Changing PMD rules create moving target

Did OIG use right rules for right time period?
Friday, December 11, 2015

SARASOTA, Fla. – The Office of Inspector General’s recent audit of mobility giant Hoveround raises questions about how the agency applies standards and extrapolates overpayment amounts.

Out of a sample of 200 randomly selected Hoveround claims for PMDs from 2010, the OIG found 154 did not meet Medicare requirements. Of those, the agency says 144 did not meet medical necessity requirements and 10 had incomplete documentation.

But Hoveround argues the OIG applied incorrect standards and is calling for the agency to withdraw its recommendation that the company repay the federal government a whopping $27 million.

“These very same audit claims were audited by two separate nationally recognized and prominent audit firms that concluded 94% of the claims in the OIG sample met Medicare documentation and medical necessity requirements,” said Hoveround in a written statement.

Since 2010, the DME MACs have published numerous LCD revisions, policy article updates, FAQs, guidance documents and checklists that have fine-tuned the documentation requirements for PMDs.

“There’s been a lot of changes over the past five years,” said billing consultant Sylvia Toscano, owner of Professional Medical Administrators. “Depending on which set of guidelines were applied, that would definitely influence the result of the audit.”

As for how the OIG arrived at the price tag for the overpayments: Hoveround says the agency took its audit of 200 claims with an overpayment of $387,000 and extrapolated it to approximately 13,000 claims with an overpayment of $27 million.

While the practice of extrapolation isn’t a new, healthcare lawyer Ross Burris says the OIG is starting to use it more and more. His advice to providers: make sure a qualified statistician conducts the extrapolation.

“People would be surprised by how often statistical reviews are not done properly,” he said.

Unlike DME MACs, which can issue overpayment demands, the OIG can only make recommendations to CMS based on its findings. Still, Stephanie Greene, chief consulting officer & general counsel for Acu-Serve, says it’s worrisome when the OIG shows up.

“The OIG can come in and audit you for a number of reasons, but normally they’re coming in because there’s a question of fraud or questionable billing practices,” she said.