Monthly Archives: June 2017

Correct Coding – Leg Rest and Foot Plates/Foot Platforms bundled into HCPCS E1012

By: Kay Koch, OTR/L, ATP, Rehab Clinical and Education Consultant

This DME MAC Joint Publication was posted on June 22, 2017. It is a good reminder to those who are billing the E1012 center mount elevating leg rest on power wheelchairs.

Recently it has come to the attention of the DME MACs that suppliers are billing separately for footplates (K0040 ADJUSTABLE ANGLE FOOTPLATE, EACH) or foot platforms (K0108 WHEELCHAIR COMPONENT OR ACCESSORY, NOT OTHERWISE SPECIFIED) used with a center mount elevating leg rest (E1012 WHEELCHAIR ACCESSORY, ADDITION TO POWER SEATING SYSTEM, CENTER MOUNT POWER ELEVATING LEG REST/PLATFORM, COMPLETE SYSTEM, ANY TYPE, EACH) for power wheelchairs when the leg rest is initially billed to Medicare.  This practice is incorrect billing.

HCPCS code E1012 describes a complete leg rest system.  It is an all-inclusive HCPCS code, meaning that all components of the leg rest, including footplates and foot platforms, are included in HCPCS code E1012.  Medicare claims for codes K0040 or K0108 (when used for foot platforms) billed in conjunction with code E1012 will be denied as unbundling.

Refer to the Power Mobility Devices and the Wheelchair Options and Accessories LCDs and related Policy Articles for additional information about coverage, coding, and documentation.

For questions about correct coding, contact the Pricing, Data Analysis, and Coding (PDAC) contractor at (877) 735-1326 during the hours of 8:30 a.m. to 4:00 p.m. CT, Monday through Friday, or e-mail the PDAC by completing the DME PDAC Contact Form at .

RAC AUDIT ALERT: Power Mobility Devices

Performant Recovery, National RAC for DME, Home Health and Hospice has released another issue to the approved issues log. Power Mobility Devices not subject to the PA demonstration are under complex review, effective June 6, 2017. Claims will be reviewed for Medical Necessity and Documentation Review.

Visit Performant Recovery’s website to review this and all other approved issues.

The Cost of Compliance – An impassioned plea to be proactive

By: Wayne H. van Halem

To start, when I say compliance I am speaking directly to being compliant with government laws and regulations when treating patients receiving services from government or private payors. This isn’t licensure or accreditation, but a reimbursement compliance program – where your greatest risk is. I know this is not a topic many folks like to talk about. We hear from clients all the time that, “We hope we never need you, but glad to know you’re there!”  The problem is most of our clients don’t know they need us until it’s too late!

To illustrate this point, we’ve done a cost-benefit analysis on three clients in unique sectors that we work with:  Home Medical Equipment; Home Health and Hospice; and Physical Therapy.  As you will see, the results are astounding. In each of these examples, these clients came to us after compliance issues had been identified by CMS or one of its’ contractors. In each of these examples, despite the absence of intention or malice, our client’s compliance issues resulted in one or more of the following actions being taken as a result:

  • Large extrapolated overpayment
  • Payment suspension
  • 100% prepayment review
  • Corporate Integrity Agreement with the Office of Inspector General

These are all very serious actions that can be debilitating to your business. Imagine if this happened to you?  Luckily, our staff is very good at managing these issues and we have successfully navigated the process for each of these clients, in some cases saving them millions of dollars. However, as you can imagine, dealing with these issues requires an expert’s detailed analysis. It takes hours of time and effort in developing responses and strategies to correct the issues identified and/or to counter the overpayments or denials. This costs money. While our services are not as expensive as what you would pay if you hired a law firm, our hourly rates can add up depending on how serious the issues are. In the chart below, you will see the costs associated with helping our clients. These fees range from just over $15,000 over a 1-year period for a sole physical therapy practitioner who had to enter into a Corporate Integrity Agreement, to over $180,000 over a 1½-year period for a large home health agency with hundreds of employees who experienced a large extrapolated overpayment as the result of the ZPIC audit. It is also important to note that these do not include other financial hits these companies had to take with claim denials, refunds, workload, or hiring legal counsel in addition to our services.

All of this got us thinking, what if these clients had signed up for our monthly proactive compliance packages and were paying that amount, instead of our hourly rates, over the same period of time we were working to fix their issues? Not surprisingly, it turns out the cost of our proactive compliance services are just 10% – 34% of what they actually paid. For example, as illustrated below, our HME client paid us fees totaling over $55,000 over a period of almost two years to manage their issues. During that same time, our monthly compliance package for a company their size would have been just $5,600! This company was pushed to the brink of bankruptcy by CMS and its contractors and is still on a repayment plan today. They have also lost significant revenue and had to lay off half of their workforce.

In three examples from different sectors, we looked at what our clients would have paid for one of our monthly compliance packages over the same period of time as what they actually paid for us to resolve the issues. Below is a chart that illustrates the difference:

Now, of course, there is no guarantee that a comprehensive compliance program is going to catch and resolve every issue; however, leaving a lot of the work up to compliance “experts” who are innately familiar with the requirements and can provide affordable expert advice is a lot better than waiting to see if something bad happens. The van Halem Group offers a range of options for our clients, such as:

  • Customized Monthly Compliance Package, which includes:
    • Online compliance training and education with management reporting and tracking
    • Compliance policies and procedures
    • Quarterly Audits with Corrective Action Plans by clinical and audit consultants
    • Compliance Web-based and Hotline reporting
    • Quarterly compliance newsletters
  • HIPAA Risk Assessment and Monthly Package, which includes:
    • Quarterly HIPAA compliance training with management reporting and tracking
    • HIPAA policies and procedures
    • On-going Security and Risk Assessments with Mitigation Plan by HIPAA consultants
    • Electronic Business Associate management
    • HIPAA Documentation management
    • Breach Reporting
    • Comprehensive and easily accessible HIPAA library

If you’re not sure you want to dive into a long-term agreement, we have one time audits and assessments similar to what is described above as a quick analysis of where you stand or a test of the services we offer. All of our proactive compliance services are reasonable, customizable, and comprehensive. Not to mention, these are all things the government expects that you are already doing. Have you seen the news reports lately of the fines being assessed by the government for HIPAA violations? Some of our monthly compliance packages cost as little as $165 per month per location.  You can’t hire compliance support staff on your own for that.

These services are not designed to replace your compliance officer or your compliance staff, but to augment the work they may be doing. We provide key expertise and assistance while they focus on the many other duties and tasks they are also responsible for.  We make sure that compliance is engrained within your organization and the program is an evolving one that protects your business. We understand that reduced reimbursement has impacted many providers, but even our clients with the most comprehensive internal compliance program are only spending 2-4% of their overall budget on compliance. Considering the risks in today’s environment, that is not an unreasonable spend. A good compliance program will mitigate the cost of itself and you’ll see a return on your investment through better processes, efficiencies, and quality of care. We invest in insurance for our business, why don’t we invest in compliance?

As Roy Snell, CEO of the Health Care Compliance Association – a national association of healthcare compliance experts, says “Organizations that have effective compliance and ethics programs attract and retain good staff and are more trusted by their communities and potential customers. Good compliance and ethics programs have an impact on revenue that must be considered when you calculate cost. Trusted companies get more revenue than companies that can’t be trusted.”

The van Halem Group is here for you when you need us…but you should understand that you may need us now. Since founding The van Halem Group in 2006, we have helped countless providers save over $75 million in overpayment and denials. I am so proud of that, but we could have avoided much of that from ever happening. That is our goal with our proactive services. We have fought and will continue to fight for fairness and reasonableness in the audit and appeal process, but wouldn’t it be nice to avoid it altogether?

It saddens me greatly to see family-owned companies that have been in business for over 20 years be brought to their knees due to avoidable compliance risks. While reactive work may be more lucrative, it also weighs heavily on our clients, and on us. It adds unnecessary stress and tension for everyone involved in the process. We have relieved that stress for a number of clients, but we have a lot more work to do.

Be proactive. Be prepared. Let us help you.

Potential ventilator overpayments identified by the OIG

In September 2016, the OIG released a report titled “Escalating Medicare Billing for Ventilators Raises Concerns“. The report findings were a result of the 2016 OIG Work Plan that identified ventilators as a target for review. The OIG investigation looked to identify (1) billing trends and factors associated in the increase in billing of ventilators (E0464), (2) the frequency of ventilators billed inappropriately for beneficiaries with non life-threatening conditions, (3) instances in which ventilators would not be considered reasonable and necessary to treat conditions described in the CPAP or RAD LCDs, and (4) the impact competitive bidding had on ventilator billing trends.

To conduct the investigation the OIG conducted data analysis of claims billed with code E0464, against other variables. These variables included a diagnosis of Obstructive Sleep Apnea (OSA), a CPAP or RAD billed in concurrent months, and ventilator accessories. Some of the highlights from the published report include the following:

  • Medicare inappropriately paid $25 million ventilator claims
  • 85% increase in ventilator billing from 2009 to 2015
  • Increase is driven by 3 national suppliers (54% growth)
  • Shift from treatment of neuromuscular conditions, as indicated in the NCD, to respiratory conditions
  • Inappropriate billing due to diagnoses of obstructive sleep apnea, billing for multiple devices for the same beneficiary, and billing separately for accessories (unbundling)

At the time this report was published, the ramifications were not quite known. The OIG indicated that they would make recommendations to the CMS for appropriate followup. The result? The CMS has required the DME MACs to identify suppliers of potential overpayments for ventilator claims made to them. In the past two weeks, suppliers nationally have received letters from Noridian and CGS, advising them to investigate and self-report claims identified by the OIG that were potentially overpaid.

If you receive one of these letters here is what you need to do:

  • Review the reason the claims were identified by the OIG. Your letter will identify one of three reasons you may have been overpaid. The identified reasons are:
    1. Multiple devices concurrently
    2. OSA diagnosis, or
    3. Separately billed accessories.
  • Carefully review the claims indicated on the letter. More specifically, check the claims history to determine if a CPAP or RAD was billed prior to or during the billing cycle a ventilator claim was filed if the reason given is “Multiple devices concurrently”. If an OSA diagnosis was the reason given, review your claims history for diagnoses billed. Lastly, check the claims indicated for separately billed accessories if that reason was given.
  • Respond accordingly. Your letter will indicate your option to either attest that you reviewed the claims and no overpayments exist or that you identified an overpayment and you will be taking the appropriate steps to reconcile the overpaid claims with the DME MAC.

Please note that your response to the DME MAC requires your printed name and signature, thus attesting that you have conducted your own investigation of the claims indicated and acted appropriately, in accordance with 42 CFR 401.305, if required.

At this time there is no indication that the DME MACs will conduct further audits on the identified claims. However, as is all things with Medicare, anything is possible. For that reason I strongly encourage you to conduct a thorough investigation of the claims to determine they are medically necessary, and more importantly, that you have the documentation to prove as much. Self-reporting an overpayment does not imply guilt or fraud, and will not leave you open to a barrage of future audits. Should those claims be audited in the future, you will be afforded appeal rights, as you are with any overpayment claim.

If you received one of these letters, take a deep breath and begin your due diligence. For now, the opportunity to self-report versus the DME MAC automatically auditing the claims is a welcome change!

The full report can be viewed by clicking here, “Escalating Medicare Billing for Ventilators Raises Concerns“.

If you would like further assistance, let our Clinical team help! The van Halem Group can conduct reviews of your claims to determine risk or prescreen any future ventilator claims prior to billing. Should your claims be audited later, our Audits and Appeals team will work hard to get your claims overturned. We also offer a variety of compliance solutions to protect your business. Give us a call today!