OIG Aims at HME — Again

WASHINGTON — HHS’ Office of Inspector General has released
its 2011 work plan and, as in 2010, various investigations and
audits of Medicare payments to HME providers are on the hit
list.

The OIG said it will look at:

• Payments for power mobility devices, hospital beds, oxygen
  concentrators and enteral/parenteral nutrition. According to
  the OIG, prior reviews “have identified issues such as Medicare
  payments for DME that was not ordered by physicians, not delivered
  to the beneficiaries, or not needed by beneficiaries.”

• Replacement supplies. The OIG notes preliminary work
  showed “suppliers automatically shipped continuous positive airway
  pressure system and respiratory-assist device supplies when no
  physician order for refills was in effect.”

• Documentation for standard and complex rehab
  wheelchairs “to determine whether the claims were medically
  necessary.”

• Claims with modifiers. Reviews by the DME MACs have
  shown “that suppliers had little or no documentation to support
  their claims,” the OIG said, “suggesting that many of the claims
  submitted may have been invalid and should not have been paid by
  Medicare.”

• The fee schedule for parenteral nutrition. The OIG
  previously found that Medicare allowances for major parenteral
  nutrition codes “averaged 45 percent higher than Medicaid prices,
  78 percent higher than prices available to Medicare risk-contract
  health maintenance organizations and 11 times higher than some
  manufacturers’ contract prices.”

• Payments for home blood glucose test strips and lancet
  supplies.

• Qualifications of orthotists and prosthetists, and payments
  for lower-limb prostheses.

The new targets follow a slew of reports related to HME that
have poured out of the OIG in recent weeks — evidence that
the agency honored its 2010 work plan, which also focused on the
sector.

In September, the OIG reported that CMS shelled out an estimated
$8.2 million worth of Part B payments for equipment and services
for dead Medicare beneficiaries. In a wry note, the report stated:
“Because medically necessary services cannot be provided after a
beneficiary dies, payments for claims with dates of service after a
beneficiary’s death are overpayments.”

In separate reports on three of the four Medicare jurisdictions
— A, B and D — the OIG said that in 2007 the DME MAC
contractors had inappropriately paid about $179 million to
providers who did not have proper documentation on file but who had
used the KX modifier on claims indicating that they did. Another
report found that NHIC might have reimbursed
inappropriate claims for blood glucose test strips to the tune of
$39 million in 2007.

The OIG’s latest reports and its new list of targets come just
as competitive bidding is on track to be implemented Jan. 1 and, at
the same time, just as the agency itself seems more in the
limelight.

Inspector General Daniel R. Levinson was a frequent face on
Capitol Hill last month as he testified before various committees.
Speaking Sept. 22 at a House hearing on Medicare fraud, Levinson
said that the need to strengthen the program’s enrollment standards
could hardly be overstated.

“We need to lock the front door, and the Patient Protection and
Affordable Care Act provides tougher screening methods for Medicare
enrollment that can help with that,” Levinson told the House Energy
and Commerce Subcommittee on Health. “Put simply, criminals who
commit health care fraud are going to be cut off from the Medicare
Trust Fund faster, face longer prison terms and be subject to
larger criminal fines.”

To support his comments, Levinson pulled data from 2006 and 2007
but did not mention new enrollment requirements for HME providers
that include mandatory accreditation and surety bonds (as of
October 2009).

According to the American Association for Homecare’s Michael
Reinemer, “Data from before 2009 is out of date, and citing data
from 2006 or 2007, without any reference to what has happened since
then, is extremely misleading. To muddy the discussion further, OIG
discusses reimbursement rates in the same breath as fraud,
conflating those entirely separate issues. And when OIG’s PR
machine spins this information for the media, the news media
inevitably confuse criminal fraud with reimbursement
issues.” 

The result, said Reinemer, AAHomecare vice president,
communications and policy, is that “the public and policymakers end
up knowing less than they did before because the information is so
mangled.”

HME advocates are hoping, however, that a couple more subjects
on the OIG’s new work list could clear the waters somewhat. In
addition to claims payments, the OIG will scrutinize exactly how
the National Supplier Clearinghouse has been screening and
monitoring enrollees “to identify applicants that pose fraud risks
to Medicare.” Closing the door on the front end is where the focus
should have been all along, AAHomecare and others point out.

Neither does the 2011 work plan skip over the industry’s most
hotly contested topic. As required by law, the OIG will conduct
post-award audits “to assess the process used by CMS for
competitive bidding and subsequent pricing determinations under
Rounds 1 and 2 of the competitive bidding program.”

See the OIG’s entire 2011 work plan at http://www.oig.hhs.gov/publications/workplan/2011/.