Compliance:
Suppliers Face Reduced Payment, Denied Claims Under OIG Scrutiny
Published on Fri Oct 15, 2004
Wheelchairs remain a compliance pressure point, OIG work plan indicates. The HHS Office of Inspector General is attacking durable medical equipment suppliers where they live - on pricing and coverage issues.
The OIG has abandoned its MO of isolating individual suppliers for fraud scrutiny, believes attorney Seth Lundy with Fulbright & Jaworski in Washington, DC. Instead, it and other federal agencies are approaching industry-wide enforcement by reducing Medicare payments, denying more claims in medical review and "aggressively weeding out suppliers" with a tougher enrollment process, including supplier standard enforcement, Lundy says.
The OIG work plan for fiscal year 2005 is no exception to this policy. The OIG has only two work plan items specifically targeted at DME suppliers, but those items are "broad in scope and have a huge potential impact on how suppliers do business," says Erik Sokol with the Power Mobility Coalition.
First, the OIG says it will examine medical necessity for DME items including power wheelchairs and therapeutic footwear. Secondly, the OIG says it will compare Medicare prices for DME items including wheelchairs, enteral nutrition and oxygen equipment and supplies against rates paid by other payors.
These are two of the most relevant issues for suppliers, Sokol insists - who suppliers can serve and how much they are paid. "Program efforts to reduce expenditures and shut down suppliers appear to be as vigorous as ever," Lundy warns.
And wheelchairs are smack dab in the middle of both OIG initiatives, points out attorney John Wester with Sidley Austin Brown & Wood in Washington, DC. The medical necessity study especially "reflects continuing concern regarding potential abuses of power wheelchair claims," Wester tells Eli.
The watchdog agency wants to look at wheelchair medical necessity because the DME regional carriers have issued so many denials for the products, suspects attorney Robert Falk with Powell Goldstein in Washington, DC. But it is the Centers for Medicare & Medicaid Services' wheelchair policy's lack of clarity that is at the root of the denials, not actual medical necessity problems, Falk argues.
CMS has failed to clearly articulate its wheelchair coverage policy, especially regarding key items like the definition of non-ambulatory, Falk maintains. Aggressive DME regional carrier audits under Operation Wheeler Dealer have amplified the problem. Bidding on the Horizon Motivates Pricing Strategies The pricing study focuses squarely on items expected to be first up for competitive bidding, Falk notes. The OIG wants to beef up its database of pricing for these items, Wester says.
The feds want to ratchet down reimbursement for bidding items so starting bid prices will be lower when the program starts in 2007, Sokol believes.
Meanwhile, the OIG will be studying whether cuts to oncology drugs will leave reimbursement adequate for the Part B-covered items. But a similar study [...]
