NHIC, the Jurisdiction A Durable Medical Equipment Medicare Administrative Contractor (DME MAC), announced 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 263 claims submitted by 155 suppliers for claims processed June 12 through September 22.
Responses to the Additional Documentation Request (ADR) were not received for 34 (13 percent) of the claims. For the remaining 229 claims, 128 claims were allowed and 101 were denied, resulting in a claim denial rate of 44 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 36.9 percent. The CDR from the previous quarter was 56.4 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: 17.6 percent of the denied claims had no medical record information submitted.
- Clinical documentation did not support the functional level of the lower-limb prosthesis: 9.6 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: 4.2 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.