For years now, ancillary providers ranging from durable medical equipment providers (DMEs), independent diagnostic testing facilities (IDTFs), and home health agencies have been required under Medicare regulations to obtain copies of referring physicians’ medical records to prove medical necessity for the items and services the physician ordered. Providers are to utilize a template “Dear Physician” letter created by CMS that explains the need for the ancillary provider to obtain the physician’s records. This issue typically arises during audits, prepayment reviews, and other program integrity activities by MACs and ZPICs. The requirement has drawn the ire of ancillary providers because physicians are not required by Medicare to provide the documentation, not sanctioned if they fail to provide the documentation, and have no financial incentive to do so. Physicians view such requests as is just one more uncompensated service they are being asked to perform. Furthermore, even when the documentation is obtained by the ancillary provider, it is often found by Medicare contractors to lack information justifying medical necessity, making the provider ultimately responsible for the physician’s own poor record keeping or decision making.

The issue of the physician documentation requirement has finally been legally challenged. The American Orthotic & Prosthetic Association recently filed suit against the Department of Health and Human Services, asserting that the physician documentation requirement is an invalid rule because it was never adopted through the formal rulemaking process, and that it violates the Medicare Act and other statutes. The lawsuit seeks a court order prohibiting Medicare from continuing to rely on the “Dear Physician” letter as a basis for denying claims, and ordering Medicare to reopen and pay all claims denied based on the physician documentation requirement. If successful, this case may be used as a basis for other types of ancillary providers to challenge these requirements.