OIG: No More Identical Claims NPIs

WASHINGTON — Along with the list of items the HHS Office
of Inspector General has said it will examine this year in the DME
sector, its latest report turns attention back to what the OIG
calls a “claims processing vulnerability.”

Issued April 9 as a follow-up to a previous review, the new
report found that Medicare paid $87 million for equipment and
supplies without verifying the presence of a referring physician.
The claims in question, which were paid between May 23,
2008—when a temporary provision took effect allowing
providers to use their own NPI if they cannot get one from the
physician—and Sept. 30, 2009, had identical national provider
identifier (NPI) numbers for both the referring physician and the
DME provider.

The report noted the temporary provision will expire on Jan. 3,
2011 (after two delays, the OIG pointed out), when CMS’ PECOS
edits will be activated. But in the interim, the OIG said it found
that “CMS’ claims-processing systems did not verify
that the equipment and/or supplies associated with these payments
were ordered by an eligible physician as required.“

The report added that payments for claims with identical NPIs
declined over the first seven months after the temporary provision
became effective, but generally increased thereafter.

According to the report, 10 codes out of approximately 1,200
accounted for half of the $87 million that was paid for this type
of claim during the review period. Oxygen concentrators (E1390)
made up the greatest percentage of the payments (10 percent), and
three diabetic shoe insert codes (A5500, A5512 and A5513) accounted
for 22 percent. The list of codes also includes standard power
wheelchairs (K0823) at 4 percent.

In addition, the report said, 10 counties—including the
cities of Los Angeles, Houston and Detroit—represented 19
percent of the payments. In contrast, those counties represented
only 9 percent of Medicare payments for all medical equipment and
supplies provided during the 16-month review.

Overall, more than 13,000 providers were paid for at least one
claim that included identical NPIs. Out of that number, 26 percent
were paid for this type of claim 95 percent of the time.

“These suppliers accounted for almost half (48 percent) of
the Medicare payments we identified,” the OIG said.

The highest amount a provider received for claims with identical
NPIs was $1.6 million, and the average was $6,358. Nine companies,
“none of which appears to be a large, chain-based
supplier,” the report said, received over $500,000 each. Of
those nine providers, five were paid for this type of claim at
least 99 percent of the time with payments totaling over $ 5
million.

The OIG said CMS should end the practice of allowing DME
providers to submit claims without a referring physician’s NPI
“at the earliest date possible while maintaining beneficiary
access to services.”

In March, the OIG recommended that CMS work with Congress to
further reduce the rental period for home oxygen and determine
whether Medicare’s payments for power wheelchairs should be
adjusted Among other items the OIG has said it will examine this
year: payments for hospital beds and enteral/parenteral nutrition;
claims with modifiers; repair and service of capped rental DME; and
DME categorization in the Medicare fee schedule.

The OIG report on claims with identical NPIs is available at
http://www.oig.hhs.gov/oei/reports/oei-04-10-00110.pdf.