DME: A Healthcare Ancillary Service Under Scrutiny
Know top denials and where to look for education to help you avoid them.
By Ida Landry, CPC
Over a year ago, I was asked to participate on the Medical Billing and Coding Program Advisory Committee for a vocational school in my area. As a person who oversees a division of a durable medical equipment (DME) company, I was interested in the focus given to students regarding HCPCS Level II codes and DME billing.
There was a paragraph in the coding educational book that talked about HCPCS Level II codes, but there was no information about DME billing. Surgical, office visits, and other coding and billing divisions of healthcare were addressed in great detail. I was told that a single day is spent looking at the HCPCS Level II book. DME, it seemed, had been forgotten. I thought back to when I was an adjunct instructor for coding and billing and I realized that I also had provided little to no training on this subject.
Nearly everyone at some time will need a supply that is defined as DME or home medical equipment (HME). According to the Centers for Disease Control and Prevention (CDC) National Center for Health Statistics, in 2011, $38.9 billion was spent on DME in the United States, with $47 billion spent on other non-durable medical products. Medicare expenditures that year totaled $549.1 billion.
In some ways DME billing and coding is similar to billing for other healthcare expenditures, but there are many differences, too. Often, the necessary skills aren’t taught as standard and must be learned on the job.
Carefully Document when Billing DME
Most denials for DME do not happen because of incorrect coding. Instead, the denials stem from a lack of or inappropriate documentation. For example, my company has a patient who cannot eat normally and is on enteral nutrition, fed by a tube placed in the gastrointestinal track. The HCPCS Level II codes billed for the enteral products were:
B4154 Enteral formula, nutritionally complete, for special metabolic needs, excludes inherited disease of metabolism, includes altered composition of proteins, fats, carbohydrates, vitamins, and/or minerals, may include fiber, administered through an enteral feeding tube, 100 calories = 1 unit.
B4035 Enteral feeding supply kit; pump fed, per day, includes but not limited to feeding/flushing syringe, administration set tubing, dressings, tape
B4155 Enteral formula, nutritionally incomplete/modular nutrients, includes specific nutrients, carbohydrates (e.g., glucose polymers), proteins/amino acids (e.g., glutamine, arginine,), fat (e.g., medium chain triglycerides) or combination, administered through an enteral feeding tube, 100 calories = 1 unit
We have supplied her nutritional needs since 2012, and the total charge for all the enteral product and supplies from 2012 to the present is $31,352.89. We can prove the medical necessity for only $7,888.54, and have had to write off (or refund to Medicare) the rest. Why? Because Medicare continually states that our documentation does not validate medical necessity for the DME the patient received.
Our local Medicare administrative contractor (MAC) provides DME suppliers with training to correct errors. During this training, we found the denials were because of two things: documentation did not state by what method the patient received the enteral product (e.g., G-tube, J-tube, etc.), and we did not submit proof of a conversation between the person ordering the enteral product and the supplier.
Proof of a conversation between the patient or authorized person and the supplier is necessary to establish a medical reason for sending more enteral and supplies to the patient. Acceptable forms of proof may be a handwritten or digital record documenting a phone call between the two parties. The note should include the date, time, to whom the supplier spoke, and what items and quantities were requested. Fax sheets verifying correspondence between the parties and the signature of the individual who filled out the form and the date may also be suitable proof. We had the necessary documentation to prove this communication occurred. Our mistake was that we did not send it with all the other documentation. This was an easy fix.
To eliminate the other reason for denial, we corrected our intake form that providers have to fill out and sign to include the patient’s method for receiving the enteral product.
This example illustrates that in the DME world, providing clear documentation to validate the medical necessity of patients’ supplies is just as important as correct coding—if not more. A person involved in DME billing and coding must be able to read and understand local coverage determinations and national coverage determinations. The accounts receivables (A/R) and follow-up staff must also know how to read and understand documentation to know whether it substantiates required medical necessity. This will ensure successful appeals.
In early 2013, Paul Komishock wrote an article for HME Business Magazine that provided insight as to why the denial rates for DME items are so high. Quoting Medicare’s Improper Medicare Fee-For-Service Payments Report – November 2009, he noted, “The DME MAC error rate was 51.9 percent compared to the Carrier/MAC (9.9 percent), FI/MAC Non-Inpatient (3.9 percent) and FI/MAC Inpatient (6.1 percent) rates, ‘because CMS’ stricter adherence to policies disproportionately affects DME claims …’”
Komishock names the following reasons why denials are so prevalent:
- There should be stricter enforcement of documentation requirements, rather than allowing for clinical review judgment.
- CMS clarified that clinical review judgment may not override documentation requirements.
- The DME contractor’s request for documentation should be from the supplier who billed for the item, rather than from the medical professional who ordered the item.
The final reason is the most damaging to DME suppliers because there is a lack of ownership in the creation and oversight in most of the documentation they submit. Medical professionals (i.e., physicians, physical therapists (PTs), occupational therapists (OTs), nurses, dieticians, etc.) create most of the documentation. As a coder or biller, you already know how hard it can be to get a provider to correct his or her documentation. Put yourself in the shoes of someone who is requesting documentation improvements from a provider whom he or she has never met. This is not an easy task.
Examples of documentation that DME companies have control over are intake forms for monthly enteral supplies and home assessments that assistive technology professionals (ATPs) employed by the DME company fill out for complex wheelchair orders. Other documents include detailed product description forms, written correspondence needed between the DME supplier and the patient or caregiver, and delivery tickets.
Another important DME denial point is that most DME companies have more than one location. Some, like Apria, are national companies, while others are small family-owned organizations with one or several locations in a town or state. If the company has different locations in different MAC jurisdictions, the billing staff must be knowledgeable of requirement differences, as each MAC has the right to vary its requirements. This can be seen in Table A on the preceding page, which shows examples of the most recent Prepayment Medical Review Audits done for the HCPCS Level II code K0823 Power wheelchair, group 2 standard, captain’s chair, patient weight capacity up to and including 300 pounds.
|Claim Review Dates||Claims Error Rate|
|Jurisdiction A, DME MAC (NHIC, Corp.)||October 1, 2013 through December 31, 2013 (188 claims request 128 reviewed)||84 Percent|
Top denial reasons (claims can have more than one):
100 percent of the denied claims dealt with some issue with the face-to-face examination documented by the provider.
19 percent of the claims had issues with the 7-element order.
45 percent had issue with documentation supplied by the supplier or licensed/certified medical professional (PT or OT).
18 percent of the claims had issue with the detailed product description (DPD).
14 percent of the claims had problem with proof of delivery paperwork.
11.5 percent of the claims had errors with the home assessment completed by the ATP.
|Jurisdiction B, DME MAC
(National Government Services, Inc.)
|April 1, 2014 through June 30, 2014 (665 claims reviewed, 561 denied)||84 Percent|
|Top denial reasons (claims can have more than one):219 claims were denied because the face-to-face examination did not support why a manual wheelchair wouldn’t meet the beneficiary’s mobility needs in the home vs. an electric model.
171 claims were denied because the beneficiary’s body systems responsible for ambulatory difficulty and ability were not clearly defined in the physical examination.
113 claims were denied because the face-to-face examination did not support why a power-operated vehicle was necessary to meet the beneficiary’s mobility needs in the home.
96 claims were denied because the basic coverage criteria was not been met, showing the beneficiary does not have sufficient upper extremity function to self-propel an optimally-configured manual wheelchair in the home.
80 claims were denied because the face-to-face examination did not support the beneficiary’s mobility limitation.
Source: www.ngsmedicare.com, second quarter power wheelchair prepayment review
|Jurisdiction C, DME MAC
(CGS Administrators, LLC.)
|July 1, 2014 – September 30, 2014
(Nothing was given regarding the number of claims reviewed)
Top denial reasons (claims can have more than one):
23.6 percent of the claim denials were because medical records lacked sufficient information concerning the beneficiary’s condition to determine if medical necessity coverage criteria were met.
19 percent of the claim denials were because the face-to-face examination did not indicate that the beneficiary’s limitation of upper extremity function was insufficient to self-propel an optimally-configured manual wheelchair in the home to perform mobility-related activities of daily living (MRADLs).
13.8 percent of the claim denials were because the 7-element order was missing the date of the face-to-face examination.
11.5 percent of the claim denials were because the DPD was missing a date stamp (or equivalent) to document the order’s receipt date by the supplier.
10.5 percent of the claim denials were because the 7-element order was missing a date stamp (or equivalent) to document the receipt date of the order by the supplier.
9.8 percent of the claim denials were because the face-to-face examination was missing a date stamp (or equivalent) to document the receipt date of the examination by the supplier.
9.8 percent of the claim denials were because the documentation submitted for review did not include a face-to-face mobility examination.
8.2 percent of the claim denials were because the documentation submitted for review did not include a DPD.
8.2 percent of the claim denials were because the face-to-face examination did not indicate the beneficiary’s degree of mobility limitation significantly impaired the beneficiary’s ability to participate in MRADLs within the home.
7.2 percent of the claim denials were because the documentation did not include proof of delivery for the item(s) billed.
|Jurisdiction D, DME MAC (Noridian)||January 2014 through April 2014 (265 claims reviewed 167 denied)||63 Percent|
Top denial reasons (claims can have more than one):
The submitted documentation did not support that the beneficiary does not have sufficient upper extremity function to self-propel an optimally configured manual wheelchair.
The face-to-face examination submitted was incomplete or missing elements.
The submitted documentation contained no DPD or the submitted DPD was invalid.
The submitted documentation does not support that the beneficiary’s mobility limitation cannot be sufficiently and safely resolved by the use of an appropriately fitted cane or walker.
The submitted 7-element order was incomplete or missing elements.
DME billing departments need help and education. This is critical to the survival to any DME company, and the DME industry as a whole. DME is a very vital ancillary healthcare service and is needed to help with healing and everyday needs of the people it serves.
The error rates of DME equipment and service audits may differ depending on which MAC is doing the audit, but the result is the same. The error rates are too high and educational tools for the intake, billing, coding, and A/R or follow-up staff in a DME billing department need to be created and shared.
MACs will provide education, but you have to know where to look and what questions to ask. Documentation education is the key, with coding guidance. Knowing what a 7-element order, detailed order description, or home assessment is, or why the face-to-face examination is so critical, is the key to decreasing those error rates. That education is an article or articles yet to be written.
If you are in the DME world and an AAPC member, share your industry knowledge by providing that education to others.
Ida Landry, CPC, works for Keen Healthcare, a HME manufacturer and supplier of DME. As director of Keen Home Medical, she oversees the billing department and compliance division. Landry holds a Bachelor of Science in Health Administration and a Master of Business Administration. She is a member of the Portland Metro, Oregon, local chapter.
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