Domos HME Consulting Group

In This Issue
Important New Medicare Rule
Reminder: New Diabetic Shoe Rules
New Feature: WTH!
Random Audits Continue
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Winter 2011 Newsletter


Out last email of the year contains important reminders about 2 new Medicare rules that start in February, potentially impacting many of our clients.

I'm also including a new, regular feature called WTH! (What the H*LL!) that will highlight the most egregious, nonsensical, rule imposed upon DME providers since the previous newsletter. Since we only send out 4 to 6 newsletters a year, I'm expecting stiff competition for the WTH! spot (so many crazy rules, so little time to expound upon them).

Lastly, I have an update on the random audits that continue to come from CMS, and how you should respond to them to avoid recoupment of previously paid claims.

We wish you a happy, prosperous and financially secure new year! And as always, thanks for subscribing!
Important New Medicare Rule

As of February 4th, 2011 Medicare will no longer automatically downcode products to the least costly alternative. Common examples of this would include a non-covered, full electric hospital bed downcoded to the covered semi-electric bed, or a non-covered electric patient lift downcoded to the covered semi-hydraulic patient lift.


Instead of downcoding, Medicare will simply deny the claim. In sum, the "least costly alternative" (LCA) language is being removed from ALL Medicare coverage policies. Here is a list of the recent Medicare medical policy changes, many of which have been changed to remove the LCA language.


Because Medicare providers are required to bill the HCPCS code associated with the actual product delivered this change will leave you with only two practical choices:


1. Don't provide free upgraded (non-covered) products in place of a covered product, OR


2. Provide a free upgrade, with the correct claim lines and modifiers as required by Medicare (yes, more paperwork).

Providing a free upgrade involves entering two lines on the claim; one for the product provided, and one for the covered product that the patient qualifies for. The "upgrade" billing process is the same in all jurisdictions, but Jurisdiction D explains it best, here.

Unfortunately, because you are required to show the submitted amount on both claim lines (and place them in the correct order on the claim), most DME software systems will generate uncollectible AR for the non-covered item. Check with your software vendor for the best process to use with your software, and if it does generate uncollectible AR design a process that will result in the non-recoverable AR being adjusted off as soon as reasonably possible.


Or better yet, change your company policy to discontinue free upgrades to formerly LCA non-covered items.

Reminder: New Diabetic Shoe Rules
Medicare's new rules for suppliers of diabetic shoes start on Feb 4th, 2011 as well. Face to face patient contact by the supplier is required and must be documented.

Documentation associated with the initial evaluation by the DME provider must include:

  • An examination of the patient's feet with a description of the abnormalities that will need to be accommodated by the shoes/inserts/modifications.
  • For all shoes, taking measurements of the patient's feet.
  • For custom molded shoes (A5501) and inserts (A5513), taking impressions, making casts, or obtaining CAD-CAM images of the patient's fee that will be used in creating positive models of the feet.

In addition, an in-person evaluation of the patient by the supplier at the time of delivery must be conducted with the patient wearing the shoes and inserts and must document that the shoes/inserts/modifications fit properly.

Add these documentation requirements to your billing review process -- it's a safe bet that there will be random audits by Medicare to ensure compliance with the new policy. Your diabetic shoe vendor may have some sample forms for you to use -- ask!

The revisions to this medical policy will, no doubt, put the mail order diabetic shoe companies out of business unless and until they change their primary business processes. This may spell opportunity for those of you with a retail store if it's located in one of the 43 states that don't require an orthotist or pedorthist to fit diabetic shoes. Sorry, FL, IL, OH, OK, RI, TN, and TX providers - you'll have to retain a staffer who qualifies as a fitter according to your state law in order to add custom diabetic shoes to your offerings.  

New Feature: WTH!? (What the H*LL!?)

We've had a lot of WTH!? moments in the industry this year, but what really strikes me is how each new one seems to be more unbelievable and egregious than the last. So, I'm adding a new feature to our newsletters to highlight the the most nonsensical new rule or requirement imposed upon DME providers since the previous newsletter.

Be warned: our inaugural example may result in your running outdoors to double check your mailing address just to make sure you haven't been magically transported to the former USSR under communist rule:


"Question (to Medicare): An oxygen beneficiary that has met his cap (36 months) through a non-contract provider which has not elected to grandfather. We understand that during the 27-36 month a contracted supplier will receive a maximum of 10 months of single payment amount. However, for patients who have exhausted the 36 month cap, what reimbursement will a contracted supplier expect until the 5 year RUL period. Are we obligated to provide services for free? 

Answer: The competitive bidding program maintains the Medicare oxygen regulations. If a beneficiary wants to switch suppliers after the 36-month cap for liquid or gaseous oxygen equipment, the contract supplier must accept that patient as part of the contractual obligations. The new contract supplier will not get reimbursed for the furnishing the oxygen equipment, because the equipment has capped. However, the new contract supplier will get reimbursed at the single payment amount for the oxygen contents. The contract supplier is responsible for servicing and maintaining the equipment for the duration of the useful lifetime of equipment (5 years). Please note that the five-year period started from when the beneficiary initially received the equipment."

Wow, being a CBA "winner" means you have to provide free oxygen to patients! It's like winning a huge lotto jackpot... only you pay the lottery instead of them paying you!

Feel free to send in any WTH!? suggestions for future newsletters. I'm anticipating stiff competition for inclusion in the WTH section, but I feel I'm up to the task of picking the very best (worst) one. If not, well, I'm not opposed to a special WTH!? edition of the newsletter.

Random Audits Continue

There seems to be no let up on random audits by Medicare. If anything they seem to be on the increase. So, no, it doesn't mean you're being specifically targeted if you continue to receive random audit requests. 

The focus continues to be on oxygen and diabetic supplies. Jurisdiction D recently reported results of random CERT audits for oxygen claims, asserting an error rate nearing 72%, and stating "Most of the errors are due to insufficient documentation to support the medical necessity for the billed items."


We all know to get a copy of the blood gas or saturation test and a valid CMN at the time of initial set-up, but if audited don't forget to include the physician notes that document an evaluation of the patient no more than 30 days prior to initial set-up, and notes from the face to face evaluation required in the 10th, 11th or 12th month prior to the 13th month recertification CMN in your audit response documents.


With diabetic supplies the hot buttons seem to be documentation that the beneficiary has nearly exhausted their supply testing strips/lancets, and physician notes that document that the patient has been diagnosed and is being treated for diabetes. You can solve this problem by keeping good notes of beneficiary communication about re-supply, and making sure to include them, and physician notes associated with the patient's treatment plan with the audit response.   


Use the MAC's DME documentation checklists to review documentation before sending in the audit response (again, the link is from Jurisdiction D, but requirements are the same throughout all jurisdictions).


Even when your paperwork is perfect you may still get a retroactive denial as a result of these random audits. We've seen all kinds of crazy reasons that have absolutely nothing to do with the patient's actual need or the qualifying criteria. By all means, appeal them to ALJ (level 3 appeal).  We are seeing providers having success in overturning these retroactive denials at the ALJ level.

And one more thing.... my good friend Gail Walker at Homecare Magazine was kind enough to publish a rant (er, I mean, editorial piece) I wrote for Homecare Monday back in November. If you haven't read it yet you might find it cathartic, and as bonus, maybe it will fire you up to educate your referral sources and patients, and above all, raise a fuss with your congress people!


Domos HME Consulting Group
phone: 425-882-2035
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