LSO SMRC Audits
The purpose of this article is to review SMRC audits, including the current LSO project, and help you understand your options for further review and appeals.
What You Need to Know
Noridian is the current Supplemental Medical Review Contractor (SMRC) performing medical reviews to determine if past claims billed to Medicare were compliant with coverage, coding, payment, and billing practices. Its projects are assigned by CMS based on vulnerabilities and/or issues identified by internal data analysis as well as several other professional organizations and federal agencies, such as the CERT program and OIG.
One of the current SMRC projects focuses on Lumbar-Sacral Orthoses (01-109). Over the past several years, many different entities have flagged potential fraud involving back braces. CERT reports indicate an increase in improper payments for LSOs from 2020 to 2022. Earlier this year, the SMRC also recognized a peak in utilization of HCPCS code L0631 in 2021 and 2022. Because of this information, CMS tasked the SMRC with conducting medical reviews on claims billed with HCPCS code L0631 for dates of service from January 1, 2021 through December 31, 2022.
Noridian will notify providers of an SMRC audit with an Additional Documentation Request (ADR) for the claim(s) they are reviewing. Once the review is complete, Noridian will send a Review Results Letter with the claim(s) information and detailed findings. Noridian is required to report any improper payments back to CMS, and the DME MAC will then complete the process for overpayment recoupment. Noridian is also responsible for providing a "Discussion and Education session" (D&E), if requested by the provider. The D&E session allows Noridian to give more information to the provider about their review, including payment recommendations, discussion of the rationale for their findings, and education about coverage, coding, and payment policies to avoid future denials. Providers have a right to request a re-review from Noridian by submitting additional documentation, and they are also able to appeal the overpayment request with their DME MAC.
What this Means for You
The SMRC is currently performing post-payment audits on Medicare claims for L0631 with a DOS in 2021 and/or 2022. If you receive an ADR, it is important to respond and submit documentation for the identified claim(s) within 45 days. Once Noridian receives your documentation, they will review and mail a Review Results Letter within 30 days. If documentation is not received, your DME MAC will be notified, and they will send a notice of overpayment for the audited claims.
If the Review Results Letter indicates that any of the claims were paid incorrectly, you have 14 days to request a Discussion and Education (D&E) session or a re-review. A re-review should only be requested if you realize that you did not provide all documentation to support the services rendered, and that additional documentation must be submitted within 30 days of the review letter. During the D&E session, Noridian will provide further education based on the review, and will also let you know if any documentation was missing. You will then have another 14 days to submit additional documentation and request a re-review. Again, if you do not reply to the Review Results Letter, Noridian will refer the denied claims to the DME MACs for recoupment after 60 days.
After it completes the re-review, Noridian will send a final Review Results Letter within 14-30 days following its receipt of the additional documentation. Thirty days later, they will also send any claims that are still deemed improper payments to the DME MACs. You will receive a separate demand letter from the DME MAC for this overpayment. If you disagree with the decision, you have 120 days to file an appeal with the MAC.
It is very important to thoroughly read the letters you receive from the SMRC (Noridian) and DME MACs (Noridian or CGS). They will not only notify you of the audit, but they will inform you of your options for a D&E session, re-review, and/or appeal. Each letter will also provide detailed instructions on how to properly submit your request back to the SMRC or the DME MAC. You can review a flowchart for the SMRC audit process here.
For more information on the current SMRC LSO project, visit the Noridian SMRC website.