April 25, 2014

DME MAC A Releases Quarterly Results of Lower-Limb Prostheses Prepayment Review

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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 177 claims submitted by 114 suppliers for claims processed January–March 2014.

Responses to the Additional Documentation Request (ADR) were not received for 33 (18 percent) of the claims. For the remaining 144 claims, 33 claims were allowed and 111 were denied, resulting in a claim denial rate of 77 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 50.1 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: 36.9 percent of the denied claims had no medical record information submitted.
  • Evaluation/assessment documentation: 9 percent of the denied claims had no prosthetist records submitted.
  • Clinical documentation did not support the functional level of the lower-limb prosthesis: 24.3 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: 7 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 HCPCS codes billed with a K3 functional level modifier and components/additions provided.

NHIC reminded suppliers that repeated failure to respond to additional documentation requests (ADRs) could result in a referral to the Jurisdiction A Program Safeguard Contractor (PSC)/Zone Program Integrity Contractor (ZPIC).

NHIC has provided the following links to educational material so suppliers can be in compliance with documentation requirements:

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