58% of Improper Payments due to Medical Necessity for Ventilators

by  Christine Woolstenhulme, QMC QCC CMCS CPC CMRS
Apr 29th, 2021

Proper documentation not only protects the provider, the payer, and the patient, it protects the integrity of the entire healthcare system. When it comes to coverage and documentation for durable medical, the DMEPOS supplier and staff must be familiar with the National and Local Coverage Determinations (NCDs and LCDs) as these are two of the most important aspects of Medicare. 

NCDs and LCDs are used by Medicare and their administrative contractors for coverage determination information and determining if the service is reasonable and necessary, as well as if it will be reimbursed by Medicare. Medicare and its contractors are not the only payers to follow these determinations. Additionally, many other payers have adopted Medicare's rules and policies, so ensure you are familiar with each payer's rules.   

For the 2017 CERT report period, the improper payment rate for ventilators was 57.4 percent, with medical necessity errors for ventilators accounting for 58 percent of improper payments. For the purpose of the article in 2017, there were two HCPCS codes used to report home ventilators.

E0465 - Home ventilator, any type, used with invasive interface, (e.g., tracheostomy tube)

E0466 - Home ventilator, any type, used with non-invasive interface, (e.g., mask, chest shell)

The following is found in the NCD National Coverage Determination (NCD) for Durable Medical Equipment (DME) Reference List (280.1). 

Medical necessity errors for ventilators accounted for 58 percent of improper payments. In other words, 58 percent of payment errors on ventilators were recovered due to providers' documentation failing to document treatment of beneficiaries with one of the following conditions or failed to indicate the ventilator was required to treat at least one of the three medical conditions listed.