GAO Calls for Better Prepayment Controls

Washington

According to the Government Accountability Office, CMS’ DME payment contractors need better prepayment controls to detect questionable claims.

In a recent report, the GAO said the DME Program Safeguard Contractors and Medicare Administrative Contractors responsible for medical review and processing of Medicare claims “did not have sufficient automated prepayment controls to flag claims that are part of unexplained increases in billing, or that were medically improbable.”

CMS estimates Medicare paid $700 million in improper claims for DMEPOS between April 2005 and March 2006.

For example, GAO said the CMS contractors could not “identify questionable claims that were part of an atypically rapid increase in billing” and, in some cases, couldn’t “identify claims for items unlikely to be prescribed in the course of routine quality medical care.”

Due to an absence of such “threshold edits,” the report said, from the first quarter of 2003 through the first quarter of 2005, 225 suppliers increased their billing to Medicare by $500,000 and 50 percent from at least one three-month period to the next.

And from October 2002 through March 2005, Medicare paid over $2 million for beneficiaries’ braces after the program had paid for prosthetics for the same beneficiaries’ legs, feet or ankles.

The GAO recommended that CMS require its contractors to share information with each other to adopt the most cost-effective prepayment controls.

For example, the report pointed out that Medicare could have saved nearly $71 million from January 2003 through June 2005 if all the contractors had adopted one contractor’s control restricting payment for home-use hospital beds to one per month per beneficiary.

“This report underscores the need for Medicare program officials to make sure the contractors are doing their jobs,” said ranking Senate Finance Committee member Chuck Grassley, R-Iowa, who requested the GAO inquiry.

“By proactively identifying suspicious billing, dishonest suppliers can be caught and the fraud stopped before even more money is scammed.

“Most suppliers of medical equipment like leg braces and glucose test strips are honest, but the bad actors cost the program $700 million every year.”