Monthly Archives: June 2015

The KX Modifier Trap


I am going to use a metaphor to try and get my point across. In this metaphor, the DME supplier is a harmless little mouse simply trying to get a piece of cheese. That cheese is a reimbursed claim. Now, CMS is a home owner trying to rid her house of these mice. So, she sets a trap for the mice with a piece of cheese, just what the mouse wants. The most important part of this metaphor is what that trap represents – the KX modifier.

The KX modifier is going to become a prominent tool in CMS’ arsenal to combat fraud, waste, and abuse. It’s an attestation you put on a claim for payment to the federal government. It is very serious. In most cases where the modifier applies, the policy states that, “Suppliers must add a KX modifier to [Procedure Code] only if all of the criteria in the ‘Indications and Limitations of Coverage and/or Medical Necessity’ section of this policy have been met.” In some cases, it also adds that evidence of such is kept in the supplier’s files.

The reality of the situation is that physicians do not know what those indications and limitations of coverage are unless we have educated them. Even if they do, that certainly doesn’t mean they have documented that clearly. Therefore, in a majority of cases, the documentation is not there to specifically address that the patient qualifies. One might be able to infer this information but that’s not what the attestation above states.

Why is this a trap? Well…because the claim will not get paid unless a supplier uses this modifier. You will not receive reimbursement without it. Right now, in an audit situation, if you do not have the documentation to support the KX modifier, it will result in a claim denial or overpayment that you can fight through the administrative appeals process. I am of the opinion that CMS is leading us down a path that no one wants to go down. If a federal auditor requests documentation from you on a claim with a KX modifier and you either do not have it or it doesn’t show the indications and limitation of coverage from the Local Coverage Determination have been met, they can reasonable accuse you of violating the Federal False Claims Act.

The False Claims Act makes it a federal crime for anyone knowingly presenting, or causing to be presented a false claim for payment or approval. The penalties for violating this Act can be severe. In these instances, they could easily result in Civil Monetary Penalties. The penalty for violating the False Claims Act is $11,000 per violation and/or three times the amount of the falsely claimed charges. Now, each line item on a submitted claim can be considered a violation. What if federal auditors requested a sample of 100 claims with KX modifiers? The penalties could quickly and easily exceed $1 million.

For more information at Heartland, come see the presentation “KX Modifier: Don’t Take the Bait” by Wayne van Halem and Kelly Grahovac on Wednesday, June 17 at 4 p.m.