Funding Essentials

Avoiding KX Modifier Mix-Ups

The KX modifier is one of the most commonly and incorrectly used Medicare modifiers. It is not specific to any one single policy and has a fairly short official description: Specific Required Documentation on File.

The KX modifier serves as an attestation by the supplier that the requirements for its use, as outlined in the particular Local Coverage Determination (LCD), have been met for the specific beneficiary. If you append the KX modifier to a claim, you are telling Medicare that your claim has met the specific documentation requirements in the policy, and this documentation is available upon request from the DME MAC or any other auditing body.

This concept is easy to understand, but the practical application is where problems arise.

A Key Error Among DME MACs

According to the most recent round of Comprehensive Error Rate Testing (CERT) audits of DME MAC claims, payment based on the KX modifier is one of the key errors DME MACs commit. When CERT auditors look at the actual documentationon file when a KX modifier was used, they find the supporting required documentation was not in the file, as the KX modifier indicated.

This is the inherent problem with the KX modifier. The DME MACs process thousands of claims a day. The DME MACs are run by contractors (usually insurance companies) that have bid on the right to process DME claims for a specific region. There are only four such contracts for DME. In order to handle this workload, the DME MACs seek to automate as many claims as possible.

Every claim could be examined by a claims processor, but that would take a labor force much larger than currently employed. This would also create a reduction in profit for the contractors and delay of payment to providers. If you look at the guidelines the contractors have established, you see the instructions for a claim with a KX modifier indicate that, if all else is in order, pay the claim.

The KX modifier does precisely what it is supposed to do — streamline claims processing so the DME MACs can efficiently process the thousands of claims they receive daily. However, when a CERT contractor looks at that same claim in post-payment review, they look at the entire claim, including the documentation on file that the KX modifier indicated was present.

Upon review of the claim, CERT contractors are making a determination that documentation on file is not adequate to prove medical necessity. The results of their audits find these claims were paid incorrectly, even though they were processed according to the DME MACs’ internal claims processing guidelines. With CERT contractors driving the process, DME MACs have been forced to change their policy interpretation to match the CERT contractors, or to audit more claims prior to payment to ensure the KX modifier is being used correctly.

In mid 2010, the Office of Inspector General (OIG) released the results of their review of select claims from Jurisdictions A and B that had the KX modifier. Of the 100 claims sampled for each contractor, the OIG found that over half in each jurisdiction were processed incorrectly upon review, i.e., documentation on file did not meet policy guidelines.

Interestingly, in their responses, the DME MAC contractors cited the KX modifier as a tool for speeding the processing of claims and indicated that more stringent processing would require more funding.

How Can This Be Resolved?

There is a variety of answers, some more feasible than others:

1. Eliminate the KX modifier, return to paper claims submission and require the documentation to be submitted with the claim itself. This takes care of the problem, but removes the automation and would require claims to be manually processed. The time and effort this would add to a DME MAC’s workload make it an unrealistic fix.

2. Ensure CERT contractors and DME MACs are on the same page when it comes to actual documentation requirements. DME MACs are responsible for processing Medicare DME claims. The CERT contractors are responsible for making sure the DME MACs are doing their job correctly. If there are different expectations as to what documentation is required for a specific policy, consistent findings by the CERT contractors that claims were processed incorrectly are sure to result…and have been the results in a number of areas.

3. Allow prior authorization for certain products. This is a great way to ensure claims are processed correctly and that the patient qualifies up front. The problem? See item number 1. That is, unless the Centers for Medicare & Medicaid Services (CMS) implements a new process, which would be to:

4. Develop a standardized format for documentation so subjectivity is removed from the process. This would ensure CERT and DME MAC contractors look for the same things in a claim and would eliminate providers and clinicians from guessing whether their files contain the “correct” information. Currently, especially in the power mobility device (PMD) policy, a provider may feel they have sufficient documentation to add a KX modifier to a claim, only to find out in a CERT audit that the claim did not contain what the CERT contractor was looking for.

Medicare’s “Power Mobility Devices: Complying with Documentation& Coverage Requirements” Fact Sheet, available at, states, “The face-to-face examination must be relevant to mobility needs and include…” and then lists a variety of items, such as pace of ambulation and upper-extremity strength. However, refer to the asterisk: “While it is important to fully evaluate the patient during the face-to-face examination, it is important to note that all elements listed may not apply to every patient. Professional discretion is necessary to determine if these items are required as part of the face-to-face examination.” Clear as mud?

Until CMS & Its Contractors Resolve These Issues…

There are things you can do as a provider to protect yourself in an audit situation.

Take a critical eye to the documents you receive and ask if, based on the written information (not necessarily the condition you know the patient to be in), the patient qualifies for the item based on policy guidelines. Remember that it is quality, not quantity, of the documentation. Fifty pages of chart notes are useless for a PMD claim if they simply repeat blood pressure readings and medications.

Remember that denied claims initially stand a good chance of being overturned the further along the appeals process you get. Double-check documents, and make sure all statutory elements are satisfied. In other words, make sure the seven-element order has the required seven elements. A surprising number of claims fail CERT audits because such information is missing or incomplete.

The more prepared your files are, the more comfortable you will be appending the KX modifier, and the better off you will be in a CERT audit.

This article originally appeared in the May 2011 issue of Mobility Management.

About the Author

Paul Komishock is general manager of government affairs for Pride Mobility Products Corp.

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