Why are more than 90% of Medicare claims for dispensing glasses incorrect? Because the complexity and variety of elements required for these claims cause many well-intentioned ophthalmic staff members to process paperwork incorrectly.

What most doctors and their staffs don't realize is that they may be piling up thousands of dollars in faulty claims that could put their practices at serious risk. Fixing these problems now -- as opposed to when the auditor comes calling -- can help you avoid fines and penalties later, not to mention heavy legal expenses.

If you're dispensing eyewear, or plan to soon, you'll want to read on to make sure you avoid these common problems.

Much of the confusion over Medicare claims for glasses stems from changes Medicare implemented at the end of 1993. The changes resulted in a new mechanism for reimbursement of supplies, including eyeglasses and contact lenses.

Four regional carriers were established to take over processing of claims for durable medical equipment, prosthetics, orthotics and supplies. These four carriers, called Durable Medical Equipment Regional Carriers (DMERCs), have jurisdiction over the entire country. (The existing Medicare carriers no longer process claims for eyeglasses and contact lenses, as well as many other supplies.)

In creating these regional carriers, Medicare changed the method of claims submission as well. Now, providers must submit claims according to the beneficiary's address rather than the provider's business address; likewise, payment rates are based on the beneficiary's address.

For example, if a beneficiary who resides in Rhode Island visits an ophthalmologist located in Massachusetts to purchase eyewear, the DMERC for Region A will process the claim based on rates in Rhode Island, not in Massachusetts. And if the same beneficiary purchased eyewear in Florida, the provider in Florida would be obliged to file the claim with the DMERC for Region A rather than the DMERC for Florida (Region C).

These claims are frequently longer and more involved than other ophthalmic claims. Attention to detail is very important. Besides making sure you send claims to the correct DMERC, your office needs to address the following points:

• The proper codes must be identified.
• Charges must be allocated carefully.
• The patient's responsibility for all non-covered elements, deductibles and co-payments must be carefully computed. Proper written notice of responsibility for noncovered elements, deductibles and copayments must be given to the beneficiary.
• These claims require specific information, including the cataract surgeon's name, the date of surgery and the operated eye.
• All of the usual collateral issues associated with patient demographics are concerns as well.

The most common error on a DMERC claim is the wrong date of service. The proper date is the date of delivery, not the order date, as usually identified by the optician.

Another common error is the wrong place of service; remember, the patient's home is the proper place of service. Other errors include:

• choosing the same HCFA Common Procedure Coding System (HCPCS) code for the right and left lenses, even when the prescription for each eye is significantly different
• omitting modifiers (GA, ZY, RT, LT, ZX, etc.)
• failing to get signatures on the Physician Notice Form and Deluxe Feature Form.

The most costly error, however, is miscalculating the beneficiary's obligation for non-covered items and co-payments. Because the calculations can be time consuming, specialized computer software is very helpful. Check with your computer expert or software provider to find out if your computer system has the capability to automate these calculations.

Miscalculations are costly because they can deprive your practice of just reimbursement.

As your office sets up to file these claims correctly, keep these eligibility requirements in mind.

First, remember that Medicare usually doesn't pay for glasses or contact lenses unless the patient is pseudophakic, aphakic or congenitally aphakic. For pseudophakic patients, special limitations on this benefit were imposed by the Omnibus Budget Reconciliation Act of 1990 (OBRA-90). The law provides that Medicare beneficiaries, during their lifetimes, may not receive anymore than:

"...one pair of conventional eyeglasses or contact lenses furnished subsequent to each cataract surgery with insertion of an intraocular lens..."

Aphakic patients still retain more generous benefits, which provide for the replacement of eyeglasses and contact lenses, as needed.

Because the medical necessity requirement of Medicare regulations is applicable to pseudophakic patients, the provisions of OBRA-90 do not guarantee that these patients will always receive a pair of glasses (or contacts) following each surgery; it may not be necessary or needful.

For example, suppose a patient receives a pair of glasses following cataract surgery on his right eye, then undergoes cataract surgery on the left eye 2 weeks later. Is this patient eligible for another pair of glasses in 2 weeks? Answer: only if you can show that another frame and two lenses are medically necessary.

You should also keep in mind that Medicare doesn't cover all features of eyeglasses. As we all know, patients elect some features for cosmetic reasons or for extra convenience. But these features are not medically necessary, in the strict sense.

The prescription in the lenses and a standard frame to hold them are medically necessary. But the following are rarely covered:

• ultraviolet (UV) filters (V2755)
• tints (V274x)
• photochromic lenses (V2744)
• oversize lenses (V2780)
• anti-reflective coating (V2750)
• polycarbonate lenses

To qualify a patient for Medicare reimbursement for these features, you must provide explicit documentation of medical necessity in the chart and in the optician's prescription.

When your office provides an item for cosmetic reasons, such as some tints, or for convenience sake, such as anti-reflective coating, your staff must ask the Medicare beneficiary for full payment and append the ZY modifier to the HCPCS code for these items on your HCFA-1500 claim forms.

The ZY modifier notifies the DMERC carrier that the item is not medically necessary and a denial is expected. To provide a record of your conversations with these patients, plus evidence of their financial responsibilities, you must get the beneficiary to sign a Physician Notice form when you order the extra features. (See a sample of the Physician Notice Form that you can use in your practice on page 80.) The staffer should also append the GA modifier to the HCPCS codes, which identifies these items listed on the Physician Notice and alerts the carrier that the patient has signed the form.

In rare cases when you identify these features as medically necessary, your staff should append the ZX modifier to the HCPCS code on your claim form. Be certain that the chart documentation supports the medical necessity and that you provide a credible reason to justify the claim. For example, a UV filter is ordered because the IOL does not have filtration capability for ultraviolet wavelengths.

Now let's look at what needs to happen in your office when Medicare treats an extra feature as deluxe. As I previously discussed, the patient is obliged to pay for the added cost, over and above the standard allowed amount for that feature. For example, frames may be standard or deluxe; the patient pays the extra cost (V2025), beyond a standard frame (V2020).

Keep in mind that progressive power lenses are treated as deluxe items. The standard amount for bifocal (V22xx) or trifocal (V23xx) lenses is covered and any residual cost is a non-covered expense (V2781).

In both cases, your office needs to give the patients written notices before they receive the eyeglasses. (See "Medicare Policy on Deluxe Frames and Lenses.)

Other features that are described as non-covered, without regard to the patient's circumstances, include scratch resistance coatings (V2760) and all low vision aids (V26xx).

To ensure staff compliance with these guidelines, I strongly recommend that you conduct a meeting to discuss current policies and how they should be modified. It's extremely important to make certain that your internal billing system is consistent with Medicare requirements.

Spending the time and effort to ensure compliance now, will assuredly spare you needless aggravation and potential legal costs later.

Medicare will only pay for services that it determines to be "reasonable and necessary" under section 1862(a)(1) of the Medicare law. If Medicare determines that a particular service, although it would otherwise be covered, is "not reasonable and necessary" under Medicare program standards, Medicare will deny payment for that service. I believe that, in your case, Medicare is likely to deny payment for:

________________________________________________________________________________________________________

• Medicare does not usually pay for ultraviolet lenses.
• Medicare does not usually pay for oversize lenses.
• Medicare usually does not pay for anti-reflective coating.
• Medicare usually does not pay for two (2) pairs of glasses
  following one surgery.
• Medicare usually does not pay for lens tint.
• Medicare usually does not pay for scratch resistant coating.
• Medicare usually does not pay for polycarbonate lenses.
• If you have exhausted your Medicare benefits for postsurgical eyeglasses, (limit one pair per surgery) Medicare will not pay.

I have been notified by my physician that he or she believes that in my case, Medicare is likely to deny payment for the service(s) identified above, for the reasons stated. If Medicare denies payment I agree to be personally and fully responsible for payment.

_____________________________________________

Signature Date

Name ____________________________ HIC # ____________

Date ______________________________

Deluxe Frames ___________________________________

Deluxe Lenses ___________________________________

Having been informed that an extra charge is being made by __________________ for deluxe frames, and that this extra charge is not covered by Medicare, and that standard frames are available for purchase from ______________ at no extra charge, I have chosen to purchase deluxe frames.

Signature ____________________________________________ Date

Kevin Corcoran is president of Corcoran Consulting Group in San Bernardino, Calif. You can reach him at (800) 399-6565