OIG: CMS could have saved $7.6M on diabetic test strips

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Friday, August 7, 2015

WASHINGTON – The Office of Inspector General (OIG) has found that CGS Administrators made Medicare payments for diabetic test strips when beneficiaries had not exhausted previously dispensed supplies.

Based on sample results, the OIG estimates that $7.6 million or 74% of the $10.3 million that CGS paid to suppliers may have been unallowable for Medicare reimbursement.

“These potential overpayments occurred because CGS’s system edit was not designed to identify for review claims submitted by multiple suppliers with overlapping service dates for test strips dispensed to the same beneficiary,” the OIG states. “Rather, the system was designed to identify claims with a quantity of test strips that exceeded the utilization guidelines.”

The OIG sampled 100 line items and found that 12 were allowable; 17 were non-errors because the suppliers were no longer in business and the supporting documentation could not be obtained for review; and 71 may not have been allowable because the suppliers dispensed test strips sooner than 10 calendar days before the expected end of usage for the current product. For almost half of the 71 line items that may not have been allowable, the suppliers dispensed test strips when there were more than 60 days remaining in the beneficiaries’ existing supplies.

The OIG recommends that CGS implement a system edit to identify for review claims submitted by multiple suppliers with overlapping service dates for test strips dispensed to the same beneficiary.