Government Goes After DME Overpayments to SNF Benes

WASHINGTON–According to a new report from the Office of
Inspector General, Medicare Part B made $100.8 million in potential
overpayments to DMEPOS suppliers on behalf of beneficiaries in Part
A-covered skilled nursing facilities during 1999-2002–and the
government wants the money back.

Those years, according to the report, were before CMS’ Common
Working File edits to prevent such overpayments were operational.
As a result, the DMERCs were unable to initiate recovery actions.
After the edits were fully implemented, OIG’s computer match
identified potential overpayments of $15.4 million in 2003.

Under the prospective payment system, home medical equipment
furnished during beneficiaries’ SNF stays is generally included in
the facilities’ Part A payments, so Part B payments by any of the
four DMERCs to suppliers for such items were overpayments.

Now, when SNFs submit their claims before equipment suppliers
submit theirs, prepayment edits identify and deny payments for
inappropriately billed Part B services before CMS reimburses the
suppliers, Inspector General Daniel Levinson explained in a letter
accompanying the report. When suppliers submit their claims before
SNFs submit theirs, postpayment edits identify Part B overpayments
after CMS has reimbursed the suppliers, and those overpayments must
be recovered through offset or collection activities.

The OIG undertook the review, Levinson said, to determine the
amount of overpayments before the edits were in place, and to
figure out how much of the overpayments had been recovered after
the edits became operational.

According to the results, a statistical sample showed that the
DMERCs had not recovered approximately 69 percent of the potential
overpayments for 2003. “This problem occurred because two of the
four DMERCs did not implement procedures to process and recover the
backlog of overpayments created by the new edits. As a result, we
estimate that the DMERCs did not recover $11.2 million of the $15.4
million in potential [2003] overpayments,” Levinson said.

Based on its findings, the OIG recommended that CMS direct its
contractors to:

–Review the $100.8 million in potential overpayments for
1999-2002 and make appropriate recoveries;
–Initiate recovery of the estimated $11.2 million in 2003
overpayments; and
–Ensure that they have established proper controls to recover
overpayments that the Common Working File edits identify.

According to the OIG, CMS concurred with the
recommendations.