Do You Have the Right Stuff: Tales From the Audit Trail

Tuesday, Oct 20, 2020

They’re Back!

Have you received an audit lately? To the surprise of some, audits of various levels are back. Most of these are post-payment audits, and the reinstatement of pre-payment Target Probe & Educate (TPE) audits is yet to come. TPE audits are intended to increase billing accuracy in very specific areas. The Medical Administrative Contractors (MAC’s) use data analysis to identify providers and suppliers who report unusually high error rates or unusual billing practices and items and services with high national error rates which present a financial risk to Medicare. On top of this, prior authorization on select codes and states are now active. Keep in mind Prior Authorization now does not mean you will avoid an audit and stay paid later. So, do you have the right stuff to support a possible audit?

I was recently asked to assist a client who received an audit with three demand letters for recoupment. After this experience, I thought sharing some of my observations would be helpful in assessing your processes and documentation.

A Recent Experience

This audit occurred on a relatively new practice, which automatically puts them in a high-risk category. The audit focused entirely on lower limb prosthetics. The practitioner/owner is experienced and had gone through audits with a former practice before becoming a practice owner.

The audit was interesting because the review split claims into separate reviews for the same DOS. Additionally, there were three separate demand letters sent on three consecutive days. Some of the claims appeared on the first demand letter, while the balance of the claim appeared on one of the other demand letters. So why is this odd? Well, on one demand letter they only denied a few add-on codes, but the subsequent demand letters denied the base procedure code.

Let’s look at the specific codes in question and the reviewer comments and denial rationale. The questioned codes were L5301, L5321, L5670, L5781, and L5968. The practitioner was confused; why were they in question, when it was clear the patient needed a prosthesis? Why was a small business owner being targeted? Though it can be easy to get bogged down in confusion, frankly, this line of questioning ultimately proves unproductive. We must focus on the specific verbiage used to deny and what is in the medical documentation. Remember, if you did not document it, it did not happen! Below is specifically what the reviewers said in their comments for the various claims:

“The visit notes did not document the beneficiary’s current functional capabilities, nor the expected functional capabilities that would support the designation of the functional level K3. Furthermore, there was conflicting documentation between the ordering physician’s office notes and the lower extremity prosthetic evaluation.

“The visit notes did not document the beneficiary’s desire to ambulate.”

“The visit notes and/or admission notes did not document the status of the beneficiary’s residual limb, his current functional capabilities, nor his expected functional capabilities that would support the designation of the functional level K2. Furthermore, there was conflicting documentation between the hospital operative note and the lower extremity prosthetic evaluation.”

“The visit note was dated after the delivery of the prosthesis. There were no additional notes from the ordering physician or prosthetist that indicated a reason for a new prosthetic device. Furthermore, there was conflicting documentation between the physical therapy and the lower extremity prosthetic evaluation.”

“There were physical therapy notes submitted that indicated that the beneficiary was non-ambulatory, dependent for all transfers and used a motorized wheelchair for mobility.”

“There was no physical assessment of right residual limb noted.”

The progress note was signed by a practitioner, and the credentials were noted as “PA-C”. However, the signatures were not legible, and the name of the signee was not indicated.”

“There was no indication that a physical exam of the residual was performed, nor was there indication in the treatment plan that a prosthetic device was intended for the beneficiary.”

There was no question relative to the presence of an amputation. The reviewers are clearly following some of the directives from the CMS Consensus Report of 2017 on Lower Limb Prosthetics, which I have written about in a previous article (see the Value Orientation Section). In these reports, the CMS was concerned about a lack of linkage between the patient’s stated potential function, which K-Levels address, and their actual functional abilities, which K-Levels do not address. The practitioner had mounds of documentation from hospital records and from the nursing home PT and OTs. However, none of the documentation addressed the specific concern of the patient’s “current” functional capabilities nor their expected functional capabilities with a prosthesis. The practitioner did have their own encounter notes, which lightly addressed some of these concerns.

Further, what was missing from all of the claims was documentation relative to a physical exam of the residual limb. The CMS Consensus Report was also concerned about the provision of prosthetic devices without a proper physical exam by a physician. In this case, all of the patients in question were nursing home residents at the time of receiving the prosthesis (some of whom were eventually discharged). Thus, multiple physicians were involved. There was the surgeon who made some observations relative to the condition of the limb pre-post amputation, but never addressed the functional issues. Then, there was the physician employed by the nursing home who never provided any documentation related to the residual limb and the patient’s current or expected function involving a prosthesis.

Only on a few claims was there documentation indicating the patient’s desire to ambulate, other than the prosthetists. However, none of this mentioned ambulation with a prosthesis. I know this sounds ridiculous, but remember the reviewers are looking for reasons to deny, not approve. In one case there was a note stating the patients desire to ambulate, but this documentation was dated after the delivery of the prosthesis.

There were also numerous instances where notes were not signed and/or dated. In some cases, addendums were provided. Keep in mind, for an addendum to be believable, the date of the entry should occur before you get notice of an audit. They should also be entered through the physicians EMR system. In all of these cases the addendums were brief two or three sentences, either handwritten or typed in a letter format and addressed to, “To Whom It May Concern.” Also, signatures must be legible, or a copy of a signature attestation form needs to be provided and the addendum must be dated.

And the denial reason code for every claim was:

The information provided does not support the medical necessity for the item. Coverage guidelines are not met. The decision was based on an LCD.

What You Should Know

All should be familiar with the DMEPOS Supplier Manual, as well as the LCD and Policy Article for your Region, which provides some guidance on medical necessity. The best way I know to search through all of these is to access the documents and then in the “Find” search box type in “Medical Necessity” or just “Necessity” and you will find numerous references. The issue of medical necessity was another reference from both the CMS and AHRQ reports indicating there is little evidence to substantiate a benefit to the patient. Make sure you are addressing the specific verbiage of the code and your patient’s specific systemic condition when justifying various codes.

Here’s an Example

The code L5781 was denied for lack of medical necessity in this audit. The practitioner pointed out in some cases where the medical record indicated the patient had skin ulcerations. However, the code L5781 has nothing to do with skin ulcerations per se. I have warned about the misuse of this code for quite some time and this is the first time I have seen it audited so be aware. To explain again, L5781 states the following long descriptor:

Addition to lower limb prosthesis, vacuum pump, residual limb volume management and moisture evacuation system.

The industry has colloquially referred to this as “elevated vacuum,” and uses it as a means of suspension. The code descriptor says nothing about suspension. This code, when applied for, stated in the code application (the original Harmony sys.) the technology helped to maintain the limb volume and reduced moisture accumulation. Nothing was stated about enhanced or improved suspension, nor was there anything related to assisting with healing of ulcerations. Thus, to use this code and meet medical necessity requirements, you must demonstrate your patient cannot maintain a stable limb volume beyond what is normal atrophy, AND (not or) has issues with excessive moisture accumulation. The doctor simply stating in a note the patient would benefit from a limb volume management vacuum system, as was the case in this audit, is insufficient evidence; there needs to be evidence of some systemic co-morbid conditions. This code, L5781, was specifically cited in the CMS consensus report and it was stated, “…the current literature does not support the improved functional health outcomes with the use of this component…” Again, the CMS is following through on their findings in the consensus report and we all must be aware of these areas of focus. This is a perfect example of a code for TPE audits.

Additionally, the code L5670 was used on every claim and denied. Why? Because each claim also used a liner and a suspension sleeve or a locking mechanism. Note, the liners and locking mechanisms were not part of the audit. This is an example of multiple suspension systems, which was also an area of concern in the consensus report. Specifically, the Workgroup indicated there is, “no evidence found…on the use of multiple suspension systems” and recommended evidence must be submitted in a prior authorization request.

CMS has been very transparent relative to what concerns them, and it is in everyone’s best interest to be aware of these concerns. So, what do you need to do?

    1. This will tell you exactly what gives the CMS heartburn and what you need to focus on
  2. Understand policy well
    1. Read and understand the pertinent parts of the Supplier Manual
    2. Read and understand the LCD
    3. Read and understand the PA
  3. Document to policy and address medical necessity for each code as best as possible.
  4. Educate the physicians and therapists you work with as to how you can help them, help you, treat a common patient
    1. The need for examination of the limb
    2. Current and future functional abilities
  5. Read the code descriptors carefully and ensure you are providing what the code indicates.
    1. Do not trust manufacturers recommendations alone. They have no culpability in an audit - you do!
  6. If no code matches what you are providing, use a ’99 code
    1. Yes, ’99 codes get paid, but they take work. However, consider the fact every code is essentially being treated as a ’99 code, so what do you have to lose?
  7. If you are using templated note forms, add enough patient-specific information to personalize the documentation.

A final thought: In the event of an audit, having valid and reliable longitudinal patient outcome data will support your appeal. Remember, so-called outcomes, which only focus on K-Levels, only address POTENTIAL function, not the patient’s ACTUAL function, and do not address Health Related Quality of Life (HRQoL) at all. Vanguard Metrics and Analytics has been conducting a patient-centered outcomes program following the recommendations cited in the CMS Consensus Report.

If you would like to learn more about how you can participate, contact Brian Gustin, CP at, 920-544-5045, or