Home Health & Hospice Week

Changing standards for Medicare's payment error rate reports are giving durable medical equipment suppliers a bad name.

The Centers for Medicare & Medicaid Services toughened up its medical review procedures for the latest Comprehensive Error Rate Testing (CERT) report, now called the Improper Medicare Fee-For-Service Payments report.

Old way: The CERT contractor reviewers formerly looked at many elements including the clinical record and previous billings to determine a claim's validity.

New way: "Now, CERT requires medical records from the treating physician and does not review other available documentation or apply clinical review judgment," according to the report for fiscal year 2009. The records must include valid signatures as well, CMS says -- no stamps, for example.

The result: The FY 2009 report doesn't break out error rates by provider type, but it does list them by contractor type. The error rate for DME Medicare Administrative Contractors (DME MACs) is a whopping 51.9 percent, the report says. That's up from a 9 percent error rate for DMERCs in the May 2008 CERT report.

"CMS' stricter adherence to policies disproportionally affected DME claims," CMS admits in the report. "More DME claims were determined to be paid in error because of the more strict enforcement of documentation requirements rather than allowing for clinical review judgment."In comparison, the error rate for non-inpatient intermediaries/MACs was only 3.9 percent.

The DME error rate represents $5.4 billion in improper payments while the non-inpatient MACs' errors totaled $4 billion. Inpatient MACs and Part B carriers/MACs' totals were higher -- $6.1 billion and $7.6 billion, respectively -- even though their error rates were smaller -- 5.5 percent and 9.7 percent. That's because total payments for those contractors are much higher than DME payments.

Watch out: Even though home health agency and hospice payments are within the low non-inpatient MAC category, CMS isn't leaving them alone. Home health is a "high risk area," CMS says in the report.

CMS lists some examples of DME claims the CERT contractor nixed in compiling the report. For a group 2 power wheelchair, reviewers found "neither the diagnoses submitted, nor the face to face evaluation received from the physician's office, supported the inability to self-propel," so the entire $5,048.72 payment was recouped.

In another example, a certificate of medical necessity (CMN) for oxygen was missing multiple elements, including the results of the oxygen saturation test and the oxygen flow rate. The CMN was also signed and dated four months after the claim was adjudicated. "The reviewer determined that the record did not meet medical necessity criteria per the LCD [Local Coverage Decision] for Oxygen and Oxygen Equipment," the report says.

Finally, the report lists an example of a case where the claim would have been deemed valid under the old rules. A supplier provided the treating physician's signed and dated order for a bedside commode to the CERT contractor indicating a 79-year-old patient was recovering from a total knee replacement. "A review of claims history showed the beneficiary had a Medicare covered inpatient hospital stay for total knee replacement with a comorbid diagnosis of urinary tract infection shortly before this claim," CMS explains. "The policy states a commode is covered when the patient is physically incapable of using regular toilet facilities. The CERT contractor would have previously determined that the total knee replacement combined with the urgency of urination associated with a urinary tract infection was sufficient to meet this requirement." But now, the CERT contractor doesn't use claims history, so it wouldn't know the patient had urinary incontinence unless the supplier submitted a medical record indicating the condition, CMS points out.

Don't blame suppliers: The high error rate should reflect poorly on CMS, not suppliers, maintains the National Association of Independent Medical Equipment Suppliers. The rate "is a clear indication that complex policies, unclear guidelines, lack of understanding, or a combination of all three is the root cause," NAIMES protests. The report "shows that the fault lies with CMS and their driven attempt to label this industry as crooks."

The review criteria are taking decision-making out of the hands of physicians, industry proponents claim. "It ... shows that physicians are being second-guessed by contractors who are paid based on money recouped, not on reality," NAIMES insists.

"CMS must take major steps to revamp medical policy and coverage criteria to clean up their policies and make them easier to understand and follow."