Need Favorable Audits? Follow the Yellow Brick Road

Date Published: October 28 2013

There are things you should do right now to merge onto the yellow brick road to FAVORABLE audits.

As seen in HME News, October 25, 2013.

True or false: A pad prescription (order to dispense), blood gas study, ABG or o2 saturation and a completed CMS 484 form, is in compliance with the Center for Medicare and Medicaid Services (CMS’s) Oxygen Coverage Criteria Policy?

True or false:CMS delayed the face-to-face rule until sometime in 2014 so we do not have to worry about it this year?

True or false: You really want to argue with a Qualified Independent Contractor (QIC) in three years about the effective date of the face-to-face rule?  


If you answered true to one or more of the above questions, you are following the shortcut to the emerald city of CMS recoupment, not the yellow brick road to FAVORABLE audits.

The new face-to-face rule of Section 6407 of the Affordable Care Act (affecting more than one hundred items of durable medical equipment) still went into effect July 1, 2013.  The only  exception is delayed implementation of the enforcement of the face to face rule until “sometime in 2014.” An auditor several years from now could reasonably expect full compliance with the face-to-face requirements in your files from July 1, 2013 forward.

The harsh truth for respiratory providers is that they are now experiencing what power mobility providers have seen for the past eight years; physicians are more hesitant to complete a detailed face-to-face evaluation to justify the need for oxygen therapy. Why? Because it requires more of their time; physicians can no longer simply write a script for oxygen.

Oxygen face-to-face documentation must contain 38 key components to justify medical necessity and an auditor will be on the lookout for any that are missing. The supporting documentation cannot be addressed in a question and answer format. The physician must make entries in a detailed narrative as to the medical need. The DME Medicare Administrative Contractor (MAC) Website now has a checklist for physicians to refer to when documenting the patient visit.

On the road to a FAVORABLE oxygen audit, the face-to-face evaluation must document a respiratory-related condition that benefits from oxygen therapy; documentation that the patient was seen prior to the initiation of the home oxygen must also be included as well as a list of alternative treatments tried and proven ineffective. DME provider records must contain a copy of the qualifying blood gas study, ABG or o2 saturation as well as all testing methods that were met, according to the policy (LCD) L11457.  For Initial Oxygen claims, the date of the initial test results in section B 1. a, 1.b, 1.c on the CMS 484 form must be before the Initial Start Date of service in Section A. In Section C, the equipment they are providing must be detailed, including HCPCS, manufacturer make and model, billed and allowed amounts. Finally, the delivery invoice must match the HCPCS for the dates of service submitted for reimbursement.  

On the road to a FAVORABLE PAP audit, five things must be documented: 1) The patient was seen prior to the ordering of the polysomnogram (sleep study); 2) The sleep study meets the coverage criteria detailed in the national LCD L11528; 3) The face-to-face documents the assessment of Obstructive Sleep Apnea (OSA), current symptoms of OSA and why the patient would benefit from PAP therapy; 4) For continuation of PAP device coverage beyond the first three months (31st to 90th day), the treating physician must conduct a new face-to-face to document the patients tolerance, compliance and benefits from the use of the device as well as which symptoms of OSA have improved with the use of PAP therapy; 5) Evidence of training proper patient use of PAP device along with the delivery ticket must be included. 

Based on prepayment audits for the first and second quarters of 2013, results in all four jurisdictions for oxygen remain on average 60 percent unfavorable. PAP therapy results for initial claims are on average 64 percent unfavorable and documentation missing in the 31-90 timeframe is at a steady average of 75 percent unfavorable. The Office of Inspector General (OIG) reported Top 20 Service Types with the Highest Improper Payments for 2011. Oxygen supplies and equipment was number one at more than $1.2 billion. PAP supplies and equipment came in at number five in excess of $414 million. As Denise Fletcher Lard Esq. stated in the October issue of HME news, “CMS leaves plenty of clues providers can use to anticipate future audits.”  Could we have laid a smoother road for CMS to follow?

There are things you should do right now to merge onto the yellow brick road to FAVORABLE audits.  Indeed, CMS has coined this time period as “additional time to establish operational protocols necessary for compliance.” Take this additional time to do things such as educate stakeholders; refine, streamline and integrate your internal processes and checklists; and research and investigate web-based documentation solutions that remove the guesswork out of DME documentation and help you get on the FAVORABLE side of audits. A web-based electronic template documentation solution can assist you and your referring physicians in obtaining accurate and complete oxygen and PAP therapy documentation, in lieu of having to visit CMS Websites daily to keep up to speed on the constantly changing regulations.

The choice is yours: slip on your ruby slippers and start down the yellow brick road to FAVORABLE audits today, or wish you had done so a year from now.

By Jamie Loper, co-founder

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