OIG Releases 2006 Work Plan

WASHINGTON–The HHS Office of Inspector General plans to keep a
close eye on home medical equipment spending next year. In its 2006
Work Plan released Nov. 16, the agency outlined a number of issues
related to HME providers that it intends to investigate.

Specific areas the OIG will examine include:

—Durable medical equipment payments for beneficiaries receiving
home health services: The OIG will review medical records for
items and supplies furnished to beneficiaries to determine whether
they were reasonable and necessary.

—Medicare payments for therapeutic footwear: It will
determine whether therapeutic footwear furnished by individual
suppliers was necessary for beneficiaries.

—Medical necessity of durable medical equipment: It will
determine whether Medicare payments for items such as power
wheelchairs, wound care equipment and supplies and glucose test
strips were appropriate, whether suppliers’ documentation
supports the claim and if beneficiaries received the item.

—Medicare pricing of equipment and supplies: The OIG will
compare Medicare payment rates for certain equipment and
supplies–including wheelchairs and those related to parenteral
nutrition, wound care and oxygen–with rates of other state and
federal health programs as well as wholesale and retail prices.

—Home blood glucose testing supplies: It will assess the
appropriateness of Medicare Part B payments made to a supplier for
home blood glucose testing supplies, specifically test strips and
lancets.

—Medicare drug reimbursement of average sales price: It
will evaluate drug manufacturers’ methodologies for computing
the ASP. The calculation will be used to determine Medicare
reimbursement of certain classes of drugs, a new requirement as
part of the Medicare Modernization Act.

—Collecting and maintaining average sales price data: The
office will evaluate CMS’ system for collecting and
maintaining ASP data.

—Effectiveness of ASP cost controls: It will examine why
reported ASPs are rising, how these increases reflect provider
costs and the extent to which these price changes have affected the
expected cost reductions of the ASP program.

—Monitoring of market prices for Part B drugs: MMA mandates
that the OIG conduct studies, which may include market surveys, to
determine widely available market prices for Part B drugs. The
market price will then be compared to the ASP. Also, as mandated by
MMA, the OIG will compare reported average manufacturer prices to
the ASP.

—Duplicate payments for Part B drugs under the competitive
acquisition program: The OIG will determine if there are
duplicate payments to physicians for Part B drugs purchased from
vendors selected through a competitive bidding process and those
directly reimbursed under the ASP system.

To view the OIG Work Plan, click
here.