DME: A full caseload for the OIG

WASHINGTON - The Office of Inspector General (OIG) will scrutinize the HME industry big time next year, examining the appropriateness of Medicare payments for power wheelchairs, hospital beds, oxygen concentrators and enteral nutrition, according to its work plan for 2010.

The OIG will review payments for these products to determine whether they were "reasonable and necessary." Prior OIG reviews have stated that these products are sometimes not ordered by physicians or not delivered to or needed by beneficiaries. The OIG plans to target geographic areas with high-volume claims and reimbursement.

Other DME-related items in the work plan, released last week:

Physician self-referral for DME services:

Unless exceptions apply, physicians are prohibited from making referrals for furnishing designated health services, including DME, to entities in which physicians have financial relationships.

Medicare payments for DME claims with modifiers

For certain items to be covered under Medicare, DME suppliers must use modifiers to indicate that they have appropriate documentation on file. Prior reviews have shown that suppliers sometimes have little or no documentation to support their claims.

Appropriateness of DME categorization

Some DME items may be in categories that no longer reflect the current costs of the equipment, expected duration of beneficiary use or extent of servicing involved to maintain the equipment. The categories are: inexpensive or other routinely purchased DME; items requiring frequent and substantial servicing; customized items; oxygen and oxygen equipment; other covered items (other than DME); and capped rental items.

Medicare pricing for parenteral nutrition

In 2007, Medicare spent more than $100 million for parenteral nutrition related services. Prior reviews have show Medicare payments for parenteral nutrition codes averaged 45% higher than Medicaid prices, 78% higher than prices available to Medicare risk contract health maintenance organizations and 11 times higher than some manufacturers' contract prices.

Mediare Part B payments for home blood-glucose-testing supplies

The OIG will determine the appropriateness of Medicare Part B payments to DME suppliers for home blood glucose test strips and lancet supplies.

Medicare payments for power wheelchairs

The OIG will review documentation supporting claims for power wheelchairs paid by Medicare and determine whether beneficiaries received the required face-to-face examinations from the referring practitioners prior to receipt of equipment. In 2003, Medicare payments for power wheelchairs peaked at $1.2 billion. In 2004, as a result of expanded CMS program integrity initiatives, power wheelchair spending decreased to $850 million; however, problems may persist. In 2007, about 173,300 Medicare beneficiaries received power wheelchairs, costing $686 million.

Medicare payments to DME suppliers for power wheelchairs

The OIG will review documentation for payments to DME suppliers for standard and complex rehab power wheelchairs to determine whether suppliers meet Medicare's coverage criteria and medical necessity documentation requirements. It will also determine whether suppliers had documentation from the beneficiaries' medical records, as required, that clearly supported the medical necessity of the power wheelchairs.

Repair and servicing of capped rental DME

The OIG review servicing records from suppliers and interview beneficiaries regarding their experiences with capped rental DME to determine whether Medicare made proper payments for maintenance and repair services.

Medicare enrollment and monitoring

A recent OIG study found that DME suppliers and home health agencies (HHAs) omitted or provided inaccurate information on enrollment applications, which result in improper enrollment.