on the line of service. CGS processed and paid $5,129,019 for 2,292 L-5930 (addition, endoskeletal system, high activity knee control frame) lines of service that did not have a modifier code or that had a modifier code other than K4.
- LCD L11442 states that no more than two of the same socket inserts are allowed for an individual lower-limb prosthesis at the same time. CGS processed and paid for more than two of the same socket inserts for individual prostheses, totaling $709,430 for 1,730 lines of service.
- LCD L11442 identifies certain combinations of components that are not allowed on lower-limb prostheses. CGS administrators processed and paid $183,527 for 238 lines of services that had unallowable combinations of components. In this case, the unallowable combinations were L-5500 (initial, below knee PTB type socket, non-alignable system, pylon, no cover, SACH foot, plaster socket, direct formed) and L-5629 (addition to lower extremity, below knee, acrylic socket).
According to the report, at the time that CGS paid these lines of service, it did not have edits in place to evaluate whether they met all the LCD requirements. In 2012, the Centers for Medicare & Medicaid Services (CMS) issued a technical direction letter that instructed CGS and the DME MACs to put in place claim edits for all requirements set forth in the lower-limb prosthetics LCD.
In light of the report results, the OIG recommended that CGS recover $6 million in identified overpayments for lines of service for lower-limb prostheses that did not meet LCD requirements in 2010 and 2011 and monitor the edits it developed in response to CMS’s March 2012 technical direction letter to ensure that the edits are functioning correctly. CGS concurred with the recommendations.