OIG Takes Issue with DME Error Rate

WASHINGTON–A new audit report from the Department of Health and
Human Services’ Office of Inspector General throws into
question the accuracy of the 2008 DME error rate claimed by the
Centers for Medicare and Medicaid Services.
 
According to the new OIG report, a review of 250 sampled claims
showed 175 to be in error—far beyond the 23 errors claimed by
the contractor that conducts comprehensive error rate testing for
CMS.
 
Palmetto GBA, which conducted the review, said the majority of the
claims lacked sufficient documentation of medical necessity. The
CERT contractor agreed with Palmetto’s assessment of only 17
of those claims, in addition to the original 23.
 
The OIG, however, said that the results of the review cast a shadow
on the accuracy of the error rate.
 
“Palmetto’s results did not provide assurance that the
FY 2008 DME error rate was accurate. The CERT contractor’s
failure to identify 17 errors and its use of limited medical
records to infer medical necessity, which was inconsistent with the
methodology used by Palmetto and other DME medical review
contractors, cast doubt on the accuracy of the FY 2008 DME error
rate,” the OIG said.
 
The agency recommended that the CERT contractor develop a
corrective action plan to reduce its number of incorrect
determinations and perform a complex medical review by obtaining
and reviewing all medical records from all relevant providers to
support the medical necessity of DME items.
 
CMS concurred with the OIG’s findings and said it had
“made significant changes to how it measures the error rate,
and, in addition, has clarified its medical review instructions for
all contractors.”
 
CMS also said the CERT contractor had already “implemented an
internal quality review of DME claims included in the 2009 improper
payment report period.” As well, CMS said, the CERT
contractor will re-evaluate DME claims for the fiscal year 2009
report.