DME Scrutiny Increases: Fix Documentation Misses

Although determining supply codes is pretty straightforward, diagnosis coding and medical necessity is not.

By Kelly Loya, CPC-I, CPhT, CHC, CRMA

When it comes to durable medical equipment (DME), the most important risk for non-government payers is who pays for the items—the patient or the insurance. For government payers, the requirements for supporting documentation are more critical. To give you a better understanding of their importance, let’s focus on the basics of documentation as it applies to Medicare for DME (The guidance may affect Medicaid and commercial payer coverage, also).

The Truth About DME

Everyone knows DME coding and billing is a “piece of cake.” The DME supplier applies a predetermined HCPCS Level II code based on characteristics of the supply. Modifiers for certain claim types can be applied relatively easily, based on the details of the delivered supply.

While coding for the supply is often straightforward for most suppliers, determining the appropriate diagnosis code can be tricky. The ICD-9-CM code is the first link to support medical necessity of ordered item(s).

A denial or recoupment of a DME payment occurs most often when the ordering clinician does not properly document medical necessity. There are two types of orders: The preliminary or dispensing order, and the detailed written order (DWO).

The dispensing order is usually a written or verbal communication documented by the supplier, which explains which item(s) is needed and when. Only basic information is required, and may be documented by the supplier alone; however, a claim for the dispensed item can be filed only after the DWO is received.

DWO documentation elements vary, depending on the ordered DME supply and payment category. Basic order requirements that always must be present include:

  • Patient (beneficiary) name
  • Prescribing physician’s name
  • Detailed item description, including any modifications
  • Dispense quantity
  • Order date and start date (if different than the order date)
  • Physician signature and physician signature date

Additional information is required for supplies provided on a periodic basis. Elements of the order need to include the strength and/or frequency of use, and the number of refills, as applicable.

Sign and Date Is More than a Formality

Often, upon review of supporting DME records, the DWO’s signature is lacking a date personally noted by the signing physician, or does not adhere to Medicare’s signature requirements, as set forth in the Medicare Program Integrity Manual, chapter 3, section 3.3.2.4.

The physician must personally (either by hand or electronically) sign the DWO and date the signature. Signature stamps are unacceptable. Even if the physician’s staff completes the order, the physician must personally sign and date the DWO.

“If the supplier does not have an order that has been both signed and dated by the treating physician before billing the Medicare program, the item will be denied as not reasonable and necessary,” according to DME Medicare administrative contractor (MAC) supplier manuals.

This requirement may seem trivial, but the timing and intent of the order cannot be validated if the physician does not personally note the date. The order is by far the most important document to support a medical need for DME based on clinical judgment. Merely having the DWO to support the codes submitted on the claim does not support the medical necessity. There must be corroborating evidence documented in the medical record.

Clearly Demonstrate the Need

Insufficient documentation to support basic coverage criteria is another common deficiency. Remember: The physician’s order is not considered part of the patient’s medical record. The DME MAC supplier manual and the Medicare Program Integrity Manual, chapter 5, section 5.2.3, state, “A prescription is not considered as part of the medical record. Medical information intended to demonstrate compliance with coverage criteria may be included on the prescription but must be corroborated by information contained in the medical record.”

For the DME supplier to be certain all coverage criteria is supported, the supplier should request the treating provider’s notes, which lead up to and include ordering of the supply (at a minimum). DME suppliers may need a standard process, requiring all received DWOs to be accompanied by the ordering/treating physician’s documentation.

The diagnosis supporting the supply’s necessity must be present in the medical record. Upon review of the order and supporting medical record, discrepancies are often seen between the DWO and the progress note. If the condition necessitating the supply is in question, the supplier should seek clarification.

Some supplies also require the patient to complete a follow-up evaluation with his or her treating physician to verify the ordered equipment or supply is effectively improving or stabilizing the patient’s condition. The supplier should not only validate the initial supporting information is within the medical record, but also that the follow-up evaluation is completed and continues to support medical necessity. Depending on the supply dispensed, the supplier should verify that the medical record justifies each additional element added to the supply or accessories provided, and the purpose for use.

Why is the DME supplier responsible for what is contained in the physician’s record? The answer is simple: The DME supplier is receiving the reimbursement for the item dispensed and is just as liable for Medicare fraud as the provider.

DME Is for Home Use

Lastly—and perhaps one of the most important factors for coverage—consider where the patient is located, and his or her status.

DME is a Part B benefit; therefore, the ordered device or supply is for use in the patient’s home. This doesn’t mean the patient can’t use the item outside the home; however, Part B coverage is only valid if it maintains or improves the patient’s daily living activities in the home or place of residence. A patient is ineligible to receive the Part B benefit for DME supplies while receiving a level of care covered under Part A because the facility would be responsible for providing the necessary DME for the patient’s use while in the facility.

DME Under Surveillance

DME is under a microscope like never before. With the increased scrutiny of government funded healthcare reimbursement, and the high error rates in this area, the Office of Inspector General and DME MACs are on the alert. Many MACs, such as Jurisdiction B MAC Noridian Healthcare Solutions, are conducting widespread prepayment reviews and are publishing the results on their websites.

Kelly Loya, CPC-I, CPhT, CHC, CRMA, is director of Reimbursement Advisory Services at Altegra Health, Inc. She has more than 25 years of experience in medical coding, billing, reimbursement, internal audit, compliance, and clinical operations. Loya also assists clients with litigation support services for related areas of focus, including data analysis and statistical sampling services. She is a member of the Charlotte, N.C., local chapter.

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Renee Dustman

Renee Dustman

Renee Dustman is executive editor at AAPC. She has a Bachelor of Science degree in Journalism and a long history of writing just about anything for just about every kind of publication there is or ever has been. She’s also worked in production management for print media, and continues to dabble in graphic design.
Renee Dustman

About Has 425 Posts

Renee Dustman is executive editor at AAPC. She has a Bachelor of Science degree in Journalism and a long history of writing just about anything for just about every kind of publication there is or ever has been. She’s also worked in production management for print media, and continues to dabble in graphic design.

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