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Medical Review of Claims for the Fiscal Year 2006 Comprehensive Error Rate Testing Program

August 22, 2008 | Audit A-01-07-00508

Executive Summary

In two reviews of beneficiaries' medical records, KePRO, an independent medical review contractor, identified errors in claims for durable medical equipment, prosthetics, orthotics, and supplies (DME) that the Comprehensive Error Rate Testing (CERT) contractor had not identified. The Centers for Medicare and Medicaid Services (CMS) used the results of the CERT contractor's medical review to produce a DME paid claim error rate for fiscal year (FY) 2006.

KePRO's first review, which used the same procedures and limited medical records that the CERT contractor used, found that the CERT contractor's review was adequate for 324 of the 363 sampled claims, including 23 claims that both the CERT contractor and KePRO determined to be erroneous. However, KePRO identified 39 errors that the CERT contractor had not identified. Based on the 23 errors that both contractors found and the additional 39 errors that KePRO found, we estimated that the error rate in the FY 2006 CERT DME sample was 17.3 percent. KePRO's second review, using additional medical records from physicians and other health care providers and, in some cases, information obtained from beneficiary and provider interviews, confirmed 20 of the 23 errors that the CERT contractor had found and identified 73 errors that the CERT contractor had not found. Specifically, KePRO confirmed 34 of the 39 errors identified in its initial review and determined that another 39 claims were erroneous. Based on the 20 errors that both contractors found and the additional 73 errors that KePRO found, we estimated that the error rate in the FY 2006 CERT DME sample was 28.9 percent.

We recommended that CMS (1) require the CERT contractor to review all available supplier documentation, (2) establish a written policy to address the appropriate use of clinical inference, (3) require the CERT contractor to review all medical records necessary to determine compliance with applicable requirements on medical necessity, (4) document oral guidance that conflicts with written policies, (5) instruct its Medicare contractors to provide additional training to physicians on improving their medical record documentation, and (6) require the CERT contractor to contact the beneficiaries named on high-risk claims to help determine whether the beneficiaries received the items and the items were medically necessary. CMS generally agreed with our findings and recommendations.

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