OIG work plan includes several new reviews for DME

Wednesday, October 3, 2012

WASHINGTON – What durable medical equipment will bear the brunt of the Office of Inspector General’s (OIG’s) scrutiny next year? Diabetes supplies.

The OIG, which released its work plan for 2013 on Oct. 3, has four reviews planned for this product category, including one new review related to competitive bidding:

1.  A review that will focus on supplier compliance with payment requirements for blood glucose test strips and lancets (The LCDs require that the physician’s order for each item billed include certain elements and be retained by the supplier);

2.  A review that will focus on the effectiveness of system edits to prevent inappropriate payments for strips and lancets to multiple suppliers (Prior OIG work found that inappropriate payments were made to multiple suppliers for test strips and lancets dispensed to the same beneficiary with overlapping service dates);

3.  A review of potential questionable billing for test strips in 2011 (Prior OIG work found that test strips are vulnerable to improper claims, fraud, waste and abuse); and

4.  A review of improper billing for test strips in competitive bidding areas (There is concern that suppliers may be undermining the program by a.) billing for non-mail order test strips that are actually provided by mail order to receive a higher reimbursement amount or b.) providing incentives to beneficiaries to receive test strips via non-mail order vs. mail order).

[See also: CMS scrutinizes diabetes bids]

Also included in the OIG’s work plan are new reviews of power mobility devices (PMDs), lower limb prostheses and CPAP devices.


This review will focus on whether Medicare payments for PMDs were made in accordance with the requirement that all services covered by Medicare were “reasonable and necessary.” The OIG will also determine if savings by Medicare can be achieved for PMDs not affected by the elimination of the first-month purchase option.

Lower limb prostheses

This review will also focus on whether Medicare payments were made in accordance with the requirement that all services covered by Medicare were “reasonable and necessary.” The OIG conducted a national review of suppliers of lower limb prostheses and identified 267 suppliers that had questionable billings. Prior work by the OIG found that suppliers frequently submitted claims that did not meet certain requirements; were for beneficiaries with no claims from their referring physicians; and had other questionable characteristics.

CPAP devices

This review will focus on the reasonableness of Medicare’s replacement of supplies compared to that of other federal programs, such as Medicaid and the Veterans Affairs.

[See also: CMS does about-face on re-supply items]

Additionally, the work plan includes a review of the requirements and processes used by accreditation agencies for granting accreditation to ensure that suppliers meet each of Medicare’s quality standards.

FMI: https://oig.hhs.gov/reports-and-publications/workplan/index.asp#current