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David McGill Blogger

OIG Finds Fault with Region A

Posted by David McGill | August 18, 2013

In a new report creatively titled (take a deep breath), Durable Medical Equipment Claims Paid by National Heritage Insurance Company, Inc., Did Not Always Meet the Requirements of the Local Coverage Determination for Lower Limb Prostheses, the OIG summarizes its findings for claims filed between January 1, 2009 - September 30, 2012.

The OIG's Methodology

The data in the report arises out of testing through data analytics only, not any review of additional information provided by suppliers in response to OIG or MAC questions. In addition, OIG didn't analyze the medical necessity of the claims reviewed.

The OIG's Findings

The key results from the OIG's review are:


  • ​$450,157 worth of the claims reviewed failed to meet LCD requirements;
  • of that amount, $374,492 (roughly 83%) had unallowable combinations of components (e.g., using L5629 in conjunction with L5500);
  • another $63,583 had missing or incorrect functional modifiers (e.g., using L5930 for K3 or lower claims);
  • $9,026 used unallowable HCPCS codes (e.g., the MAC incorrectly paid for L5990, a code listed as not reasonable and necessary in the LCD); and
  • $3,056 for claims biling more than 2 test sockets per limb.
What Does This Mean For You?

First, this joins a growing list of OIG reports suggesting that prosthetists submit claims that ignore the basic requirements of the LCD for lower limb prostheses. We can expect close government scrutiny of these claims to therefore continue in the future.

Second, just last week Ossur R&R published a "Back to Basics" comprehensive series of posts on this exact LCD. In the first three parts of that series, we explicitly covered unallowable code combinations, functional level requirements, L5990, and billing an appropriate number of test sockets. In other words, we addressed each and every requirement later published in the OIG report. 

Third, you need to know the LCD backwards and forwards and integrate that knowledge into your claims process for Medicare claims. Review last week's Ossur R&R posts on the topic, as well as the final part of the series coming this week. It wouldn't hurt to review the actual LCD in its entirety also.

The requirements of the LCD are Medicare Survival 101. It's a pass/fail course. Unfortunately, failing can have a disastrous effect on your business. So study the material and nail the test (every claim you file)!


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