OIG lays out year's worth of DME investigations

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Sunday, November 4, 2007

WASHINGTON - When it comes to home medical equipment, the Office of Inspector General (OIG) has plenty of work ahead of it, according to the agency's 2008 Workplan. Here's a rundown of what the agency has in store for the industry:

DME payments for beneficiaries receiving home health services:
The OIG will review Medicare claims for DME, prosthetics, orthotics, and supplies furnished to beneficiaries receiving HHA services. The OIG will determine whether DME claims paid by Medicare on behalf of beneficiaries receiving home health services were allowable.

Medicare payments for DME claims with modifiers:
The OIG will review the appropriateness of Medicare payments to DME suppliers who submitted claims with modifiers. For certain items to be covered under the Medicare program, a DME supplier must use modifiers to indicate that it has the appropriate documentation on file. Upon request, the supplier is required to provide the documentation to support its claim for payment. Reviews of suppliers conducted by several of CMS's DME regional carriers found that suppliers had little or no documentation to support their claims. This suggests that many of the claims submitted may have been invalid and should not have been paid by Medicare. The OIG will determine whether payments to DME suppliers were made in accordance with Medicare requirements.

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

Durable Medical Equipment payments in South Florida:
The OIG will review Medicare claims submitted by South Florida providers for DME items and supplies. In a recent review of DME suppliers in three
South Florida counties, the OIG found that 31% of suppliers did not meet selected Medicare supplier standards requiring suppliers to maintain a physical facility and to be open and staffed during reasonable business hours. The OIG will determine whether DME claims paid by Medicare to
suppliers in South Florida were allowable.

Comparison of prices for negative pressure wound therapy pumps:
The OIG will compare suppliers' acquisition costs and prices of certain negative pressure wound therapy pumps to Medicare reimbursement.
Between 2001 and 2006, Medicare payment for these pumps rose 624%, and a recent OIG study found that 24% of pump claims did not meet Medicare coverage criteria. The OIG will assess the range of supplier purchase prices for the pumps to determine how Medicare reimbursement compares to the median supplier purchase price.

Payment suspensions for medical equipment suppliers:
The OIG will review whether CMS has inappropriately made payments to suspended or excluded DME suppliers. The OIG will assess the adequacy of CMS's safeguards to prevent payment to providers and suppliers that have been suspended or excluded.

DME claims review:
The OIG will determine whether payments for items such as power wheelchairs, orthotics and other medical supplies were appropriate; whether the suppliers' and physicians' documentation support the claims; and whether the items were medically necessary and/or whether the beneficiaries actually received the items.

Appropriateness of Medicare reimbursement for pressure-reducing support surfaces:
The OIG will review the appropriateness of payments for pressure-reducing support surfaces. In 2006, Medicare-allowed charges for support surfaces reached $164 million. The OIG will conduct a medical review of claims to determine the appropriateness of payments for support surfaces.

Medicare payments for power wheelchairs:
The OIG will review documentation supporting claims for power wheelchairs paid for by Medicare and determine whether Medicare beneficiaries received the required face-to-face examinations from the referring practitioners prior to receipt of power wheelchairs. 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, Medicare payments for power wheelchairs increased again in 2005 to approximately $920 million. We will determine the appropriateness of Medicare payments for power wheelchairs.

Supplier purchase prices for power wheelchairs in the Medicare program:
The OIG will review invoice prices for power wheelchairs and compare those prices to the Medicare fee schedule to assess pricing variations. In 2004, the OIG found that the reimbursement rate paid by Medicare for power wheelchairs exceeded the prices suppliers paid by 242%. On
Nov. 15, 2006, CMS implemented a revised Medicare fee schedule for power wheelchairs as part of a strategy to curb fraud and abuse and address the significant growth in expenditures for power wheelchairs and similar items under the Medicare program. The OIG will determine the difference between the Medicare fee schedule for power wheelchairs and suppliers' invoice prices.

Part B services in nursing homes:
The OIG will review 2006 Medicare claims data to determine the appropriateness of Medicare Part B DME services allowed for beneficiaries during nursing home stays not covered by Medicare Part A. A previous OIG report found that $210 million was potentially inappropriately paid for DME for beneficiaries residing in nursing homes.

Medicare Part B drug reimbursement:
The OIG will review drug manufacturers' methodologies for computing the ASP. This review will provide policymakers with information on whether manufacturers' calculations of the ASP complied with the requirements of the MMA.

Upselling of inhalation drugs by suppliers:
We will review how often inhalation drug suppliers switch Medicare beneficiaries from less expensive generic inhalation drugs to more expensive brand-name inhalation drugs.

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