NHIC, the Jurisdiction A (JA) Durable Medical Equipment Medicare Administrative Contractor (DME MAC), has completed the prepayment review of claims for AFOs billed using L-1940. These findings include claims with dates processed from January 1 through March 31. This review was initiated due to errors identified by a DME MAC JA medical review probe, which had a charge denial rate (CDR) of 78.5 percent, as noted in an article published November 25, 2015. 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 prepayment review involved prepayment complex medical review of 256 claims submitted by 184 suppliers. Responses to the additional documentation requests (ADRs) were not received for 36 claims (14 percent). For the remaining 220 claims, 62 of the claims were allowed (28 percent) and 158 of the claims were denied or partially denied. This resulted in a claim denial rate of 72 percent, and an overall CDR of 74.2 percent.
Based on review of the documentation received, the following are the primary reasons for denial. The percentages detailed below reflect the fact that a claim could have more than one missing/incomplete item and that claims can be denied for multiple reasons, therefore the percentages of reviews may not add up to 100 percent.
Clinical Documentation, 74 percent
- 22 percent of denied claims did not support that the orthosis was custom fabricated.
- 18 percent of the denied claims did not provide documentation to support the medical necessity of a custom-fabricated orthosis, rather than a prefabricated orthosis.
- 9 percent of the denied claims were missing medical records from the treating physician to corroborate the information in submitted orthotist records.
- 9 percent of the denied claims did not meet the basic coverage criteria for beneficiaries with weakness or deformity of the foot and ankle, who require stabilization for medical reasons, and have the potential to benefit functionally.
- 7 percent of the denied claims included medical records that were not authenticated by the author.
- 3 percent of the denied claims did not include clinical documentation.
Detailed Written Order (DWO), 46 percent
- 16 percent of the denied claims included a supplier created DWO that was missing an order start date.
- 12 percent of the denied claims did not include a sufficiently detailed description of item(s).
- 9 percent of the denied claims were missing a DWO.
- 2 percent of the denied claims included a DWO that was missing the physician’s printed name.
- 3 percent of the denied claims included an illegible DWO.
Proof of Delivery (POD), 48 percent
- 16 percent of the denied claims were missing a POD.
- 12 percent of the denied claims were missing the delivery address.
- 8 percent of the denied claims had a POD that did not include a narrative description or a brand name/model number of the item(s) being dispensed.
- 7 percent of the denied claims did not include the quantity delivered.
- 4 percent of the denied claims showed the item(s) were delivered either before or after the date of service.
Based on the results of this prepayment review, DME MAC JA said it will continue to review claims for AFOs billed using L-1940.
