WASHINGTON — Use of the KX modifier didn't help in ensuring that DMEPOS providers had supporting documentation on file for their claims — at least in 2006, according to a new audit report from HHS' Office of Inspector General.
Of 100 claims in the OIG's sample, totaling $8,809, providers didn't have the required documentation on file for 54, totaling $4,574.
"Based on our sample, we estimated that Palmetto GBA paid approximately $127 million to suppliers who did not have the required documentation on file to support the DMEPOS items with calendar year 2006 dates of service," the report said. In 2006, Palmetto GBA was the Jurisdiction C DMERC.
The OIG audit focused on $257,925,264 of claims processed by Palmetto in 2006 for diabetic shoes, CPAP devices, respiratory assist devices and pressure-reducing support surfaces (Groups 1 and 2) that included the KX modifier.
While providers must have a written physician's order and proof of delivery for all DMEPOS, they must have additional documentation on file for items requiring the KX modifier. For example, respiratory assist devices also require documentation that a sleep study was performed before the date on the physician's order.
The types of missing documentation included proof of delivery (23 of 100 items), physician's order (20 of 100 items), use or compliant use follow-up documentation (19 of 72 applicable items), and physician's statement (5 of 28 applicable items). For 10 of the 54 items, providers were missing multiple required documents.
As a result, the OIG recommended that Cigna Government Service, the current DME MAC for Jurisdiction C:
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recover the payments for specific items claimed for which providers in the sample did not have the required documentation;
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review other payments for DMEPOS related to the unallowable sample items and recover any additional unallowable payments;
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notify CMS of the 23 suppliers that did not meet the supplier standard for maintaining proof of delivery; and
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develop a corrective action plan to improve the effectiveness of the KX modifier.
Read the complete report.
