Audits

Taking the Bite Out of Oxygen Documentation

Although the denial rate may be improving, oxygen audits continue to challenge and frustrate providers.

• By Joseph Duffy
• Oct 01, 2012

On a business foundation already rocked by cuts, caps and competitive bidding, the oxygen industry is also dealing with very challenging audits. Recently, VGM and several independent providers responded to the industry’s growing concern and frustration by releasing a white paper outlining problems with, and offering solutions to, the Medicare auditing system.

The whitepaper contends that the current auditing system suffers from four main problems: 1) lack of oversight; 2) lack of regulations and standardization; 3) lack of transparency; and 4) lack of accountability and enforcement. The Senate Finance Committee indicated it would review white paper submissions and prepare a report later this year. But in the meantime, struggles continue, and providers are searching for answers on how to better handle oxygen audits.

Why oxygen claims are challenging

“The oxygen auditing process is very challenging for all providers,” says Peggy Walker, RN, Billing and Reimbursement Advisor, US Rehab/VGM. “Providers have been doing oxygen billing for years and have never been audited to the degree that is happening now.”

Just how challenging has it been? NHIC, Corp.’s recently published results of a widespread prepayment review of claims for oxygen and oxygen equipment (HCPCS E1390, E0431 and E0439) in Jurisdiction A says that out of 818 claims submitted by 357 suppliers, the charge denial rate was 46.7 percent. In another example in Jurisdiction D, Noridian Administrative Services reports that the results of a review of the claims for oxygen concentrators, code E1390, identified 4,783 claims of which 3,501 were denied. This is a denial rate of 74 percent.

Unless providers have been through the process of an audit, Wayne van Halem, President, The van Halem Group, LLC, a Medicare consulting and auditing firm, says most providers are not ready for the audit process, and the widespread review results support that.

“Of course, when you have a 74 percent denial rate, you really should consider that the policy may be the issue and not the supplier — but that’s another topic,” he says. “We see a lot of issues with the testing (three tests must be performed if the patient qualifies on exercise) or the detailed written order. Mostly, however, it goes back to the physician documentation not being deemed sufficient or the reevaluation wasn’t done or documented accordingly.”

“Oxygen is the most difficult of all audits that we receive,” says David Baxter, President, Medical Necessities & Services, LLC, which provides medical equipment and supplies. “It seems to be very subjective to the auditors’ opinion if other modalities of therapy were tried and found ineffective. There aren’t any clearcut guidelines for what they are measuring for disease process and if other treatments were tried and ineffective. Typically if we get denials for audits, they are oxygen related. CPAP audits are very clear-cut and have specific guidelines that are easily obtained. However, oxygen is even more dependent on physician documentation and proving what other treatments the patient has been placed on and depending on disease did the physician follow the correct algorithm for treatment according to the auditor. Therefore, we almost are required to have a physician review charts prior to billing to make sure that the physician that wrote the order for oxygen followed the standard of care for each diagnosis.”

For the NHIC example above, the primary reasons for denial were: 44 percent of denied claims were missing a required treating physician visit and 31 percent were missing both required treating physician visits. About 14 percent of claims were missing documentation. For Noridian, top reasons for denial include no office visit notes to determine medical necessity within 30 days of certification or 90 days within recertification were submitted; no qualifying blood gas study submitted; no documentation submitted providing continued use of the equipment; and no documentation submitted providing continued need of the equipment.

“The audit process is extremely challenging and frustrating for everyone involved,” says van Halem. “Without a doubt, the biggest challenge is getting cooperation from the physician and the patient. The LCD requires specific actions by both of these individuals in the process but neither of them has a good understanding of what is required, so getting it accomplished is very difficult. Physicians are required to document certain things a certain way but they often don’t and the patient is required to see the physician and get reevaluated at a set time. If either of these individuals do not do what they are supposed to, there is no liability for them and claims may very well get denied.”

Walker says the biggest challenge is trying to correct errors after the fact. She points out that referral sources are just as busy and frantic as the suppliers are and do not have the time to search through their records for one specific word or sentence in order to get an item paid that has been billed several months or years ago.

For Baxter, the biggest auditing challenge he encounters is making sure that every document has a physician signature. When his company is audited, Baxter has to call to see if the physician has signed the medical records at the hospital and if not he has to hunt down the physician. This can be time consuming and Medicare will not pay without either a manual or electronic signature. Often, physicians are behind on signing off on these documents.

“We receive several prepay audits from CGS,” says Baxter. “It just slows down your collection process, which is the most aggravating part. In addition, they are not as timely as you would hope they would be, especially since they are auditing a number of claims. Also, if you have to take a claim to an ALJ to get an independent decision, then that entire process can take a year and half.”

Becoming oxygen audit ready

Picking out the problems is much easier than listing solutions, but Walker points out that there has been an improvement overall in the denial rate, because she sees providers are educating their staff to make sure they have all documentation up front and are not billing until their claim is correct.

“The sales staff needs to attempt to work closely with referral sources and explain the policies to them,” says Walker. “Working with office managers and nurse reviewers is the best way to get results. A brief bulletpointed presentation with good chart note examples always helps. Offering to meet with the office manager and go over the charts that are being audited by figuring out the group practices in which you have the greatest amount of difficulty with and going one on one always helps.”

If you have multiple claims that are being audited, says Walker, identify the patients for the specific doctors and send the office manager a list and set a time you can go in and go through the charts for them. This will make them appreciate that you are willing to do that work for them.

Audit expert van Halem suggests that providers follow the LCD and educate physicians and patients on what must be accomplished and documented. After that, follow up on it. He also says to request documentation up front and review it to make sure it is sufficient.

“Suppliers’ only defense in an audit is their documentation so they really need to be proactive and make sure it is accurate and sufficient,” he says. “I recommend using checklists provided by the DMAC internally to assure they have everything they need every time.” Examples of those checklists can be found here:

• www.cgsmedicare.com/jc/coverage/mr/PDF/MR_checklist_oxygen_grp1.pdf
• www.cgsmedicare.com/jc/coverage/mr/PDF/MR_checklist_oxygen_grp2.pdf

Another idea is appointing an in-house champion to be the main oxygen audit person.

“It should be someone who has extreme familiarity with the LCD and what is necessary to get claims approved,” says van Halem. “They should attend as much training as possible offered by the DMACs on oxygen and then relay that information to appropriate staff. Most important is training intake staff on what is required before putting equipment in the home so that they decrease the chances of getting denials. Conducting on-going quality checks and internal audits of the files will also be important to identify any issues or problems proactively before an audit occurs. It should certainly be a knowledgeable and experienced person. They should also understand that while you may not agree with the policies, if you want to bill and be paid and keep the money, they must be followed precisely.”

Baxter has an employee whose primary job is working with audits. He also has a Medicare biller who reviews all charts and documentation prior to releasing them to Medicare.

When working with referral partners, van Halem says education is key.

“Letting referral sources know that in order for suppliers to be in compliance with federal regulations, they must have documentation that meets the requirements,” he says. “Hold them accountable. Many suppliers will back down if a physician pushes back on providing documentation but they end up accepting the liability. That is not right. Physicians may not know what the coverage policy requires so you have to make them aware and let them know it is Medicare’s requirement, not the supplier trying to be difficult. The more suppliers hold them accountable, the better the likelihood that things will change.”

Baxter says to show referral partners the guidelines and ask them for help. However, he says to be aware that some physicians and staff only want to deal with providers who cause them the least amount of work and don’t follow the rules, therefore, making it difficult for good providers.

This article originally appeared in the Respiratory & Sleep Management October 2012 issue of HME Business.