Reimbursement Page

No Denying It: Get Your Medicare Claims Paid the First Time
By Joe McTernan

Are you continually frustrated by claim denials from Medicare? Do you sometimes think your carrier is denying your claims without even looking at them? These are complaints AOPA members voice on a regular basis.

While Medicare is not always a model of claims processing perfection, many claim denials are the result of errors made by the provider submitting the claim. Taking the extra time to make sure that your claim is complete and accurate may prevent unnecessary claim denials and the increased account receivable balances that accompany them.

Automatic pay or deny

Medicare does in fact deny many claims before they are ever seen by an actual person. The sheer volume of DMEPOS claims received by a DMERC/DMAC on a daily basis dictates the need for some form of automation that verifies a claim is complete and eligible for reimbursement before it gets passed down the line for processing.

This first level of processing is called the “common working file” and verifies that the patient was eligible for Medicare benefits on the date of service. Once this is verified, the claim continues through various levels of automated processing, and depending on the systems in use, may complete processing and be paid or denied without ever being reviewed by a person.

There are several things you can do to make sure you are submitting appropriate information to the correct payer when submitting your claims. While it is impossible to cover every potential pitfall, the following are some things to double-check before you submit a Medicare claim.

File to the correct carrier

One of the most avoidable claim mistakes occurs when a claim is filed to the wrong carrier. This occurs primarily in states that are located on the border between DMERC/DMAC regions or in states with large populations of “snowbirds” who have two residences.

The correct jurisdiction for DMEPOS claims is determined by the location of the patient’s primary residence rather than the location where the service was provided.

For example, if your practice is in Florida and you provide an orthosis to a patient who lives in New York but spends the winter months in Florida, the claim should be filed to the Region A DMERC/DMAC, not the Region C DMERC/DMAC. Filing your claim to Region C would result in a denial stating that the service should be submitted to another carrier for consideration.

This error can be avoided by verifying the patient’s permanent address during intake and filing the claim to the correct regional carrier.

DMERC or DMAC—What's the Difference? Durable Medical Equipment Regional Carriers (DMERCs) were established in the early 1990s to process Medicare claims for all Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) in a particular region. In addition to processing claims, each DMERC also handled medical review and medical policy development for its individual region. The Medicare Modernization Act of 2003 required CMS to separate claims processing responsibilities from medical review and policy responsibility. This led to the replacement of DMERCs with Durable Medicare Administrative Contractors (DMACs), responsible for claims processing, and Program Safeguard Contractors (PSCs), responsible for medical review and policy development. The PSCs were established as of March 1, 2006 and the DMACs were scheduled to transition on July 1, 2006. This transition has taken place in DMERC Regions A and B, but has been delayed until October 1st for DMERC Regions C and D due to a protest filed by CIGNA Medicare, the former Region D DMERC contractor. Once this protest is resolved, the DMERCs will be replaced by a DMAC and a PSC for each of the four regions.

Don’t resubmit unnecessarily

It can be very frustrating to submit a claim and then wait several weeks for payment. This frustration often leads to practices submitting another claim for the same service. While this may appear to be a thorough follow-up procedure, it can lead to claim denials.

The second claim will most likely be identified as a duplicate claim, resulting in an automatic denial. This does not do anything to speed the processing of the initial claim and can often lead to confusion and further delay.

In addition, if you routinely file duplicate claims, Medicare may see this as abusive or even fraudulent claims activity.

Rather than submitting duplicate claims, take the time to call the DMERC/DMAC and speak to the customer service staff or go online to the carrier’s Web site and find out about the status of the initial claim.

If the claim is being held up for a reason, you may be able to provide them with additional information that will allow the claim to be processed, along with your payment.

Modifiers are important

HCPCS codes are used to tell Medicare what you did. Modifiers can tell Medicare why, where and how many items you provided. Missing modifiers often lead to claim denials, because the DMERC/DMAC simply does not have enough information to determine whether you should be reimbursed.

Modifiers can be used to confirm any number of facts, such as to show you have appropriate medical necessity information on file (KX), to document a patient’s functional level (K1-K4)—which then determines the type of prosthetic components Medicare will cover—or to identify what side of the body the device is for (LT, RT, LTRT).

As important as it is to know when to include a modifier, it is equally as important to know when not to include one. For example, when providing a single therapeutic shoe, you must include an LT or RT modifier to indicate to which foot the shoe is being fit.

When providing a pair of therapeutic shoes, however, Medicare policy states that the LTRT modifier should not be used. Instead, indicate the number of services as two. Including an LTRT modifier in this situation may actually cause claim delay or denial rather than assist in claim processing.

When patients should pay

In addition to preventing denials, you want to make sure that any denials you do receive will allow you, when appropriate, to bill the patient for the denied device.

Medicare rules protect patients from responsibility if the service you provided is deemed not medically necessary. This means that if you submit a claim for a service and Medicare denies it as not medically necessary, you may not charge the patient for the service.

There is an important exception to this provision. You are allowed to hold the patient responsible if you notify them in writing prior to delivering the service that you have a specific reason why you believe Medicare will deem the service not medically necessary. This allows the patient to make an informed decision on whether or not to receive the service.

If, after reading and signing the appropriate form, the patient elects to receive the service and Medicare denies the claim as not medically necessary, the patient may be held responsible for your charges.

CMS has published a form specifically for this purpose called an Advanced Beneficiary Notice (ABN). You can download the form at www.cms.hhs.gov/BNI/Downloads/ CMSR131G.pdf.

Claims where an ABN is on file must be billed with a GA modifier in order for Medicare to indicate that the patient remains responsible for payment if the claim is denied as not medically necessary. Without a GA modifier, the claim will be denied with no patient responsibility indicated on the Medicare Summary Notice.

AOPA Documentation Seminars AOPA offers regular documentation seminars that outline critical documentation requirements, give attendees hands-on practice writing good supporting documentation for O&P claims, and explain how to prevent legal infringement due to poor documentation. For more information, or to register for AOPA’s final documentation seminar of the year (held on Nov. 17 in San Antonio, Texas), visit www.AOPAnet.org or contact Heather Franklin at hfranklin@AOPAnet.org or (571) 431-0876, ext. 205.

Take it to the bank

The examples listed above are just a few suggestions on how you can prevent inappropriate denials. Eliminating common claim submission mistakes will get you one step further toward eliminating unnecessary administrative work and improving cash flow.

Joe McTernan is the assistant director of reimbursement services for the American Orthotic & Prosthetic Association (AOPA). AOPA is a not-for-profit trade association providing O&P-specific business services and products for professionals.

Through reimbursement, coding and compliance education, AOPA works to inform and support the practice of O&P for the entire profession.

Questions? Call (571) 431-0876 or visit www.AOPAnet.org.