Audits: Part 3

Editor's note: This is Part III of a five-part series. Part IV will compare post-payment audits and prepayment reviews conducted by DME MACs with those conducted by ZPICs, and Part B will discuss contractor abuses.

According to CMS, the Medical Review (MR) program is designed to promote a structured approach in the interpretation and implementation of Medicare policy. MR functions may include analyzing data; writing and reviewing local coverage determinations; reviewing claims and educating providers; comprehensive error rate testing; advance determination of Medicare coverage; probe reviews; supplier education; and medical review of claims not for benefit integrity purposes.

Initiation of post-payment MR

When initiating post-payment MR (either provider-specific or service-specific), the DME MAC is required to give suppliers written notice of the following: the specific reason for selection; if the basis for selection is comparative data, how the supplier's data varies significantly from other suppliers in the same specialty payment area or locality; the list of claims that require medical records; and the OMB Paperwork Reduction Act collection number.

DME MAC determination

A contractor may review a claim regardless of whether a national coverage determination (NCD), coverage provision in an interpretative manual, or LCD exists for that service. A contractor must first consider coverage determinations based on the absence of a benefit category or based on statutory exclusion. Next, a contractor then considers whether the claim was reasonable and necessary. A service is reasonable and necessary if the contractor determines that the service is (i) safe and effective; (ii) not experimental or investigational (with a limited exception); and (iii) appropriate, including the duration and frequency that is considered appropriate for the service.

A contractor must deny a claim (in full or part) whenever there is evidence that the item or service was not rendered or was not rendered as billed; was furnished in violation of the self-referral prohibition; was furnished, ordered, or prescribed on or after the effective date of the supplier's exclusion (unless an exception applies); or was not furnished or not furnished as billed.

Documentation forpost-payment MR

The contractor may review any documentation submitted with the claim and request documentation from the supplier or a third party. A contractor may, but is not required to, review unsolicited, supporting documentation that is submitted with a claim. A contractor may deny a claim without reviewing such documentation in two instances: (i) when clear policy serves as the basis for denial; or (ii) in instances of medical impossibility.

Additional documentationrequest (ADR)

A contractor may request additional documentation from a supplier by issuing an ADR. The ADR must specify the pieces of documentation needed to make a coverage or coding determination. The purpose of such documentation is to support the medical necessity of the item or service provided. The treating physician, another clinician or provider, or supplier may supply this documentation. This documentation may take the form of clinical evaluations, physician evaluations, consultations, progress notes, physician letters or other documents intended to record relevant information about a patient's clinical condition and treatment. In instances where documentation is provided in lieu of contemporaneous physician progress notes, the contractor will determine if the documentation is sufficient to justify coverage. If it is not, the contractor will deny the claim.

Complex MR timeliness requirements

When the contractor timely receives documentation it requested by ADR, the contractor must make a medical review determination and mail a notification letter to the supplier within 60 days of receiving the documentation.

Late documentationand reopening of claims

If a contractor receives the requested information from a supplier after a denial has been issued but within a reasonable number of days (generally 15 days after the denial date), the contractor may reopen the claim.

Responding to post-payment audit

The ADR will generally provide information on the type of documents a supplier is required to submit. The documents generally include patient medical records; supplier records; detailed written order; dispensing order; certificate of medical necessity; and delivery tickets.

Suppliers must provide a copy of documentation from the patient's medical record that identifies the condition/diagnosis for which the item is being ordered and other pertinent information relating to the medical necessity for the item. The date of the visit must be noted in the record and must be prior to the date of service on the claim. For items addressed in LCDs, there must be information to document that all coverage criteria specified in the medical policy have been met. The medical record must be in the usual format for that physician's/provider's medical records. Supplier created forms, attestations, or similar documents are not sufficient to document medical necessity, even if completed and signed by the physician.

The records should be organized by claim or patient. The supplier should include the following along with the records: (i) a copy of the request letter, including the patient list; and (ii) a cover letter detailing the documents being submitted and a summary of the medical records (the summary should briefly discuss how medical necessity is established for each claim). hme

Jeffrey S. Baird, Esq. is chairman of the Health Care Group at Brown & Fortunato, P.C., a law firm based in Amarillo, Texas. He can be reached at (806) 345-6320 or jbaird@bf-law.com.