Why Proper Documentation Matters | Engage Health Solutions

Why Proper Documentation Matters

The Centers for Medicare and Medicaid Services (CMS) requires documentation to support coverage and payment of services provided to Medicare beneficiaries. These requirements stem directly from Title XVIII of the Social Security Act (Act), Section 1833(e):

No payment shall be made to any provider of services or other person under this part unless there has been furnished such information as may be necessary in order to determine the amounts due such provider or other person under this part for the period with respect to which the amounts are being paid or for any prior period.

In fact, if you have ever received an appeal letter, and I know that all of you have, the above-referenced section of the Act is found in every letter setting the baseline for the notion that if it was not documented it did not happen and therefore you are not getting paid for your services!

There are general documentation requirements. For example, the Durable Medical Equipment, Prosthetics, Orthotics, & Supplies (DME) Medicare Administrative Contractor, Noridian Healthcare Solutions (Noridian) has issued a General Documentation Requirements document which sets forth the basic information needed to support each DME claim. (Standard Documentation Requirements). This particular document has its roots in a CMS Local Coverage Policy Article (A55426) entitled, “Standard Documentation Requirements for All Claims Submitted to DME MACs” which specifically acknowledges that these documentation requirements are compiled from Statutes, Code of Federal Regulations (CFR), CMS National Coverage Determinations (NCDs), CMS rulings and sub-regulatory guidance (CMS manuals), and DME MAC publications.

But there is more…Noridian also posts to its website Documentation Checklists that are particular and specific for DME items and services. One such example is the “DOCUMENTATION CHECKLIST FOR THERAPEUTIC SHOES,” based upon a Local Coverage Determination (L33369) which cites as a reference Policy Article A55426. This document goes beyond the general documentation requirements and specifically requires that the supplier make sure, prior to the submission of a claim, that the documentation supports an in-person visit within six months prior to delivery of the shoes/inserts which sufficiently addresses five (5) item/condition specific Criterion. Documentation Checklist for Therapeutic Shoes.

So why the importance of showing that documentation requirements can be complex, must be followed and that there can be several sources of those requirements – the Comprehensive Error Rate Testing (CERT) report, and subsequent action by medical review contractors and auditors!

Despite the pandemic, in August 2020, CMS was required to resume CERT program activities that were temporarily suspended in response to the public health emergency (PHE), in order to meet reporting deadlines. Based upon the FY 2020 report (2020 CERT Report) it’s no surprise that CMS and others continue to undertake aggressive audit activity against all types of Medicare providers and suppliers, from the smallest “mom and pop” DME shop to the largest hospital systems. Documentation, or the lack of it, to support coverage and payment is the single largest cause of improper payments and denials.

Despite the FY 2020 report evidencing a continuation in the decline in the overall improper payment rate (from 7.25% in 2019 to 6.27% in 2020), there remains improper payments totaling over $25 billion. While the average improper payment rate for Part A and Part B is only around 5%, this rate represents overpayments of about $22 billion. The overall improper payment rate of roughly 6.3% is misleading when you drill down to the improper payment rate for DME. The DME improper payment is a staggering 31.8% – meaning that 1 out of every 3 claims is improper!

The real problem for providers and suppliers is not, in and of itself, the continued high rates of improper payment, rather it’s the billions of dollars associated with those rates. When one digs a little deeper to get at the heart of improper payments, the vast majority are due to missing and/or insufficient documentation to support a claim. This phenomenon continues to plague providers across the board, with some improper payment rates supported by documentation issues exceeding 70% of the claims reviewed. Documentation issues accounted for more than $15 billion of the $25+ billion in improper payments. (Fiscal Year 2020 Agency Financial Report) It is important to recognize, however, that just because a claim is determined to be improper does not mean that the services were not medically necessary, rather, the majority of the time the documentation was insufficient to support coverage or not provided at all

Overall, for DME, 65% of claims were determined to be improper due to insufficient documentation (defined as when submitted medical records are inadequate to determine if billed services were provided, provided at the level billed, and/or were medically necessary; or when specific documentation required as a condition of payment is missing). Additionally, 12.4% of claims were found to be improper because there was a failure to submit any documents when requested.

Failure by DME suppliers to follow the “DOCUMENTATION CHECKLIST FOR THERAPEUTIC SHOES” addressed earlier has caused this particular category of DME to top the DME list with a 68.2% error rate which is based upon a 72.3% deficiency in documentation. Running a close second are lower limb orthoses (Noridian has a set of documentation checklists for this) with a 65.7% improper payment rate, but more importantly, 35.8% of the time the improper payment was due to the failure to submit any documents! The CERT defines this as an error when the provider or supplier fails to respond to repeated requests for medical records or responds that they do not have the requested documentation. The real problem is that this CERT data serves as a meaningful basis for further audit and review this year.

With the abundance of audit activity in the healthcare arena, it’s no wonder that providers and suppliers are scrambling to take action to submit correct and proper claims, including ensuring they have the documentation to support the medical necessity of the item or service being billed, coding claims properly, and pushing back against auditors that are not themselves properly applying the rules and regulations when adjudicating and auditing claims. One of the best ways to make sure you are maintaining claim integrity is to conduct regular internal audits of your process and operations and adjust, as needed, to ensure the submission of proper claims. And, if you find that a proper claim has been inappropriately denied, appeal to hold the payor accountable.