Diabetes supplies: Want to reduce fraud? Step up technology use

WASHINGTON - A new report from the Office of Inspector General (OIG) on questionable billing for diabetes testing supplies drew sharp criticism from AAHomecare.

In a report released in August, the OIG found that Medicare in 2011 allowed $6 million in claims for test strips that were inappropriate and another $425 million in claims that were questionable.

“They keep saying that there are questionable claims paid and questionable claims paid and questionable claims paid,” said Peter Rankin, government affairs manager. “My question is, why is CMS allowing those questionable claims to get paid?”

Questionable doesn't necessarily equal fraudulent, either, he says. The problem is reviewers must follow stringent requirements instead of using their clinical judgment.

“What they say is questionable isn't really questionable,” said Rankin. “There may be beneficiaries out there who need to test more than three times a day, but those claims are now questionable because they are over the allowable maximum.”

The report also found that suppliers in 10 geographic areas were responsible for 77% of that questionable billing, and that competitive bidding has reduced questionable billing for mail-order testing supplies in bid areas.

“The OIG, in this case, tries to make it seem like competitive bidding is alleviating problems,” said Rankin. “They neglect to address any fraud that may result in competitive bidding, such as companies that seek to corner a market and not provide services. They also neglect to address any sort of quality measures in test strips.”

The OIG report recommended that CMS enforce existing edits to prevent inappropriate claims and increase monitoring of suppliers. It also recommended that CMS provide more education to suppliers and beneficiaries, and to take appropriate action regarding inappropriate claims and suppliers with questionable billing.

A better way to address fraud, says Rankin, is for CMS to step up its technology game.

“CMS needs a more efficient way of processing claims,” he said. “We've also seen some success with prior authorizations and if CMS adopted that method, or a method of predictive modeling instead of pay and chase, that would truly alleviate fraud.”