Documentation Woes

Documentation woes are surfacing across all product categories. The need to prove the medical necessity of the equipment and supplies you provide is high priority when your claims are under scrutiny by Medicare auditors.

For example, the Jurisdiction A DME MAC completed a prepayment review of nebulizer claims (E0570) based on the local coverage determination in November 2010. Of 211 claims that were evaluated from 101 suppliers, the DME MAC found a 67.7 percent claim denial rate. According to RemitDATA, the overall denial rate on such claims that go through and are not audited in detail is 15 percent. But if all the claims were scrutinized at the same level as in the prepayment review, the denial rate would increase considerably.

You need to pay close attention to the reasons for denial of your claims based on clinical documentation. Obtaining documentation prior to dispensing and/or billing is going to become the new norm as more and more providers fall prey to the various auditing bodies and their decisions, which can lead to devastating take-backs.

The problem is counting on physicians to know how to chart based on the various LCDs. This means you usually don't know what is in the charts until it is too late and the audit is in full swing, so you are relegated to notes that may not meet compliance in the eyes of the auditors.

Based on the review of documentation received in the Jurisdiction A prepay review of nebulizer claims, the primary reasons for denial were:

• Insufficient clinical documentation in medical records to support medical necessity:

  • No reference to payable diagnosis or condition requiring nebulizer use;
  • No physical findings on exam justifying use of a nebulizer;
  • Documentation states patient is no longer using nebulizer by MD advice or non-compliance;
  • Documentation focuses only on other medical issues unrelated to nebulizer treatment;
  • Physician did not sign clinical documents, exam reports or progress notes.

• No medical records were received with the claim for clinical review.

• No proof of delivery to support the item ordered was received by the beneficiary.

• No detailed order was available, or the detailed order received was incomplete, i.e., no patient name, no MD signature, incomplete description of the items ordered and orders undated.