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David McGill Blogger

A New OIG Report ... On MAC Region D

Posted by David McGill | September 11, 2013

In a new report titled Durable Medical Equipment Claims Paid by Noridian Healthcare Solutions, LLC, Did Not Always Meet the Requirements of the Local Coverage Determination for Lower Limb Prostheses, the OIG presents the results of a review of all lower limb prosthetic claims paid in Region D between January 1, 2010 and December 31, 2011.

The Findings

  • During the two years studied, Noridian paid $207.9M for 70,145 lower limb prosthetic claims. (Average value per claim: roughly $2,964)
  • Out of that amount, OIG identified $96,509 in claims that failed to meet the LCD's requirements. That's only .05% of the total amount paid.
  • In addition, Noridian on its own identified another $1.4M in non-compliant claims during the relevant time period. That's another .7% of the total amount paid.
  • The reasons for most of these denials fell into one of 2 categories: (1) claims with missing or incorrect functional level modifiers (e.g., approving L5930 for K3 or lower patients); or (2) claims with unallowable combinations of components.

Region D's Response

Noridian, the MAC contractor for Region D, replied with a lengthy list of measures it has taken to purportedly try to improve O&P compliance with the LCD, including:

  • initiating a widespread complex medical review for L5673 and L5301 (August 2012 - ongoing);
  • initiating a widespread complex medical review for L5980, L5981, and L5987 (January 2013 - ongoing);
  • mailing an O&P "specialty booklet" to 499 suppliers in Region D previously identified as having previous claim errors (January 19, 2013);
  • hosting an in-person seminar for an O&P round table session in Utah (April 16, 2013);
  • hosting a webinar on Lower Limb Prostheses (May, 2013);
  • presenting at the Northwest American Academy of Orthotists and Prosthetists meeting in Washington state (May 2013);
  • hosting an in-person seminar for an O&P round table session in Missouri (May 14, 2013);
  • hosting an in-person seminar for an O&P round table session in Iowa (June 4, 2013);
  • hosting an in-person seminar for an O&P round table session in Nebraska (June 6, 2013);
  • hosting an in-person seminar for an O&P round table session in Los Angeles (July 23, 2013); and
  • hosting an in-person seminar for an O&P round table session in San Diego (July 25, 2013).

What does this mean for you?

First, the findings demonstrate that the overall dollar amounts erroneously paid by Medicare represent a tiny fraction of all lower limb prosthetic claims. (3/4ths of 1%, to be exact)

Second, even at that small percentage, OIG can still point to a seven-figure amount (combining Noridian's own investigation with OIG's) that Medicare should not have paid because of the supplier's alleged non-compliance with the LCD.

Third, and perhaps most interesting, Noridian responded to these findings with a comprehensive list of activities undertaken to try to educate O&P's. While that might look like overkill given the low percentage of "bad" claims, (1) as noted above, the total amount still exceeds $1M, and (2) perhaps more importantly, Noridian has laid the foundation for arguing that future similar results in its Region can't be chalked up to its failure to educate suppliers. Or stated inversely, Noridian may argue that future noncompliance with the LCD represents either willful or reckless disregard for established Medicare policy and the MAC's numerous teaching efforts.

What should you do?

Again, as we keep saying in post after post, know the LCD backwards and forwards. If you need a quick-start guide, review our recent 4-part series breaking down the LCD's requirements. Also print out and actively review the actual LCD document.

O&P remains in the crosshairs, not only in Region D, but everywhere. Your long-term survival depends in significant part on your ability to file Medicare-compliant claims. There are no shortcuts. The LCD is the blueprint for doing exactly that.

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