What’s New at Your DME MAC

1. What’s New at Your DME MAC Adrian M. Oleck, M.D. Medical Director, DME MAC, Jurisdiction B September 30, 2010

2. Presentation Outline • DME MAC Overview • Role of Medical Director • Medical Policy Development • HCPCS Coding • CERT • Documentation Requirements • Audits – Therapeutic Shoes, Knee Orthoses

3. Geographic Jurisdiction

4. Benefit Categories • $11.6 billion allowed charges • National; annualized • Durable medical equipment – $8 Billion • Oxygen – $2.1 B • Glucose monitor supplies – $1.5 B • Wheelchairs - $1.2 B • Nebulizers and inhalation drugs – $800 Million • All other – $ 2.4 B

5. Benefit Categories • Prosthetic devices - $1.2 B • Parenteral and enteral nutrition - $640 M • Eyeglasses/contacts post cataract surgery - $67 M • Urological supplies - $176 M • Ostomy supplies - $194 M • Breast prostheses – $46 M

6. Benefit Categories • Limb prostheses – $628 M • Immunosuppressive drugs – $576 M • Braces – $440 M • Therapeutic shoes – $276 M • Oral anticancer drugs – $224 M • Surgical dressings – $184 M

7. Role of DMAC Medical Director • Development of medical policy • Implementation of medical policy • Education related to medical policy

8. Role of DMAC Medical Director • Implementation of medical policy • Automated system edits • K modifiers for lower limb prostheses • Bundling • KX modifier • Other – quantity, frequency, etc. • Medical review

9. Role of DMAC Medical Director • Education related to medical policies • Internal • Medical Review, Provider Outreach and Education, Appeals • External – Suppliers • Bulletin articles • External – Other contractors • PSC (Program Safeguard Contractors)/ ZPIC (Zone Program Integrity Contractors) – fraud and abuse • RAC (Recovery Audit Contractors) – post payment review

10. Role of DMAC Medical Director • DMD collaboration • Conference calls; emails • Consistent interpretation of policies • Consistent implementation

11. Medical Policy Development • Currently 54 policies • Ankle-Foot and Knee-Ankle-Foot Orthoses • Knee Orthoses • Lower Limb Prostheses • Orthopedic Footwear • Spinal Orthoses • Therapeutic Shoes for Diabetics

12. Medical Policy Development • Medical policy = LCD + PA • Local Coverage Determination (LCD) • Medical necessity coverage criteria • HCPCS codes and modifiers • ICD-9 diagnosis codes • Documentation requirements • Policy Article (PA) • Statutory coverage criteria • Coding guidelines – code definitions

13. Medical Policy Development • Reasons for a formal policy • High dollar volume • Disproportionate increase in utilization • Inappropriate utilization • New technology

14. Medical Policy Development • New policy development process • Data analysis • Literature review • Informal consultation with suppliers, clinicians, manufacturers • Draft policy for public comment – 45 days • Review of comments and policy revision • Final policy – 45 days notice prior to implementation

15. Medical Policy Development • Policy revision – minor • No public comment • HCPCS code changes • ICD-9 diagnosis code changes • Clarifications of coverage criteria • Revised documentation requirements • New/revised coding guidelines

16. Medical Policy Development • Policy reconsideration process • Submit request to the DMDs • Include rationale, supporting documentation, literature • Policy revisions – major • Restrictions in medical necessity coverage criteria • Similar process to new policy development, including public comment

17. Medical Policy Activity – O&P • Lower limb prostheses • Functional levels • High $ components • Data analysis

18. HCPCS Codes • PDAC – Pricing, Data Analysis, and Coding Contractor • Coding Verification Review • Mandated – specified in certain policies – e.g., TSD • Optional • Involvement of DMDs • DMECS (Durable Medical Equipment Coding System) – PDAC web site

19. HCPCS Codes • PDAC (cont.) • Informal coding guidance • Help desk • Development of new codes • DME MAC representative on CMS A-N Workgroup • Participate on DMD calls

20. HCPCS Codes • CMS HCPCS Alpha-Numeric Workgroup • Composition • CMS staff (Medicare and Medicaid), VA, commercial insurers, PDAC • Yearly cycle • Application for new/revised codes • Review and preliminary decision • Involvement of DMDs • Open meeting • Final decision • Quarterly updates

21. HCPCS Codes • DMD initiated coding changes • Work through PDAC and A-N WG • Coding issues • Correct coding • Upcoding • Unbundling

22. CERT • Comprehensive Error Rating Testing Program • DME MAC error rates • May 08: 9% • Nov 09: 52% • Nov 10 (est): > 70%

23. CERT • What changed?? • OIG report – Aug. 08 • CMS guidance to contractors • Assess every required element • Strict interpretation • No exceptions

24. Documentation • Orders • Dispensing order • Detailed written order • Prior to claim submission

25. Documentation • Medical records • Ordering physician • Chart notes – Office, hospital, nursing home • Justification for category of item – e.g., BK prosthesis, AFO, TLSO, etc. • Justification for specific code category – e.g., joint laxity in Knee Orthoses policy

26. Documentation • Supplier records • Justification for specific type of device and additions • Documentation of functional level for LLP • Proof of delivery

27. Medical Review • Prioritization of policies • CERT errors • Allowed $ - current • Allowed $ - trends – short term and long term • Widespread (all suppliers) or supplier-specific • Pre-payment review

28. Therapeutic Shoes • Policy revision and bulletin articles • Documentation requirements • Orders • Medical records • Certifying physician – MD/DO who manages diabetes • Diabetes management • Qualifying condition • Documented in MD/DOs own records; or • Review, sign, date, indicate agreement with podiatrist’s note

29. Therapeutic Shoes • Documentation Requirements (cont.) • Statement of certifying physician • Not a substitute for medical records • Fitting/selection visit • Delivery visit • Proof of delivery • Sequence/ timing requirements

30. Therapeutic Shoes • Recommendation – obtain medical records prior to claim submission

31. Knee Orthoses • For contractures • For ambulation • Document knee instability; objective description of joint laxity • In physician records • Symptoms and/or diagnoses by themselves are not sufficient

32. Knee Orthoses • Custom fabricated • Documentation of physical characteristics which preclude use of prefabricated brace • Deformity of leg or knee • Size of the thigh and calf • Minimal muscle mass on which to suspend the brace • Documentation may be in physician or supplier records

33. Knee Orthoses • Elastic orthoses – noncovered • Reasonable useful lifetime • Addition codes • Eligible for separate payment • Not medically necessary • Bundled; not separately payable • Incompatible

34. QUESTIONS