Keep the Sharks at Bay

At some time or another, every HME provider has most likely received a copy of a prepayment or postpayment audit letter. Prepayment letters are generated by the DME Medicare Administrative Contractor, while postpayment letters come from the Program Safeguard Contractor.

Unfortunately, many providers do not give proper attention to these letters, causing much more serious problems down the road. You and your employees need to treat any audit notices with a Priority One status.

These letters will list one or more beneficiaries the DME MAC or PSC is requesting more information about. These letters will also have a date by which they must be returned. If you miss the date, or if you do not provide all of the information requested, you are guaranteed not to be paid in the case of the prepayment letter, or to be issued an overpayment in the case of the post-payment audit letter.

The same results can also happen even if you get the information back to the MAC or PSC in time with all the required information — but without the documentation to support the medical necessity of the item.

The end result of “failing” a prepayment audit will not only mean not being reimbursed for the item but it will most likely trigger more prepayment audits in the near future. It can also cause the PSC to look at past claims and issue postpayment audits.

The situation can create a vicious cycle that may prove nearly impossible to get out of. Think of it like sharks circling. Once they smell blood, they move in for the kill.

In most cases, all of this can be avoided by explicitly following the instructions in the development letter and sending in all the qualifying information requested within the time frame allotted.

One of the biggest errors providers make is sending in a Physician Order or CMN in place of physician notes. That is not acceptable. These documents are never enough, by themselves, to prove medical necessity. You always have to back them up with documentation from the physician’s record to prove medical necessity. The PO and CMN are only considered a part of the physician notes.

In addition, remember that the physician notes you use to provide medical justification generally need to be from within three months of dispensing the item.

If you do not currently collect physician notes, it’s highly recommended that you implement this policy within your organization. Your referring physicians’ offices will, of course, resist, as it will require extra time on their part to provide you with this information.

Unfortunately, you, as the provider, will have to re-educate physicians and their staffs about the fact that the notes proving medical necessity are just as important as the CMN or the Physician Order they already provide to you in the case of an audit.

The fact is you really should collect physician notes on all equipment, but it may be easier to start by getting notes on highly audited items, such as those that require a KX modifier. If you choose not to collect physician notes as a part of your company’s intake process, please be aware that they will be asked for in any audit situation.

Don’t count on being able to go back and obtain physician notes or other supporting documentation in the case that you are audited, because you may not be able to get them within the time limit you have been given. For audits on older paperwork, for example, the physician may have moved or retired. If so, the paperwork you need may no longer be available and, again, that will result in a denial or overpayment.

To avoid an immediate overpayment or sending in an unprepared audit, call the BIU investigator who is in charge of your audit and ask for an extension.

In the case of audits, an ounce of prevention is worth a pound of cure.

Jane Bunch is vice president, HME consulting, for Atlanta-based CareCentric. A reimbursement specialist, Bunch delivers educational seminars worldwide, helps develop corporate compliance plans and serves as a consultant for fraud and abuse cases. She can be reached at 678/264-4495 or via e-mail at [email protected].