Results of Widespread Prepayment Review for
HCPCS Code L1940 (Ankle-Foot Orthosis)
Historical Review Results
This is the first DME MAC JA medical review for Ankle-Foot Orthosis, (HCPCS L1940). This medical review was initiated due to errors identified by a DME MAC JA Medical Review Probe. 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 Ankle-Foot Orthosis probe had a charge denial rate of 78.5%, which was noted in the article published November 25, 2015.
Current Review Results
DME MAC JA has completed the prepayment review of claims for Ankle-Foot Orthosis, (HCPCS L1940). These findings include claims with dates processed from January 1, 2016 through March 31, 2016.
The review involved prepayment complex medical review of 256 claims submitted by 184 suppliers. Responses to the Additional Documentation Request (ADR) were not received for 36 (14%) of the claims. For the remaining 220 claims, 62 of the claims were allowed (28%) and 158 of the claims were denied/partially denied. This resulted in a claim denial rate of 72%. The total denied allowance amount (dollar amount of allowable charges for services determined to be billed in error divided by the total allowance amount of services medically reviewed) resulted in an overall Charge Denial Rate (CDR) of 74.2%.
Charge Denial Rate Historical Data
The following data depicts the Charge Denial Rate from previous quarters to current:
| Review Period | Charge Denial Rate |
| Probe | 78.5% |
| January 2016 - March 2016 | 74.2% |
Primary Reasons for Denial
Based on review of the documentation received, the following are the primary 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 (74%)
- 22% of denied claims did not support that the orthosis was custom fabricated.
- 18% of the denied claims did not provide documentation to support the medical necessity of a custom fabricated orthosis, rather than a prefabricated orthosis.
- 9% of the denied claims were missing medical records from the treating physician to corroborate the information in submitted orthotist records.
- 9% of the denied claims did not meet the basic coverage criteria for beneficiaries with weakness or deformity of the foot and ankle, who:
- Require stabilization for medical reasons, and,
- Have the potential to benefit functionally.
- 7% of the denied claims included medical records that were not authenticated by the author.
- 3% of the denied claims did not include clinical documentation.
Detailed Written Order (46%)
- 16% of the denied claims included a supplier created detailed written order that was missing an order start date.
- 12% of the denied claims did not include a sufficiently detailed description of item(s).
- 9% of the denied claims were missing a detailed written order.
- 2% of the denied claims included a detailed written order that was missing the physician's printed name.
- 3% of the denied claims included a detailed written order that was illegible.
Proof of Delivery (48%)
- 16% of the denied claims were missing a proof of delivery.
- 12% of the denied claims were missing the delivery address.
- 8% of the denied claims included a proof of delivery that did not include a narrative description or a brand name/model number of the item being dispensed.
- 7% of the denied claims did not include the quantity delivered.
- 4% of the denied claims showed the item(s) were delivered either before or after the date of service (method I).
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 L1940 Ankle-Foot Orthoses claims:
Example 1
Received:
- A detailed written order which included the beneficiary's name, date of the order, physician's name, detailed description of the item(s), and physician signature and signature date;
- Clinical documentation consisting of only orthotist notes that demonstrated a positive model was used to create the custom fabricated orthosis.
- Proof of delivery which included the beneficiary's name, delivery address, quantity delivered, date delivered and beneficiary (or designee) signature that validates that the beneficiary received the items that were billed.
Missing:
- Medical records from the treating physician to corroborate the information in submitted orthotist records.
Example 2
Received:
- Proof of delivery which included the beneficiary's name, quantity delivered, date delivered and beneficiary (or designee) signature that validates that the beneficiary received the items that were billed.
Missing:
- A detailed written order which included: the beneficiary's name, date of the order, physician's name, detailed description of the item(s), and physician signature and signature date;
- Clinical documentation consisting of: orthotist notes and physician's medical records to provide information the beneficiary meets all coverage criteria;
- Proof of delivery that included a delivery address.
Example 3
Received:
- A detailed written order which included the beneficiary's name, date of the order, physician's name, description of only base item ordered, and physician signature and signature date;
- Clinical documentation consisting of orthotist notes and physician's medical records, which included information that the beneficiary met the basic coverage criteria and a positive model was used to create the custom fabricated orthosis.
Missing:
- A detailed written order which included the additions to the base code being ordered;
- Proof of delivery.
Next Step
Based on the results of this prepayment review, DME MAC JA will continue to review claims for Ankle-Foot Orthosis, HCPCS L1940. 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.
Educational References
NHIC provides extensive educational offerings related to the proper documentation requirements for L1940 Ankle-Foot Orthoses 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:
