New Audits Coming for Home Oxygen, PAP, DME Rentals, More

WASHINGTON—The Centers for Medicare & Medicaid Services (CMS) officially approved five durable medical equipment, prosthetics and orthotics supplies (DMEPOS)-related audit projects under the new Medicare Recovery Audit Contractor (RAC), Cotiviti GOV Services, LLC, marking the contractor’s first time overseeing Medicare DMEPOS RAC reviews. 

The new projects include:

• Immunosuppressive Drugs: Medical Necessity & Documentation Requirements—A complex review to determine if the submitted documentation supports Medicare’s coverage criteria and reasonable and necessary requirements.
   
• Home Use of Oxygen: Medical Necessity & Documentation Requirements—A complex review to determine if home oxygen meets coverage criteria and is medically reasonable and necessary.
   
• Durable Medical Equipment Rentals: Multiple Billing Within the Same Month—An automated review of overpayments associated to DMEPOS suppliers billing multiple rentals for the same equipment within the same month (27 days) will be recovered.
   
• Positive Airway Pressure Devices for Treatment of Obstructive Sleep Apnea: Medical Necessity and Documentation Requirements—A complex review to determine if a positive airway pressure device is reasonable and necessary for the patient’s condition based on the documentation in the medical record.
   
• Ventilators: Medical Necessity & Documentation Requirements—A complex review to determine if ventilators meet coverage criteria and/or are medically reasonable and necessary.
   

For complex reviews, suppliers will receive audit requests and must respond with supporting documentation. For automated reviews, the RAC will conduct data analysis without requiring supplier involvement.

Cotiviti was awarded the RAC contract for Region 5 in April 2025, becoming the first new Medicare DMEPOS RAC contractor in nearly a decade. Following the announcement, AAHomecare had an introductory meeting with Cotiviti and CMS’s RAC oversight team to share supplier perspectives and to establish an open line of communication as Cotiviti begins rolling out its contract. During the meeting, Cotiviti said it intends to take a measured approach to implementation, assuring that it will ramp up audit activities slowly rather than launching widespread reviews immediately.

According to Cotiviti, the five approved DMEPOS audit projects were selected after a data-driven review and approval by CMS. 

“While Cotiviti has significant experience auditing DMEPOS claims on the Medicaid side, Medicare RAC reviews will introduce new complexities, including distinct coverage rules, medical necessity criteria, and documentation standards,” AAHomecare said.