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CGS Associates, LLC

July 8, 2011

Status Report: HCPCS Code E0601 Service-Specific Prepayment Review

The Medical Review Department of CGS, the Jurisdiction C DME MAC, continues its service-specific prepayment edit for HCPCS code E0601 (Continuous Airway Pressure [CPAP] Device). This edit is the result of data demonstrating a high claims payment error rate for this product category. The review currently includes claims for both the initial month of therapy (E0601RRKH) as well as claims for months 4 � 13 (E0601RRKJ). A summary report for claims reviewed between January 1, 2011 and March 31, 2011 follows:

  E0601RRKH E0601RRKJ
Claims Reviewed 1,681 1,528
Claims Denied 1,035 1,117
Denial Rate 62% 73%
Allowed Dollars Error Rate 60% 74%

An analysis of the claim denials showed that the top reasons a determination was made not to pay the claim included:

  1. The medical records provided did not include a copy of a face-to-face clinical evaluation conducted by the treating physician prior to the sleep test that assessed the patient for Obstructive Sleep Apnea;
  2. The documentation did not verify that the physician who interpreted the sleep test met Medicare's credentialing requirements;
  3. The author's signature on a key piece of medical documentation was either missing or illegible and the file did not include a signature log or attestation statement;
  4. The supplier's records did not document that the patient and/or a caregiver received instruction in the proper care of the CPAP device and accessories; and
  5. Documentation did not include a copy of the qualifying sleep study.

Additionally, the most common denials involving claims for rental months 4 � 13 were:

  1. Records did not provide objective adherence documentation that verified the patient used the CPAP device for four or more hours/night on 70% of the nights during a consecutive thirty day period anytime during the first three months of initial usage;
  2. The medical records provided did not include a copy of a clinical re-evaluation conducted by the treating physician no sooner than the 31st day but no later than the 91st day after initiation of therapy;
  3. The clinical re-evaluation did not document that the beneficiary was benefiting from the CPAP therapy as demonstrated by an improvement in the symptoms of OSA;
  4. The re-evaluation or the adherence report did not document that the adherence data was reviewed by the treating physician;
  5. The clinical re-evaluation was not documented in a detailed narrative note in the patient's chart in the format the physician used for other entries; and
  6. The adherence documentation did not support that the patient used the CPAP device at least 4 hours/night on 70% of the nights during a consecutive thirty day period anytime during the first three months of initial usage.

CGS has numerous online resources to aid suppliers in understanding and complying with the Medicare coverage criteria for Positive Airway Pressure devices. Some of these resources, including FAQs and Documentation Checklists, may be found on the Positive Airway Pressure Resources page.

Additionally, CGS's Provider Outreach and Education (POE) staff offers frequent PAP webinars that detail how a Medicare beneficiary qualifies for a PAP device. The webinar covers the medical necessity and documentation requirements, including beneficiary compliance standards. The instructor also provides examples of how to properly document the need for PAP devices and reviews the policy's FAQs. Plenty of time is allowed following the formal presentation for a Q&A session.

Additional program and registration information can be found on the DME MAC Jurisdiction C Webinars page.