'Rubber stamp' approach leads to denials for diabetes claims

Friday, September 14, 2012

YARMOUTH, Maine – When it comes to the staggering error rates for diabetes test strips, providers say don't blame them.

“The only thing I can do is laugh,” said Dave Doubek, president of Doubek Medical Supply in Alsip, Ill. “There’s no way 99% of providers don’t know how to do strips. Either their rules are too stringent or they are not educating people.”

A recent prepay review in Jurisdiction B reported an error rate of 99.5%. The most common reason for denial: insufficient documentation.

Not so fast, say providers, who suggest auditors often aren’t reviewing the documentation they receive thoroughly.

“They are denying a lot of our claims incorrectly for lack of refill request or lack of delivery,” said Peggy Vaughan, a Medicare billing rep for Carolina Diabetic Supply in New Bern, N.C. "That's automatically something we send."

Upon appeal—often all the way to the administrative law judge (ALJ)—most of those denials are overturned, says Kathy McKenna, a billing supervisor at Carolina Diabetic Supply.

"We have an excellent rate at the ALJ level," she said. "And we have a good rate at the first level of appeals (re-determination)."

It shouldn't have to be this way, but paying contractors to find denials just sets the system up for failure, says Marcus Suess, president of Fletcher, N.C.-based All-States Medical Supply. Currently, about 70% of his claims get audited, but a majority of those are eventually approved.

"They rubber stamp it 'denied' without looking at it, I believe," he said. “We send in the same exact documentation (on appeal), and the majority are passed. Their reasoning is all over the place."

The problem has gotten so bad—All-States' audits have gone from about 30 per month to 300—Suess has had to outsource to respond to them.

"We can't handle it here," he said. "We don't know where the relief is."