Results of Widespread Prepayment Review for
Nebulizers (HCPCS Code E0570)
Historical Review Results
This review was initiated due to errors identified by the Comprehensive Error Rate Testing (CERT) Contractor. The overall Charge Denial Rate (CDR) is the total denied allowance amount (dollar amount of services determined to be billed in error) divided by the total allowance amount (dollar amount of services medically reviewed). The previous quarterly findings covered the period of August 2015 through October 2015, and reported a CDR of 67.7%.
Current Review Results
The DME MAC Jurisdiction A has recently completed a widespread prepayment review of claims for E0570 (Nebulizer, with Compressor). These findings include claims processed primarily from November 2015 through January 2016.
The review involved prepayment complex medical review of 1,645 claims submitted by 532 suppliers. Responses to the Additional Documentation Request (ADR) were not received for 359 (22%) of the claims. For the remaining 1,286 claims, 318 claims were allowed (25%) and 968 were denied/partially denied resulting in a claim denial rate of 75%. The overall CDR was 73.4%.
Charge Denial Rate Historical Data
The following data depicts the Charge Denial Rate from previous quarters to current:
| Review Period | Charge Denial Rate |
| February - April 2015 | 76.2% |
| May 2015 - July 2015 | 69.2% |
| August 2015 - October 2015 | 67.7% |
| November 2015 - January 2016 | 73.4% |
Reasons for Denial
Based on review of the documentation received, the following are the reasons for denial. Note that the percentages detailed below reflect the fact that a claim could have more than one missing/incomplete item. Also note that claims can be denied for multiple reasons therefore the percentages of reviews may not add up to 100%:
Clinical Documentation Issues (51% of the total claims reviewed)
- 19% of claims were denied because no medical records were submitted
- 32% of the denied claims had insufficient or incomplete clinical documentation. The following are common issues identified with clinical documentation:
- Clinical documentation did not support reasonable and necessary use of a nebulizer, per LCD guidelines (25%)
- Illegible copy of documentation submitted (2%)
- Physician signature did not meet signature requirements including:
- Missing physician's handwritten or electronic signature or unsigned typed note with physician's typed name only (5%)
Written Order Prior to Delivery (WOPD) (36% of the total claims reviewed)
- 1% of the denied claims did not include a WOPD.
- 35% of the denied claims had an incomplete or invalid WOPD. The following are common issues identified:
- Missing the prescribing practitioner's National Provider Identifier (NPI) (3%)
- Ordering practitioner's signature date was after the item(s) were delivered (5%)
- Insufficient evidence (i.e. date stamp, fax date, etc.) within the documentation to show that the supplier received the written order prior to delivering the item(s) (25%)
- The WOPD contained corrections and or changes that did not comply with accepted record keeping principles (2%)
Proof of Delivery Issues (12% of the total claims reviewed)
- 2% of the denied claims were missing proof of delivery.
- 10% of the denied claims had an incomplete or invalid proof of delivery. The following are common issues identified:
- Illegible copy of proof of delivery (1%)
- Missing the delivery address (2%)
- Missing beneficiary (or designee) signature when item(s) are delivered directly by the supplier to the beneficiary (Method I)(1%)
- Nebulizer (first month rental) delivered to the beneficiary either before or after the date of service of the claim when delivered directly by the supplier (Method I) (5%)
- Nebulizer (first month rental) shipped either before or after the date of service of the claim when the item(s) is shipped via a shipping service or delivery service (Method II) directly to a beneficiary (1%)
Claim Examples
As an additional educational measure, the following are actual examples of claim denials. NHIC expects these examples will assist suppliers in understanding the medical review process and the common documentation errors that occur with nebulizer claims:
Example 1:
Received: WOPD with: beneficiary name, order date, description of item(s) to be dispensed, physician's signature, date of signature, physician's NPI number, clinical notes and proof of delivery
Reason for Denial: The physician's signature date on the WOPD is after the item(s) were delivered. Insufficient evidence (i.e. date stamp or similar) within the documentation submitted to show that the supplier received the WOPD prior to delivering the item(s). The proof of delivery submitted shows that the item(s) were delivered before the date of service on the submitted claim.
Example 2:
Received: WOPD with: beneficiary name, order date, description of item to be dispensed, physician's signature, date of signature, physician's NPI number, evidence of supplier receipt of the detailed written order prior to delivery and clinical notes.
Reason for Denial: Clinical notes submitted did not demonstrate the reasonable and necessary use of a small volume nebulizer, with compressor, for the administration of albuterol for the management of a diagnosis supported by the Local Coverage Determination (LCD). Missing proof of delivery.
Example 3:
Received: WOPD with: beneficiary name, order date, description of item to be dispensed, physician's signature, date of signature, physician's NPI number, clinical notes and proof of delivery
Reason for Denial: Invalid alteration to the physician's NPI number on the WOPD. Insufficient evidence (i.e. Date stamp or similar) within the documentation submitted to show that the supplier received the WOPD prior to delivering the item(s). Proof of delivery missing the delivery address.
Next Step
Based on the results of this prepayment review, DME MAC A will continue to review claims for E0570 (Nebulizer, with Compressor).
Suppliers are reminded that repeated failure to respond to ADR requests could result in a referral to the Jurisdiction A Program Safeguard Contractor/Zone Program Integrity Contractor.
DME MAC Jurisdiction A performs ongoing assessment of the effectiveness of its prepayment widespread reviews. One assessment is the Compliance Improvement Program (CIP), which measures suppliers' performance with providing complete and accurate supporting documentation and their response rate to Additional Documentation Requests (ADRs). When a supplier achieves and maintains high quality accuracy and ADR response rate over three (3) quarterly periods, the supplier will be temporarily removed from that particular widespread review. The supplier's authorized official will be notified and provided details of this decision.
Questions and comments can be sent to the DME MAC Jurisdiction A Provider Compliance mailbox at: dme_mac_jurisdiction_a_provider_compliance@hpe.com
NHIC offers a self-service tool, Decision Desktop, which allows suppliers direct access to specific details about a claim decision for claims which have been selected for Complex Medical Review. This tool enables direct access to comprehensive information relating to the reason for denial along with saving time since it is no longer necessary to contact Customer Service for this information.
Decision Desktop can be accessed through the following link: http://www.medicarenhic.com/dme/mr.aspx
Educational References
NHIC provides extensive educational offerings related to the proper documentation requirements for nebulizer claims. Please ensure that the responsible supplier staff is aware of and references this educational material so that supporting documentation for your claims is compliant with all requirements:
