CERT Prepayment Review on High Cost Claims Shows 89% Denial Rate

NGS in Jurisdiction B recently completed an analysis of prepayment review claims focused on medical necessity in the third quarter of 2012. The claims selected were based on a selection of high dollar claims and targeted services from multiple suppliers.

The review included claims for orthotics and prosthetics and several other high priced claims including, parenteral & enteral nutrition,  power mobility devices, speech generating devices, external infusion pumps, ventilators, wound vacs, surgical dressings and oral- anticancer drugs. The DME MAC review identified 886 prepayment claims for review.  Of the 886 claims, 790 were denied resulting in an 89% claims error rate.   The common errors documented for orthotics and prosthetics were:

  • Proof of delivery is incomplete. Prosthetists must perform a final fitting of the prosthetic to the patient’s limb on the day the beneficiary takes possession.
  • Returned medical documentation does not meet criteria #1 as outlined in the Local Coverage Determination (proof beneficiary is motivated to ambulate) and criteria #2 (the beneficiary will reach or maintain a defined functional state within a reasonable amount of time).
  • Invalid signatures were found on medical records.
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