We have good news and bad news. Which do you want to hear first?

The good news is that you will soon see, if you haven’t already, an uptick in Medicare payments. CMS temporarily authorized reducing the payment floor hold time from fourteen to zero days, so claims will pretty much pay once they are approved.

The bad news? It is just a brief timing difference. The MACs are transitioning to a new financial accounting system, and the temporary acceleration of the payment floor processing times are to flush the old system before engaging the new one.

Once the conversion is complete, the MACs will resume making payments on the normal fourteen-day processing schedules, and since the payment floor is starting from at or near zero, payments for the two weeks after the transition may be sparse.

​The transition schedule to the aptly named Healthcare Integrated General Ledger Accounting System, or HIGLAS, varies by region. The following table summarizes key transition dates:

Since remittances flow directly to clearinghouses and supplier billing systems, we recommend tracing payments closely during the transition. Aside from the obvious timing differences, the claims processing systems should not be impacted. That said, it is a good idea to make sure claims sent out make it back as remittances and payments.

SOURCE LINKS
https://cgsmedicare.com/jb/higlas/index.html
https://cgsmedicare.com/jc/higlas/index.html
https://med.noridianmedicare.com/web/jadme/article-detail/-/view/6547796/healthcare-integrated-general-ledger-accounting-system-higla-1
https://med.noridianmedicare.com/web/jddme/article-detail/-/view/2230715/healthcare-integrated-general-ledger-accounting-system-higla-1
​

Let's be honest. Sometimes filing claims feels a bit like being guilty-until-proven-innocent.  Nowhere is that more so than denials for same and similar equipment. Fortunately, suppliers can make a strong case for reimbursement right out of the gate with clear and concise claim form narratives. In this article, the last in our narrative series, we offer examples designed to avoid same and similar denials related to oxygen restarts, breaks in service, and breaks in need.

Break in Service or Interruption in Billing

For capped rentals and the first 36 months of oxygen rentals, reimbursement gaps due to the following are considered breaks in service (BIS) or interruptions in billing:

• Hospitalization.
• Skilled nursing facility admission.
• Policy switches (e.g. between Medicare and Advantage plans).
• Non-compliance.
• Patient refusal to use equipment.

During these episodes, claims are not billable even when the patient continues to need the equipment. If the patient resumes a billable rental at a later date, the original rental should pick up where it left off in the previous cycle. The rental does not start over.

By default, the payer will deny the claim as billed past the expected cap. The narrative must explain why the supplier stopped billing the rental and request the payer approve an extension of the payment cycle.

Break in service sample narrative (24 characters):

Break in Medical Need or Change in Condition

If a beneficiary has equipment for a condition that substantially improves and, for three months or more, no longer needs their equipment, Medicare classifies the patient as having a break in medical need. If the same beneficiary has a new need for the same or similar equipment, Medicare can approve a new rental even though the patient used the same or similar equipment during a prior episode. To qualify, the medical record must clearly document the medical need from the prior episode ended.

By default, the payer will deny the claim as billed past the expected cap or same and similar to equipment in history. The narrative must clearly establish a break in need pathway, the end date of the first episode which prompted pickup of the equipment, the original diagnosis, the delivery date for the second episode, and the new diagnosis.

Break in medical need sample narrative (60 characters):​

Oxygen Restart Because of Prior Supplier Bankruptcy

Bankruptcy is another exception to the useful lifetime protocol. If a company stops servicing an oxygen beneficiary after filing for bankruptcy, Medicare can make an exception and start a new rental. Bankruptcy effectively renders the equipment lost. The payer will require proof of court documents to verify the bankruptcy claim.

By default, the payer will deny claims for new equipment as billed past the expected cap or same and similar to equipment in history. New suppliers are instructed to append the RA modifier on the first replacement claim. The narrative must clearly identify the equipment, invoke special consideration under the bankruptcy protocol, and confirm the type of bankruptcy as Chapter 11 (reorganization) or a Chapter 7 (liquidation).

Oxygen restart due to bankruptcy sample narrative (39 characters):​

Oxygen Restart After Previous Supplier Exits the Program

Supplier abandonment is another exception that permits a restart of oxygen rentals prior to exhausting a useful lifetime. In some cases, suppliers must exit a business unexpectedly. Where possible, exiting suppliers are expected to find a competitor to take over the existing rentals (invoking a simple change in supplier where the existing rental cycle continues and does not restart). However, if the exiting supplier does not make these arrangements, the oxygen equipment is considered “lost” and it becomes eligible for early replacement.

By default, the payer will deny claims for new equipment as billed past the expected cap or same and similar to equipment in history. New suppliers are instructed to append the RA modifier on the first replacement claim. The narrative must clearly invoke special consideration through the supplier abandonment or voluntary exit protocol.

Oxygen restart after supplier exit sample narrative (39 characters):​​

Good narratives can go a long way in avoiding lost revenue and additional collection work. Just remember to use them … and keep them short so they fit … but use common abbreviations to avoid confusion in claims processing. And if you want to go back and read the other articles in this series, you can do that here and here.

Based on OIG recommendations suggesting the Medicare program overpaid more than $90 million for 2017 nebulizer claims, CMS is asking certain DME suppliers, under the administrative authority bestowed by the 60-Day Overpayment Rule, to perform a self-audit of six years worth of claims. Once results are tabulated, CMS expects voluntarily refunds of any overpayments.

Every supplier should be troubled.

In a report issued by the OIG in October, the agency looked at 2017 claims for nebulizer medications. Medicare processed a total of 2.3 million claim lines for nebulizer medications in the time period analyzed, but the OIG only reviewed 120 of these from 65 different suppliers. 43 of the suppliers submitted 81 error free line items. The remaining 22 suppliers submitted 39 line items with errors. The OIG sample reviewed 0.005% of the claim population, but based on extrapolation the agency suggests the program overpaid suppliers by $92.5 million.

Such a small sample should not be considered credible in the context of the claim universe or even for the individual suppliers. Nonetheless, CMS is imposing a huge administrative burden with high costs by leaping to unsubstantiated conclusions and imposing the six-year lookback.

This is the second time CMS imposed self-audit requirements in the DME space. In June of 2018, the OIG looked at 110 out of 7 million PAP resupply claims (0.00157%). The OIG found 86 errors from 82 different suppliers (roughly one claim per supplier) totaling $13,414. By extrapolating the error rate, the OIG suggests there is as much as $631 million in overpayments to be recovered.

Not for nothing, this fascism doesn’t appear limited to DME providers. In an OIG report issued in June 2019, the OIG looked at 426 of 2 million polysomnography claims (0.02%). The OIG found 150 errors from 117 different providers (a little more than one claim per provider) totaling $56,668. The OIG recommended CMS notify the 117 providers of the overpayments in accordance with the 60-day rule, and once again, CMS obliged.

Aside from the obvious credibility concerns, more troubling by far is CMS’s blind application of the sanction before suppliers can contest the accuracy of the OIG findings or pursue their due process under the five levels of Medicare appeals. Nonetheless, this new trend is becoming the norm.

SOURCE LINKS
https://oig.hhs.gov/oas/reports/region9/91803018.pdf
https://www.govinfo.gov/content/pkg/FR-2016-02-12/pdf/2016-02789.pdf

The Supplemental Medical Review Contractor (SMRC) recently announced an audit of excess diabetic testing supplies with service dates between January 1 and June 30, 2019. That’s not the interesting part.

The interesting part is that this audit may have significant implications for the referring physician.

If the auditor is not satisfied with the medical records during the supplier audit, the SMRC will proceed to the referring practitioner’s claims for the express purpose of assessing the underlying evaluation and management services. In other words, missing or deficient medical records in the supplier audit may suggest unsupportable practitioner claims.

The reliance on medical records is not new. The recognition, however, that suppliers are not the only ones accountable for deficient practitioner records is.

The good news is that the larger scope combined with good communication between suppliers and practitioners should go a long way in securing medical records that properly support claims for excess units of diabetic testing suppliers.

On the other hand, poor supplier intake and/or audit response practices can create unnecessary hassle for referring practitioners. The ill-will created if a referral source is targeted because the supplier simply did not submit medical records with their own audit response is a sure way to jeopardize the business relationship.

If you have any questions, ask us directly at the 2020 Look Ahead for DME Suppliers!