Overturned audits should be taken into account
Tuesday, September 25, 2012

With the DME MACs consistently posting K0823 error rate percentages in the 80s and 90s, it may seem to the outside world that a large majority of providers are submitting claims for unnecessary power wheelchairs.

That’s an inaccurate assumption, say industry stakeholders.

“Part of the issue we have is that they’re not separating technical issues from true medical necessity,” said Sylvia Toscano, owner of Professional Medical Administrators. “I’d like to see auditors use better clinical judgment.”

Most recently, National Government Services, the DME MAC for Jurisdiction B, reported an error rate of 82%. The top reason for denial: medical records received did not establish medical necessity.

If the DME MACs took into consideration clinical judgment, like the administration law judge (ALJ) does as part of the appeals process, the error rate wouldn’t be so high, stakeholders say.

“If it’s a technical error, it usually gets approved (later) because ALJ will look at the big picture and determine if it was indeed appropriate,” said Toscano.

The error rate would look a lot different if the DME MACs also took into consideration denials that get overturned through the appeals process, stakeholders say. The Audit Team, for example, has up to a 70% success rate at getting denials overturned. 

“I think it’s imperative that CMS and the industry as a whole start looking at real numbers,” said Stephanie Morgan Greene, general counsel for Harrington Management Group, also known as The Audit Team. “We see the majority of claims overturned at appeal, so that denial rate is not a true figure.”

The error rates reported by the DME MACs are damaging to the industry, stakeholders say.

“It gives a black eye to the industry and to good companies out there,” said Steve Azia, a partner at Eastwood & Azia. “In the end, that means less access for people who need this equipment.” 

The solution? Better clarity on Medicare’s documentation requirements, which may be coming in the form of CMS’s electronic clinical template.

“It’s essential to put together a template,” said Azia. “The final result should be clear documentation standards that everyone understands.”