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Medical Necessity Dominates Documentation Audits

In today’s environment of heightened fraud and abuse scrutiny, the compliance implications for providers, often focused on therapy, increase the risks of practice.   Solid, consistent documentation that supports medical necessity and ongoing education for clinical staff is critical to ensure that providers protect their billed revenue.  Below are some highlights that emphasize the plan for increased scrutiny.

  • Probe reviews will begin shortly across the U.S. on “high” billers using the KX modifier.  These reviews will seek appropriate justification of medical necessity for continuation of services.
    • Providers need to be mindful of the relationship between LOS, RUGS classifications, and ADL scores as a disconnect among these three is a red flag for audit.
    • All reviewers have been instructed to obtain the diagnostic tools used for therapy evaluations as part of the rebuttal for patients.
    • CMS has suggested each state hire an RA (Recovery Auditor).
    • RAC’s fall short in 3rd quarter by $82.5 million.
      • CMS indicates the current RAC process is not meeting recovery audit financial goals and plans to introduce new, more aggressive recovery goals.  
      • Miscoding “could” fall under the False Claims Act and considered “Abuse”; insufficient remediation may pass the provider from CMS directly to the DOJ.
      • As a result, ZPIC audits are projected to increase in 2012.

Change to Procedure for Making Corrections for Automated LCD/NCD Denials

Effective December 27, 2011, National Government Services will accept provider-initiated electronic adjustments to claims that have been fully or partially denied by automated edits for national coverage determinations (NCDs) or local coverage determinations (LCDs). As of that date, it will no longer be necessary to submit a written request to National Government Services to adjust these claims to add or change diagnosis codes, or to make other revisions to the claim data.

Good news for providers as this eliminates the need for a formal appeal.  And as many of you know, filing an appeal is a costly, time consuming and non-productive process for all of those involved in gathering and reviewing the records & formulating an appeal letter.  It also delays payment in cases in which the decision is overturned.  This new ability to simply adjust the claim and re-submit, allows providers to collect payments in a more timely fashion and avoid tedious processes.

To improve efficiency of the process for correcting these errors, National Government Services will accept provider-initiated adjustments for these denials. If a claim or line item has been denied without medical review, that is, no additional documentation request (ADR) was sent to you and no documentation was submitted, the provider may correct the claim through the regular electronic claim adjustment process.

Claims for which these adjustments will be accepted are those with line item denial reason codes 55A00, 52NCD, 53NCD, or 54NCD. The adjustments should be submitted with claim change reason condition code D1, "changes to charges."

The provider should enter the appropriate corrections to the diagnosis or other codes that resulted in the LCD/NCD denial, enter covered charges for the line item(s) involved, and enter adjustment reason code "LN" (Provider adjustment to correct LCD/NCD error).

Please note that this change does not apply to claims that have been denied through post-payment processes by National Government Services or other entities such as a recovery audit contractor (RAC), program safeguard contractor (PSC), zone program integrity contractor (ZPIC), or Comprehensive Error Rate Testing contractor (CERT). The appeals process must be used for claims denied through post-payment reviews.


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Tags: LCD, NCD