NHIC, the Durable Medical Equipment Medicare Administrative Contractor (DME MAC) for Region A has posted the results of its widespread prepayment complex review for lower-limb prostheses billed with a K3 functional level modifier. This review was initiated due to errors identified by the Comprehensive Error Rate Testing (CERT) contractor. The overall charge denial rate (CDR) is the total denied allowance amount (dollar amount of services determined to be billed in error) divided by the total allowance amount (dollar amount of services medically reviewed). The previous quarterly findings resulted in a CDR of 42.1 percent. Based on this result, a widespread prepayment review was continued.
Current Review Results:
The prepayment complex medical review examined 229 claims submitted by 151 suppliers for claims processed September 2-December 5, 2015. Responses to the additional documentation request (ADR) were not received for 24 (10 percent) of the claims. For the remaining 205 claims, 110 claims were allowed and 95 were denied, resulting in a claim denial rate of 46 percent. The overall CDR was 38.8 percent.
Reasons for Denial: Based on review of the documentation received, the following are the reasons for denial. The percentages noted below reflect the fact that a claim could have more than one missing/incomplete item.
- 23 percent of the denied claims had no medical record information submitted.
- 11 percent of the denied claims had medical records submitted but the records did not justify the functional level of the billed item(s).
- 4 percent of the denied claims were missing a valid proof of delivery (POD). POD was missing items delivered; items must be sufficiently detailed to identify the item(s) being delivered (e.g., brand name, serial number, narrative description).
- 20 percent of the denied claims had no statement or reason for replacement either on the physician’s order or in the medical documentation.
Based on the results of this prepayment review, NHIC said it will continue to review claims for lower-limb prostheses billed with a K3 functional level modifier and components/additions provided.
