Slight Increase in Improper Payments for DME

WASHINGTON, D.C. (February 4, 2021)—Late last year, the Centers for Medicare & Medicaid Services (CMS) published the 2020 Medicare Fee-For-Service Supplemental Improper Payment Data. This is an annual report published by CMS’s Comprehensive Error Rate Testing (CERT) program that is intended to measure the improper payments made in the Medicare FFS program. The 2020 report reviewed claims from July 2018-June 2019. The reported numbers therefore do not include any claims submitted during the current COVID-19 pandemic.
 
The CERT reports the DMEPOS improper payment is 31.8% which is a 0.8% increase from 2019. Below is a graph showing the published DMEPOS improper payment rates going back to 2003.

 
The CERT report also continues to show that the root cause of the DMEPOS error rate is due to insufficient documentation. Insufficient documentation errors mean claims were either missing or had inadequate orders, plan of care, records, and/or certifications. For the 2020 report, insufficient documentation represented about 65% of the DMEPOS error rate.

As shown in the graph above, medical necessity error represented a small percentage of the DMEPOS error. Other types of errors includes: no documentation, incorrect coding, and other types of errors not specified by the CERT. All this shows that the majority of DMEPOS claims were legitimate, but suppliers did not have adequate documentation.
 
Although the reported error rate for DMEPOS is 31.8%, the error rate varies by product category. Below are the product categories with the highest error rates in the DMEPOS category:

1. Diabetic Shoes-68.2%
2. Lower Limb Orthoses-65.7%
3. Upper Limb Orthoses-42.3%

Similar to previous years, PMD continues to have the lowest error rate. For the 2020 report, PMD error rate dropped from 7% to 4%. This low number is due to PMD’s requirement for prior authorizations.
 
You can find AAHomecare’s analysis of the CERT DMEPOS error rate here. (Excel spreadheet).