OIG plans multiple DME investigations

Sunday, January 21, 2007

WASHINGTON, D.C. - The Office of Inspector General (OIG) outlined its goals and priorities for 2007 last week, and the 94-page document calls for a healthy number of investigations into the Medicare and Medicaid DME benefits.

The Work Plan reflects what the OIG believes to be problem areas within the Department of Health & Human Services. Recommendations for improvement follow each investigation.

For DME, the OIG plans to examine the following areas in 2007:

DME payments for beneficiaries receiving home health services
The OIG will review medical records for DME and supplies furnished to beneficiaries receiving HHA services to determine whether the items and supplies were reasonable and necessary.

Medicare payments for therapeutic footwear
The OIG will determine whether therapeutic footwear furnished by individual suppliers was reasonable and necessary for the beneficiaries. Medicare payments for therapeutic footwear totaled more than $130 million in 2003. A previous OIG report indicated that a significant percentage of payments made for therapeutic footwear did not have adequate documentation to support medical need.

Medicare Payments for DME claims with ZX, KX and KS modifiers
The OIG will determine whether DME suppliers that filed claims with ZX, KX and KS modifiers appropriately billed Medicare. Under the Medicare program, a DME supplier may use these modifiers to indicate that it has the appropriate documentation on file; upon request, the supplier will provide the documentation to support its claim for payment. Reviews by several CMS DME regional carriers of suppliers who had used the ZX, KX and KS modifiers 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.

Medical necessity of durable medical equipment
The OIG will determine the appropriateness of Medicare payments for certain DME items, such as power wheelchairs, wound care equipment and supplies or orthotics. The OIG will assess whether supplier documentation supports the claim, whether the item was medically necessary, and/or whether the beneficiary received the item.

Medicare pricing of equipment and supplies
The OIG will compare Medicare payment rates for certain medical equipment and supplies with the rates of other federal and state healthcare programs, as well as wholesale and retail prices. The review will cover such items as wheelchairs, parenteral nutrition, wound care equipment and supplies, and oxygen equipment and supplies.

Payments to Medicaid DME providers
Some states require that Medicaid DME providers maintain active Medicare enrollment as a condition of participation in the state Medicaid DME program. For states with this requirement, this study will determine the extent to which Medicaid providers who are not maintaining Medicare enrollment are receiving Medicaid payments for DME, contrary to state standards.

Billing for DME in hurricane-affected areas
The OIG will examine payments for DME supplies and equipment in the areas affected by the recent hurricanes. According to DMERC officials, suppliers in the hurricane-affected areas were not to bill for equipment until they could make contact with the beneficiary to be sure the equipment was still medically necessary and that the beneficiary had the equipment in use.