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Modifier KX Doesn’t Guarantee DMEPOS Documentation, OIG Says

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  • In Billing
  • April 27, 2012
  • Comments Off on Modifier KX Doesn’t Guarantee DMEPOS Documentation, OIG Says

Suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) have been applying modifier KX Specific required documentation on file inappropriately to gain payment in the absence of required documentation, according to a recent report by the Office of Inspector General (OIG).
Suppliers must have a written physician’s order and proof of delivery for all DMEPOS, as well as additional documentation on file for items requiring modifier KX. A review of 400 DMEPOS claims from 2007 revealed, “The KX modifier was not effective in ensuring that suppliers of DMEPOS that submitted Medicare claims had the required supporting documentation on file,” according to the OIG report.
Of the 400 sampled items, suppliers had the required documentation on file for only 163 items, resulting in unallowable payments totaling $19,767. Based on these results, the OIG estimated that the sampled contractors paid approximately $316.4 million in unallowable Medicare payments to all suppliers throughout the period.
The types of missing or incomplete documentation included:

  • Physician orders (147 of 400)
  • Proof of delivery (84 of 400)
  • Use or compliant use follow-up statements (78 of 312)
  • Physician statements (25 of 88)
  • Sleep studies (7 of 312)

According to the OIG, the errors occurred “because the contractors did not supplement their electronic edits with sufficient prepayment and postpayment review to ensure that suppliers maintained required documentation.”
To prevent further inappropriate payments for DMEPOS without proper documentation, the OIG recommended CMS:

CPB : Online Medical Billing Course

  • Ensure that contractors recover the overpayments identified in OIG’s individual reports to contractors for specific DMEPOS items claimed for which the suppliers did not have the required documentation;
  • Develop an alternative mechanism such as having contractors perform additional prepay and postpay reviews to ensure that suppliers maintain the required documentation for the specific DMEPOS items included in this review that currently use modifier KX;
  • Take appropriate action for suppliers that did not meet the supplier standard for maintaining proof of delivery; and
  • Issue a special alert emphasizing the documentation that suppliers must have in their files to support the use of modifier KX before billing Medicare.

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