Wound providers should take note

Friday, August 31, 2007

WASHINGTON - A recent report from the Office of Inspector General (OIG) could be just the tip of the iceberg for providers of negative pressure wound therapy pumps.
The report, "Medicare Payments for Negative Pressure Wound Therapy Pumps in 2004," found that nearly 25% of pump claims did not meet coverage criteria.
Bernie Laurel, vice president, Medela Healthcare Americas, said HME providers need to take the report seriously.
"I don't think this is a routine effort on the part of OIG," said Laurel. "I think it's the beginning of an in-depth investigation to prevent not only fraud and abuse but also waste in the Medicare program."
Of particular significance: 44% of claims were not fully supported by medical records.
"What the OIG is saying is that pump claims must be supported by the entire medical record," said Laurel. "Otherwise, there are going to be continual denials for payment."
The review was partly triggered by a 444% increase in payments between 2001 and 2005. That growth can be partly attributed to the opening up of a market previously dominated by Kinetic Concepts, Inc (KCI), which historically has not used providers to distribute its products. In April, a judge affirmed an earlier jury verdict that Medela and BlueSky Medical Group did not infringe on KCI's patents (See HME News, July 2007). Medela has since launched its Invia Healing System with eventual plans to use HME providers to reach the homecare market.
"For anything new out into the market, they want to look at the reimbursement rate," said Tom Hanchar, president and CEO of Thomas International, a provider in Fort Wayne, Ind., "(For these pumps) that's $1,600 to $1,800 a month. It's a big-ticket item."
While $21 million may seem like a drop in the bucket in a market currently estimated at between $1.6 billion and $6.8 billion annually, providers should consider another reason why the pumps are being scrutinized by CMS: They are included in national competitive bidding.
"I clearly see NCB and the OIG report as linked to reducing fraud and waste," said Laurel.