Updated on: June 22, 2012

No Documentation: Most Common Reason for Claim Denial

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Original story posted on: September 7, 2010

wiitalaROne of the most common reasons for a claim denial is "no documentation or insufficient documentation submitted."

 

That's one of the findings uncovered during the three-year recovery audit contractor (RAC) demonstration project. As you know, RAC reviews are now being conducted in all four regions of the country, and documentation, or lack of it, continues to be an issue.

The Centers for Medicare & Medicaid Services (CMS) recently issued transmittal SE1024 (https://www.cms.gov/MLNMattersArticles/downloads/SE1024.pdf) to educate inpatient hospital and skilled nursing facility providers about the following "high dollar improper payment vulnerabilities."

 

  • Provider non-compliance with timely submission of requested medical documentation; and

 

  • Insufficient documentation that did not justify that the services billed were covered, medically necessary, or correctly coded.

 

The goal, says CMS, is to help providers understand Medicare's documentation requirements, take steps to comply with them, and, ultimately, to avoid unnecessary denials.

 

Timely Submission

 

The bottom line is that providers must submit medical documentation within 45 days of the date of the RAC's additional documentation request (ADR) letter. Medicare contractors, including RACs, have the legal authority to review any information, including medical records, pertaining to a Medicare claim. If a provider fails to submit documentation, there is no justification for the services or the level of care billed. Failure to submit medical records (unless an extension has been granted) results in a claim denial.

 

To receive payment for a claim, there must be sufficient documentation in the provider's records to verify that the services were provided to eligible beneficiaries. The documentation also must prove that the service met Medicare coverage and billing requirements, including being reasonable and necessary; provided at an appropriate level of care; and correctly coded.

Although it's up to providers to submit comprehensive and on-time documentation, RACs also have certain responsibilities. For example, they must clearly indicate deadlines for submission of medical records in their ADR letters and suggest the type of documentation that will assist them in adjudicating the claim. Before issuing a denial for a failure to submit documentation, they also must contact the provider at least one time after the initial contact.

 

Responding to ADR Letters

 

Instead of sitting back waiting for your first RAC ADR letter, implement a plan of action for responding to them. In SE1024, CMS lists several action steps. For example:

 

  • Develop a team to coordinate all RAC activities, such as tracking audit and appeal findings, identifying patterns of error, and implementing corrective actions. Consider assigning a point of contact and, if necessary, an alternate, who will be responsible for these and other tasks.

 

  • Make sure to submit to the RAC the precise address and contact person where your ADR letters must be sent. (Check your RAC's web site for contact information.)

 

  • Ensure that the RAC received the documentation submitted by checking the status on your RAC's website.

 

  • Monitor your RAC's websites for updates on approved new issues. As CMS points out, "This will assist providers in better understanding what audits are taking place so they can prepare to respond to ADR letters."


About the Author

 

Randy Wiitala, BS, MT (ASCP) is a senior healthcare consultant with Medical Learning, Inc. (MedLearn), St. Paul, MN. MedLearn is a nationally recognized expert in healthcare compliance and reimbursement. Founded in 1991, MedLearn delivers actionable answers that will equip healthcare organizations with their coding, chargemaster, reimbursement management and RAC solutions.


Contact the Author

 

rwiitala@medlearn.com

 

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