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David McGill Blogger

Four Reports, One Interpretation

Posted by David McGill | November 07, 2013

With a new OIG Report on MAC Region B published last week, the OIG has issued a report on each of the 4 Medicare Regions since July, 2013. All reviewed whether the MACs properly used “claim processing edits” – in other words, a computerized review of claim data – to identify claims that failed to comply with the Local Coverage Determinations.

Key Finding

  • In each of the reports, the percentage of claims failing to meet LCD requirements was small, ranging from a high of only 1.2% to a low of .05%. 

So, one might ask, why is the OIG releasing multiple reports showing that the vast majority of prosthetic claims paid for by the MACs were correctly paid? One explanation is that the OIG's target isn’t O&P, but rather, the MACs themselves. When viewed in this light, the OIG’s actions make more sense. 

The MACs’ claim processing edits should detect obviously improper submissions: for example, delivering an L5987 (K3) foot to a patient classified at a K2 functional level. But for a small percentage of prosthetic claims, that isn’t happening. And even though the percentages are tiny, the total dollars add up: in total, the OIG reports suggest that the MACs paid over $8M in claims during the 2009-2012 time period that (a) fail to meet basic LCD requirements, and (b) purely computerized claim review software should have caught but, for some reason, didn’t.

What does this mean for you?

 The bad news is that these reports still bring the words “OIG” and “prosthetics” into the same sentence, suggesting to the casual reader that prosthetics remains a hotbed of fraud or abuse. But the actual data paint a very different picture: the vast majority of claims – over 99% of them in 3 of the 4 Medicare regions – comply with the LCD’s requirements based on a review of the MACs’ applicable claim processing edits.​

It's therefore important when speaking to policy makers and payers to get beyond the headlines and focus their attention on the details of these OIG reports. The numbers demonstrate that virtually all O&P claims satisfy the MACs' claim processing edits. And given where the O&P industry has been over the last 2 years, this is good news.

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