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David McGill Blogger

Running the Functional Level Gauntlet

Posted by David McGill | August 24, 2012

The Medicare Administrative Contractor for Region A has announced the results of a complex prepayment medical review of prosthetic claims using the K3 functional level. The key findings were:

  • after medical review, Medicare denied nearly 3/4ths of the claims (74.2%);
  • 57% of the denied claims lacked clinical documentation to corroborate the prosthetist’s records and support medical necessity;
  • 7% of the claims lacked functional level documentation from the prosthetist;
  • 22% of the claims involved clinical records that didn’t justify the billed functional level.

Based on these results, the Region A MAC has stated that it will continue to review K3 claims. Notably, 1/3rd of the total denials center on the failure to adequately document or corroborate (through physicians’ notes) the patient’s functional level appropriately.

So what can you do?

First, make sure that your records adequately document the patient’s functional level in detail. Given the explicit guidance around K levels from the MACs and RACs over the last 12 months, a 7% prosthetist functional level “fail rate” is too high.

Second, and perhaps more important, you must take the time to make sure that the prescribing physician’s records corroborate yours. The majority of functional level denials referenced by MAC Region A have occurred because the doctor’s records either contradict or, more likely, remain completely silent about the patient’s functional level.

Medicare has made its position crystal clear: what’s in the doctor’s records should support the prosthetist’s findings and vice versa. Whether you like it or not, a key element of running a successful prosthetic practice in 2012 depends on a strong, collaborative relationship with the prescribing physician. The days of sending off a requested prescription, having the physician rubber stamp it, and getting paid by Medicare without any questions are over.

This no doubt presents enormous challenges to suppliers who have difficulty addressing these requirements. But it’s also an area of enormous opportunity for those who figure out a way to effectively manage them. The companies that adapt quickly (or that have already adapted) will have a significant competitive advantage over those that don’t. Which camp do (will) you fall into?

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