February 2014

High error rates compel PDAC contractor to continue widespread claims review

Based on the high error rates found in its most recent quarterly review, Noridian Healthcare Solutions, Medicare’s durable medical equipment pricing, data analysis, and coding (PDAC) contractor, announced in January that it will continue its prepayment widespread review of claims for therapeutic shoes for persons with diabetes and for ankle foot orthoses (AFOs) and knee ankle foot orthoses (KAFOs).

Prepayment reviews are conducted for claims that historically result in high rates of improper payments.

The quarterly review (September-December 2013), found that Medicare denied 82% of claims for diabetic shoes (HCPCS code A5500).

Primary reasons for denial were a lack of documentation of foot abnormalities and diabetes management by the certifying physician, no documentation, and inadequate documentation of an in-person visit prior to shoe selection.

For AFOs and KAFOs, claim denial rates for HCPCS codes L-1960, L-1970, and L-4360 were 90%, 90%, and 86%, respectively.

Key documentation errors were a lack of detailed documentation by the treating physician to support the medical necessity of custom orthoses, insufficient documentation to support basic and custom coverage criteria, and lack of a detailed written order or dispensing order.

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