Anyone who has ever been audited has learned the hard way that it is easier to obtain the correct documentation up front rather than chasing documentation in the short time given to respond to an audit.

One of the most significant changes in the past year has been to regulations governing Assignment of Benefits (AOB). On November 15, 2004, CMS published final rules that revised the guidelines for AOBs, effective on January 1, 2005. The rule provides: In situations when payment under the Act can be made only on an assignment-related basis, or when payment is for services furnished by a participating physician or supplier, the beneficiary (or the person authorized to request payment on the beneficiary’s behalf) is not required to assign the claim to the supplier for an assignment to be effective. This guidance clearly establishes that a DME supplier who is participating—or who is providing an item subject to mandatory assignment such as respiratory medications—does not need to obtain an AOB. This change in requirement for AOBs is the biggest change to affect supplier documentation requirements.

Suppliers have also seen increased documentation scrutiny in dealing with the National Supplier Clearinghouse (NSC). The NSC is being used to fight fraud since the easiest way to get a bad supplier out of the program is to revoke its supplier number. Therefore, the NSC has been more critical when reviewing applications and reenrollments. For this reason, being prepared for a NSC site visit is more important than ever. All suppliers should maintain a NSC notebook that contains all information to verify compliance with the supplier standards. By having a NSC notebook available, a site visit can be less stressful. A bad site visit can result in the deactivation of a supplier number.

Therapeutic Shoes
The NSC is also asking for additional documentation from suppliers furnishing therapeutic shoes. In accordance with the local medical review policy, the footwear must be fitted and furnished by a podiatrist or other qualified individual, such as a pedorthist, orthotist, or prosthetist. In the past year, the NSC has taken a new look at suppliers using an “other qualified individual” to fit therapeutic shoes. At one point, the NSC was requiring documentation that the “other qualified individual” had received American Board for Certification in Orthotics and Prosthetics (ABC) or Board for Orthotist/Prosthetist Certification (BOC) certification. Without such certification, the NSC was deactivating supplier numbers. However, the imposition of this criterion exceeded the authority of the NSC. Any change in the definition of “other qualified provider” must be made by CMS. Therefore, the NSC at this time is only requiring proof that the person has received specialized training, which can be provided through a manufacturer. However, the training must be verifiable by the NSC.

While a manufacturer’s certificate of training is currently being accepted by the NSC, it is our understanding that a policy is being circulated within CMS that will limit the definition of “other qualified individual” to include only those with ABC or BOC certification. Once this policy is enacted, a supplier must have a qualified podiatrist, orthotist, or prosthetist, or someone certified by ABC or BOC on staff to continue to provide therapeutic shoes. We suggest that suppliers who provide therapeutic shoes begin taking steps immediately to comply with the anticipated standard.

Making Progress
Another documentation area deals with the provision of progress notes for items provided pursuant to a certificate of medical necessity (CMN). This has been prompted by the case of Maximum Comfort Inc vs Thompson. The court in Maximum Comfort ruled that a DME supplier did not need to provide progress notes to prove medical necessity for power wheelchairs when the supplier had a valid CMN. Unfortunately, this decision is binding only in the Eastern District of California. If similar cases are brought in other parts of the country, then these courts can look to Maximum Comfort for precedent. However, other courts are not bound by this decision and can rule the opposite way. Therefore, outside the Eastern District of California, you must continue to provide progress notes for the DMERCs.

The need for progress notes has been and continues to be a point of contention for suppliers because it is often difficult, time-consuming, and costly to obtain such documentation. However, it is in the supplier’s best interest to do so, preferably prior to or contemporaneous with the provision of the equipment. At this point in time, the physician is most likely to be helpful and provide a supplier with the necessary documentation. Further, if the documentation does not contain the appropriate criteria to qualify the patient for the equipment being requested, the supplier can make a decision not to place the equipment or to ask the patient to execute an advance beneficiary notice.

Oxygen Documentation
Another area of concern is oxygen—particularly the provision of oxygen based on qualifying tests performed during exercise. In such cases, it is necessary to provide proof that oxygen improved the hypoxemia demonstrated during exercise when the patient was breathing room air.

This means a supplier needs three tests to qualify a person for oxygen during exercise. The first is an “at-rest test” on room air. If a patient does not qualify at rest, the patient should be tested during exercise on room air. If the patient qualifies for oxygen during exercise, a follow-up test must be conducted with the patient exercising while on oxygen. The purpose of the follow-up test is to show that hypoxemia during exercise improves with oxygen.

In recent audits, suppliers have been penalized for not having a copy of the qualifying oxygen test or documentation in the physician progress notes that indicates the qualifying oxygen test results. Once again, documentation is much easier to obtain before an audit. Therefore, we recommend that suppliers obtain this documentation prior to placing the equipment with the patient. Our best advice is to have as much documentation prior to submission of the claim as possible. Planning ahead and obtaining extra documentation will help you withstand DMERC scrutiny in case of an audit and avoid recoupment.

Denise M. Fletcher, JD, is an attorney with the Health Care Group of Brown & Fortunato PC, an Amarillo, Tex-based law firm. Fletcher is Board Certified in Health Law by the Texas Board of Legal Specialization and represents DME companies, pharmacies, and other health care providers throughout the United States and Puerto Rico. She can be reached via email: dfletcher@bf-law.com.