By: Michelle Hamel

We’ve all heard the saying, the numbers don’t lie. But almost every one of us knows how easy it is for statistics or figures to be manipulated or mis-interpreted. Take, for example, the latest Medicare Fee-For-Service Payments Report released by the Comprehensive Error Rate Testing (CERT) team, which shows that during fiscal year 2009:

• Medicare overpaid DME suppliers by $5.4 billion.
• 51.9% of all DME claims were improperly paid.

Looks bad, right? In a time when healthcare reform is front-and-center in congress and reducing Medicare waste is one of the biggest targets, these figures seem to paint a giant bulls-eye on an industry already suffocating under a chokehold of new billing regulations. In fact, we’ve all born witness to reports in the media showing how this DME product is overpaid or how easy it is for that DME product to be billed fraudulently.

But what if I told you the reason these figures are so high isn’t because Medicare is using poor judgment when paying claims, but rather the result of a regulation crack-down? I know… reason stands that if payments are being made more stringently, then the error rate should be lower, not higher, but bear with me here.

As any supplier in today’s DME industry can attest to, getting payments for legitimate claims is harder than ever before. With accreditation and surety bond requirements, increased scrutiny from CMS and the pending implementation of PECOS, many of today’s suppliers are struggling to stay afloat in a sea of ever-changing regulations. And if you’ve recently undergone an audit, you know firsthand that it’s a whole new ball game. (For an easy way to keep up-to-date on Medicare reimbursement requirements, see Vista Notes.)

So how does this impact the overpayment and paid error rate figures above?

Anyone who happens to do more than glaze over the initial statistics, will find that the CERT team attributes 2009′s high error rates directly to an increased enforcement of documentation requirements and a decrease in the allowance of contractor judgment.

“In the past, reviewers applied clinical review judgment to claims to fill in the gaps of knowledge where documentation was missing. Once CMS clarified that clinical review judgment may not override documentation requirements, more errors were found on DME items. Additionally, it is often more difficult for DME contractors to obtain the proper documentation because they request documentation from the supplier who billed for the item, not the medical professional who ordered the item. The supplier then is responsible for submitting documentation to CMS that they have collected from the ordering provider. The involvement of multiple parties can cause a delay in documentation receipt and incomplete documentation. CMS also recently clarified that documentation produced by the supplier alone is insufficient to warrant payment of the claim.”

As unfair as it may seem for a supplier’s claim to be denied due to the physician’s failure to dot all the i’s and cross all the t’s, suppliers are ultimately responsible for ensuring documentation requirements for the services they provide have been met.

The increased payment error rates are also partially attributable to a new policy (implemented by CMS at the recommendation of the OIG) that prevents audit contractors from looking at a claim’s billing history as an additional source of information. CERT provides the following example of how a once payable claim was denied during a review based on this new policy.

“CERT reviewed a claim for a bedside commode. The supplier provided the treating physician’s signed and dated order to the CERT Contractor indicating a 79 year old patient was recovering from a total knee replacement. A review of claims history showed the beneficiary had a Medicare covered inpatient hospital stay for total knee replacement with a comorbid diagnosis of urinary tract infection shortly before this claim. The policy states a commode is covered when the patient is physically incapable of using regular toilet facilities. The CERT Contractor would have previously determined that the total knee replacement combined with the urgency of urination associated with a urinary tract infection was sufficient to meet this requirement. Now, however, the CERT contractor may not use claims history as a basis for payment. CERT would not know the patient had urinary incontinence unless a medical record indicating the condition was also submitted.”

And to top it all off, previously paid claims with illegible physician signatures are now receiving requests for recoupment as well. This is a scary thought for suppliers, as virtually every claim is subject to denial based on this technicality. Let’s face it; have you ever been able to read your doctor’s handwriting, much less their signature?

“In the past, if the provider’s signature was missing or illegible, and there were no other reasons for denial of the claim, the CERT contractor did not deny the claim. After consultation with the OIG, CMS issued instructions to the CERT contractor directing them to strictly adhere to the CMS policy requiring a legible identifier.”

If one of your claims is being audited and the physician signature is illegible, we recommend that you proactively get an attestation statement from your physician certifying that the signature is indeed theirs. (For information on how to develop a thorough intake process, including physician signature and documentation requirements for general DME, download DME Billing 101.)

So what does all this say about 2009′s $5.4 billion in overpayments and the 51.9% error rate?

In a nutshell, legitimate payments that otherwise would not have been denied are now being audited and recouped based on technicalities. What these numbers show is not that Medicare is improperly paying claims where there is no true medical need. Rather, they represent the learning curve taking place as DME suppliers transition from a Medicare world with a “read between the lines” grey area, into a sink or swim world of only black and white.

By: Michelle Duncan

As a reminder, signature and date stamps are no longer deemed acceptable by CMS. Due to the abuse and misuse of stamps, physicians must sign CMNs and DIFs with either a hand-written signature or an approved electronic signature. Attendee or RN signatures are not acceptable.

Faxed documents will still be accepted, provided they contain a hand-written or compliant electronic signature.