What Prepayment Review of DMEPOS Claims Reveals

National Government Services DMEPOS claim auditor (NGS) has recently published the results of its third quarter prepayment medical review of high-error audit claims. More than half of prepayment claims identified for review were denied resulting in a 65 percent claims error rate for reasons that included failure to meet the coverage criteria and documentation requirements, reports NGS.

The data crunchers at NGS reveal that the reasons for the denials are not new. In fact, documentation, either the absence of the required orders or specific information on orders and other documentation quality issues continue to plague suppliers. According to NGS, for example, the top reasons that Infusion Therapy Claims were denied included: (1) documentation failed to support the quantity of each item remaining would be nearly exhausted on or about the consumable supply’s anniversary or delivery date; (2) the refill request did not include a description of each item requested; and (3) medical necessity requirements were not met.

Similarly, reasons for Oral Anticancer Drugs denials included: (1) missing medical records from the treating physician; (2) missing proof of delivery; (3) detailed written order failed to include a signature date or a physician signature failed to meet Medicare signature requirements (e.g., illegible signatures, stamped signatures; or signatures otherwise not authenticated by the ordering practitioner).

Surgical dressings claims were denied at a high rate for, among other reasons, orders which failed to specify quantities to be used at one time.

Overall error rate, however, appears to be on a declining trend this year. In the first quarter of 2013, NGS reports the error rate was at 72 percent, 69 percent during the second quarter while in the fourth quarter of 2012, the claims error rate was at 85 percent.

To avoid high claim rejection rates and reduce the possibility of future recoupment providers and suppliers should institute robust compliance programs, conduct internal periodic audits, provide staff with continuing education and training. NGS also encourages providers to become familiar with local coverage determination, Medicare policy manuals, as well as contractor policies and procedures.

If you have questions about Medicare or Medicaid enrollment, participation, reimbursement or have other legal needs, please contact us here.