Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Policy & Regulation News

CMS Paid $35.2M in Non-compliant Claims

By Stephanie Reardon

Medicare paid approximately $35.2 million in 2010 in non-compliant claims for PMD.

- The Department of Health and Human Service (HHS) Office of Inspector General (OIG) released the results of its audit on the Centers for Medicare & Medicaid Services (CMS). The audit focused on durable mobility device (DMD) supplier’s power mobility device (PMD) claims.

The audit was completed to determine if Medicare paid PMD claims in accordance with Federal requirements for face-to-face examinations of beneficiaries. It was determined during this audit that Medicare paid approximately $35.2 million in 2010 for suppliers’ PMD claims that did not meet Federal requirements.

To meet Federal requirements and regulations,CMS requires a physician to complete and document a face-to-face examination and write a prescription for the beneficiary prior to allowing a PMD to be covered under Medicare. The examination should be conducted by the same physician who prescribes the PMD and should be billed as an evaluation and management (E&M) service. Medicare coverage for most PMDs, require the face-to-face examination to be conducted within 120 days prior to the delivery of the PMD.

Additionally, the medical records for the examination should note what the patient’s mobility limitation is and how it interferes with the activities of daily living as well as eliminate a less expensive alternative to the PMD (e.g., cane, walker, or manual wheelchair).

CMS introduced a new optional Healthcare Common Procedure Coding System code G0372, which allowed a physician to establish and document the need for a PMD in 2005. The physician who conducts the examination may add the G0372 code to the claim when billing the Part B Medicare contractor for the E&M service.

Using this code on a claim indicates that all required information is included in the medical records for the PMD and that the prescription and supporting documentation have been delivered to the supplier.  Although the physician is still required to conduct a face-to- face examination, they are not required to use the code. However, it was discovered that Medicare did not always pay the PMD claims without corresponding G7302 codes in compliance with federal requirements for face-to-face examinations.

Out of 100 sample claims, 47 claims did not meet regulatory requirements. The 47 non-compliant claims cost $115,278. For 19 of these claims, the physicians did not conduct the required face-to-face examinations and for 28 of these claims the physicians’ medical records did not meet the minimum documentation requirements.

OIG estimated that, of the $87.4 million paid for PMD,  Medicare paid approximately $35.2 million in calendar year (CY) 2010 for non-compliant PMD claims. Medicare payments for PMD claims with corresponding G7302 claims were more likely to have met Federal requirements than PMD claims without.

The OIG recommend that CMS:

  • Adjust the 47 sample claims representing overpayments of $115,278 to the full legal extent
  • Require physicians to use the G0372 code when prescribing PMDs, and
  • Require education of physicians on the use of the G0372 code and the documentation requirements for face-to-face examinations.
  • Require DME Medicare contractors to match suppliers’ PMD claims to physicians’ G0372 claims, to help contractors to identify and review suppliers with a large number of high-risk PMD claims

In written responses CMS disagreed with two out of the four recommendations. CMS agreed with the first and fourth recommendations and did not concur with OIG’s second and third recommendations.

In response to the OIG’s  second recommendation, CMS suggested that rather than requiring use of the G0372 code, that it would use its its 3-year demonstration program testing the use of prior authorization for PMDs for ensuring accurate payment of PMD claims.

In regard to the OIG’s third recommendation, CMS indicated that it did not believe efforts to educate physicians on the use of the G0372 code were appropriate and that the use of prior authorization was more ideal to ensure that physicians conduct required face-to-face examinations and supply all necessary documentation to suppliers.

In response to CMS’s suggestion, OIG maintained that its findings and recommendations remained valid.



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