OIG report disputes CMS’s fraud figures

Tuesday, September 30, 2008

WASHINGTON--Medicare’s audits of DME claims leave much to be desired, according to a headline-grabbing report released by the Office of Inspector General (OIG) in August.

The report charges that Medicare’s outside auditor, AdvanceMed, reviewed provider claims but not supporting documentation, including medical records. As a result, AdvanceMed reported an error rate of only 7.5% for DME in 2006. It should have been 28.9%, the OIG found.

“We continue to recommend that CMS obtain all medical records (including, but not limited to, physicians’ records) for DME claims and contact the beneficiaries named on high-risk claims,” the OIG stated.

The OIG also recommends that CMS establish a written policy to address the appropriate use of clinical interference; document oral guidance that conflicts with written policies; and instruct contractors to provide additional training to physicians that focuses on improving their medical record documentation.

The report could both help and hurt the industry. Like a recent report that details the Government Accountability Office’s (GAO’s) success in getting two sham HME providers approved for billing privileges, it shows Medicare doesn’t have its act together, not even close, industry sources say.

But the report also shows Medicare’s claim that it decreased improper payments for HME to $700 million in 2006 may have been mostly hot air, sources say.

“These reports are only going to raise the visibility of the fraud and abuse issue, which will likely lead to congressional action in some form,” said Walt Gorski, vice president of government affairs for AAHomecare.

While industry sources lauded the OIG for investigating fraud, it was disappointed with a story about the report in The New York Times that confused fraud and national competitive bidding. The Times wrote: “On July 1, Medicare instituted a new competitive bidding system that officials said would reduce both fraud and costs for medical equipment. On July 15, however, Congress suspended the program.

“Wrapping fraud and abuse and competitive bidding in the same cloth hides the fundamental problems that resulted in the delay,” including unfairly disqualified bidders, Gorski said.

Additionally, industry sources were irked that, once again, the HME industry was at the center of another government and media fraud investigation.

“If there’s $70 billion in Medicare fraud and HME represents less than 1% of that, where’s the other 69 billion?” said Wayne Stanfield, president of the National Association of Independent Medical Equipment Suppliers.