CMS will flag LMRP denials for bennies

Tuesday, December 31, 2002

WASHINGTON -  As a consequence of a class-action lawsuit that pits CMS against Medicare beneficiaries, CMS has agreed to notify beneficiaries when Medicare denies a claim using a Local Medical Review Policy (LMRP).

Starting Jan. 1, all denials that result from LMRP must provide a message to beneficiaries, citing the fact that an LMRP was applied to their denial and directing Medicare beneficiaries to customer service for more information on the LMRP in question.

Reimbursement experts are hailing this new LMRP flag, and the spotlight it throws on discrepancies between national coverage decisions and local decisions, as an opportunity to redress an overbearing percentage of HME claims denied by LMRPs.

“This, to me, is the most important issue on the plate for DME,” said Randy Sease, a compliance officer with Randy Sease Associates in Columbia, S.C. “It’s at the core of all the problems DME suppliers have.”

Sease said that claims denials, and the sometimes consequential penalties, are a major reason why HME providers look unscrupulous and fraudulent in the eyes of Congress and the public. Since inconsistent LMRPs give rise to many claims denials, and since many of those denials are overturned on appeal, he argues that consistent LMRPs would do away with a lot of the denials.

“The bottom line is [the DMERCS] are denying claims that would be paid if they looked at national coverage decision and not LMRP,” said Sease. “They don’t even look at them. They are denying claims based on LCD-9 codes.”

Typically, about one of every four claims submitted to the DMERCs is denied, according to data aggregated by Remit Data. A lot of those denials are caused by provider error (and are later routinely corrected), said Bently Goodwin, president of Remit Data in Memphis, Tenn., but some of the blame also lies with the DMERCs.

“In a lot of instances, the DMERCs make things so nebulous that people don’t know how to submit claims properly,” said Goodwin.”

That, said Sease, is the problem with LMRPs. The DMERCs don’t ask at the outset for the documentation that HME providers might later use to overturn the denial on appeal.

“It’s not fair to deny a claim when you tell [HME providers] they don’t have to send in this documentation at the outset,” he said. HME