NHIC, the Jurisdiction A (JA) Durable Medical Equipment Medicare Administrative Contractor (DME MAC), posted results of its most recent widespread prepayment complex review for lower-limb prostheses billed with a K3 functional level modifer. This review was initiated due to errors identified by the Comprehensive Error Rate Testing (CERT) contractor.
The review involved 178 claims submitted by 123 suppliers for claims processed from December 6, 2015, to March 1, 2016. Responses to additional documentation requests were not received for 13 claims (7 percent). For the remaining 165 claims, 85 claims were allowed and 80 were denied resulting in a claim denial rate of 49 percent. The overall charge denial rate (CDR) was 34.6 percent.The overall 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 reasons for claim denials follow. Note that the percentages noted below reflect the fact that a claim could have more than one missing/incomplete item.
- Twenty-six percent of the denied claims had no medical record information submitted.
- Twenty percent of the denied claims had medical records submitted but the records did not support the functional level of the billed item(s).
- Six percent of the denied claims were missing a valid proof of delivery.
- Thirty-six 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, DME MAC JA said it will continue to review claims for lower-limb prostheses billed with a K3 functional level modifier and components/additions provided.
