DME Billing: Solving the Improper Payment Rate Puzzle

DME billing
September 28, 2018

Posted by MedbillingExperts / 0 Comment

As per recent CERT data, DME billing space has an improper payment rate of 39.9%, draining $3.2 billion from the Medicare Trust Fund each year. This error rate is three times larger than the national Medicare improper payment rate, which stands currently at 12.1%.

So, what is easiest way to ensure that you don’t suffer from the baggage of this space and ensure that you receive maximum reimbursements every single time? As per experts, the first step to keeping this impediment at bay is by understanding by real reasons that is causing it.

Keeping this in mind we have put together a list of the most common causes of claim denials in DME billing space:

Common Causes of Claim Denials in DME Billing Space

Insufficient Documentation:

Insufficient documentation is the biggest error that is accounting for $2.6 billion of the total $3.2 billion in waste of the Medicare Trust Fund. Here are some of the common occurrences of this rampant error:

  • The service was billed for more units than those allowed within a specific time period for the member
  • Each date of service is not billed separately
  • The document provided doesn’t carry the form required to be completed in its entirety
  • The documents provided lacks a physician signature on an order
  • The documentation cannot prove that the billed services were actually provided or were provided at the level billed

Medical Necessity:

This error occurs when the documentation that you have provided clearly states that the healthcare services which were administered and billed are not medically necessary as per Medicare coverage and other payment policies.

Usage of Modifiers:

Incorrect usage of modifiers has often proved to be one of the biggest contributors to DME claim denials and so is misaligned codes.

Coding Errors:

Some of the common occurrences of DME coding errors include:

  • Beneficiary was discharged at a place other than the one coded on the claim
  • Billed service was unbundled
  • Code indicating that the service was provided by someone other than the billing provider
  • Medical documentation carrying a different code other than the one billed

Verification of Patient Data:

Insurance verification mistakes in the form of error in names or the way the forms has been filled in has contributed to innumerable number of denies by the insurance provider.

Once you understand the root causes of claims denials, the next step is to take measures, which ensures that these errors don’t repeat; and here are tips to do exactly the same:

How to Over these Common Impediments?

Accurate and Prompt Insurance Verification

Your insurance verification team needs to accurately verify whether or not a patient is insured and covered for DME services, and if he is covered, they need to ascertain for what kind of DME services they are eligible for. They need to ensure that no claim is processed without cross checking this information. Also, cross-verification of spellings of names and check whether they have checked the right information can be very helpful in keeping claim denials at bay.

Document Confidently

Here are some of the keys to document confidently:

  • Correct understanding of what proof of delivery rules you should be following
  • Usage of the right modifiers to confirm you have the proper documentation needed for reimbursement
  • Knowledge of the latest policy changes from major insurance carriers on pre–authorization requirements

Avoid Insufficient Documentation Errors

If you miss to adhere to even a single condition of payment such as absence of one physician signature, your claim is at risk of falling into the insufficient documentation error category, which will prolong your AR days or cause a denial.

Here’s how to avoid insufficient documentation error for DME:

  • As a condition of payment, be sure that your inhouse staff — be it be a nurse practitioner, physician assistant or the physician himself — clearly records and documents a face-to-face encounter examination with the patient in the 6 months prior to raising an order for certain DME equipment
  • Ensure that the ordering physician and DME supplier are actively enrolled in Medicare on the date of service to receive DME reimbursements form Medicare
  • Ascertain that the physician’s National Provider Identifier is on the valid detailed written order
  • Thoroughly analyze and understand which HCPCS code related to DME require a valid detailed written order

Ascertaining Medical Necessity

To ascertain medical necessity, you need to submit a lengthy paper trait that heavily supports medical necessity of the DME. This includes provider prescription, clinical documentation along with other information such as:

  • Patient’s medical record
  • Detailed member’s clinical and functional status so that a determination of medical necessity can be made
  • Anticipated benefits and outcomes from using the DME
  • Licensed provider’s plan of treatment

The Bottom-line

Taking a few simple steps to streamline your DME billing process can dramatically improve your collections and increase your revenues. However, coming up with a game plan and putting it into action are two different things. Remember to come together as a staff and discuss how it will be executed– and then be sure to revisit and review your progress periodically to evaluate what’s working and what isn’t. This could be a game-changer!

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