NHIC, the Jurisdiction A Durable Medical Equipment Medicare Administrative Contractor (DME MAC), announced results of its 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 179 claims submitted by 136 suppliers for claims processed December 16, 2014, to March 2, 2015.
Responses to the Additional Documentation Request (ADR) were not received for 21 (12 percent) of the claims. For the remaining 158 claims, 67 claims were allowed and 91 were denied, resulting in a claim denial rate of 58 percent. The overall Charge Denial Rate was 45.7 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: 23 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 medical records submitted but the records did not justify the functional level of the billed item(s).
- Proof of delivery: 12 percent of the denied claims were missing a valid proof of delivery.
- Reason for Replacement: 13 percent of the denied claims had no statement or reason for replacement either on the physician’s order or in the medical documentation.