Check New Rules On Removal of LCA

In December, the DME MACs were instructed by CMS that they can no longer make partial payment for claims based on a “least costly alternative” (LCA) determination. For claims with dates of service on or after Feb. 4, 2011, the following rules apply under this new guidance:

1) If the Local Coverage Determination (LCD) currently states that an item will always be paid based on allowance for the least costly item (if the criteria for the less costly item are met), then under the new policy, a claim for that item will always be denied as not medically necessary (Type 1 LCA denial).

2) If the LCD currently states that an item will be paid in full if specific additional coverage criteria are met but will be paid based on the allowance for the least costly item if the additional coverage criteria for the billed item are not met (and if the criteria for the less costly item are met), then under the new policy, a claim for that item will be denied as not medically necessary if all of the additional coverage criteria for that item are not met (Type 2 LCA denial).

1. The claim will be paid in full if the additional coverage criteria are met.
2. If a KX modifier is required to attest to the additional coverage criteria being met, claims without a KX modifier (and with a GA, GY or GZ modifier) will be denied.

Billers need to be aware of this change so they can gain additional documentation to prove the medical necessity of the item being dispensed/billed — and know how to work these denials when they are received. If a base code for an item of DMEPOS is denied as not medically necessary, all related accessories, supplies, additions and drugs also will be denied as not medically necessary.

Least costly alternative statements are found in the following LCDs (note that the information may not be all-inclusive, so refer to each LCD for details): ankle-foot/knee-ankle-foot orthoses; canes and crutches; cervical traction devices; commodes; enteral nutrition; external breast prostheses; external infusion pumps; glucose monitors; hospital beds; knee orthoses; manual wheelchairs; nebulizer equipment and related drugs; patient lifts; pneumatic compression devices; PAP devices; power mobility devices; respiratory assist devices; seat lift mechanisms; surgical dressings; therapeutic shoes for persons with diabetes; tracheostomy supplies; urological supplies; walkers; wheelchair options and accessories; and wheelchair seating.

One thing to be aware of regarding capped rental DME items: Elimination of LCA determinations will apply only to claims in which the date of service for the initial rental month is on or after Feb. 04, 2011. If an LCA determination is made on an item with an initial rental month DOS prior to that date, subsequent claims for that item will continue to be adjudicated using the LCA determination for the duration of that rental period. If an item is denied in full due to elimination of the LCA, partial payment based on the LCA will not be possible through the appeals process.

For items that were previously paid based on an LCA determination, suppliers can receive partial payment at the time of initial determination if they elect to bill using one of the upgrade modifiers, GK or GL.

Thanks to RemitDATA, 866/885-2974 or www.remitdata.com, for supporting data for this column.

Read more Working Down Denials columns.

Sarah Hanna is a reimbursement consultant and vice president of ECS Billing & Consulting, Tiffin, Ohio, and specializes in proper billing protocols, Medicare coverage guidelines and billing office procedures. You can reach her at 419/448-5332 or [email protected].