OIG Scrutinizes DME Repair Claims

WASHINGTON — From 2006 to 2008, Medicare paid out $6.6
million for maintenance and repairs of capped rental DME that it
shouldn’t have, according to an Aug. 9 report from HHS’ Office of
Inspector General.

The report also said that of the $90 million in capped rental
repair claims allowed in 2007, $56 million was for claims that were
either lacking documentation or were questionable.

In its report, the OIG found that during the study period:

• Medicare erroneously allowed 31,939 maintenance and servicing
  claims amounting to $2.2 million for routine maintenance and
  servicing of capped rental DME with rental periods after
  implementation of the Deficit Reduction Act. That law, the OIG
  said, “effectively eliminated routine maintenance and servicing for
  beneficiary-owned DME with rental periods that began after Jan. 1,
  2006.”

  Eighty-four percent of the erroneous claims were from five
  categories, the OIG said, including nebulizers (14,420), CPAP
  devices (5,378), hospital beds (3,540), standard wheelchairs
  (2,111), and elevating leg rests for wheelchairs (1,377).

• Medicare erroneously allowed 40,452 claims of nearly $4.4
  million for repairs of beneficiary-rented capped rental DME. “The
  costs of repairs are already included in the monthly rental
  payments to suppliers,” the OIG said. These erroneous claims most
  commonly included CPAP devices (12,215), nebulizers (11,489),
  infusion pumps (5,531), standard wheelchairs (3,770) and hospital
  beds (2,573), together making up 88 percent of such claims.

• Of the $90 million allowed for capped rental DME repairs in
  2007, nearly $27 million was for claims with missing documentation
  or for equipment still under warranty, and $29 million was for
  claims that were questionable because of missing or invalid serial
  numbers, or because of the high-dollar amounts for repairs relative
  to replacement costs. Those claims, the OIG said, “represent 49
  percent of all allowed claims for repair of capped rental DME in
  2007.”

  In addition, the OIG said when it interviewed beneficiaries
  whose equipment had high-cost repairs, some reported that suppliers
  didn’t customize their power mobility devices properly and others
  didn’t offer loaner equipment, “leaving some beneficiaries
  immobile.” Other beneficiaries reported that suppliers failed to
  provide instruction about the proper use of their equipment, the
  report said.

The OIG recommended that CMS implement system edits to deny all
routine maintenance and servicing and repair claims for
beneficiary-rented capped DME claims, improve the enforcement of
payment requirements and consider requiring Medicare Administrative
Contractors to track repair costs for capped rental DME. The OIG
also said CMS should “implement safeguards to ensure that
beneficiaries have access to the services they require,” suggesting
that CMS “could promote access to suppliers through resources such
as a listing of capped rental DME suppliers that provide
high-quality services integrated with a listing of suppliers that
routinely accept assignment.”

The OIG said CMS “responded positively” to all of the
recommendations, noting that it had implemented system edits in
2007 to deny routine maintenance and servicing and repair claims
for capped rental DME, paying claims only for beneficiary-owned
capped rental items.

The OIG report is available at http://oig.hhs.gov/oei/reports/oei-07-08-00550.pdf.