Overpayments for diabetes supplies persist, OIG says

Tuesday, November 24, 2015

INDIANAPOLIS – The Office of Inspector General is not satisfied with National Government Services’ progress in preventing overpayments for diabetic test strips.

The OIG found that NGS, the DME MAC for Jurisdiction B, made payments to suppliers for dispensed strips when the beneficiaries had not nearly exhausted previously dispensed strips by different suppliers, resulting in overpayments of about $3.2 million in 2013.

“NGS stated (in response to a previous review in 2007) that it was in the process of developing a system edit that would address the problem of overlapping dates of service on claims for individual beneficiaries,” the OIG stated in a report published this week. “We conducted this follow-up review to determine whether this system edit had been implemented and was effective in preventing overpayments.”

The OIG based its findings on a sample of 100 claims. It found 17 were allowable, 13 were non-errors because the suppliers were no longer in business and the supporting documentation could not be obtained, and 70 may have not been allowable because the suppliers dispensed strips before the beneficiaries’ existing supplies were nearly exhausted. For more than half of the 70 claims, the suppliers dispensed strips when there were more than 60 days remaining in the beneficiaries’ existing supplies.

On the basis of the sample, the OIG estimates about $3.2 million, or 74%, of the $4.4 million that NGS paid to suppliers may have been unallowable for Medicare reimbursement.

The OIG recommends that the NSG implement a system edit to identify claims submitted by multiple suppliers with overlapping service dates for strips dispensed to the same beneficiary. It argues that the contractor’s current system was designed only to identify claims with a quantity of strips that exceeds the utilization guidelines.