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Home Health & Hospice Week

Fraud & Abuse:

OIG Gets Back To Basics In DME Plans

Published on Thu Oct 16, 2003

Inherent reasonableness cuts might not be far behind OIG studies. 

The OIG might not have set out a separate category for power wheelchairs in its latest Work Plan, but suppliers can expect heavy investigative action in that area nonetheless.

The HHS Office of Inspector General designates only three DME-specific areas in its fiscal year 2004 Work Plan, as opposed to five areas last year. But the reduction in DME items doesn't mean there will be a corresponding reduction in OIG scrutiny of the industry, warns attorney Robert Falk with the Washington, DC office of Powell Goldstein Frazer & Murphy.

"I do not see the 'numbers' as any indication of OIG's level of concern at all," Falk tells Eli. The work plan areas "are very focused, indicating that OIG expects to find problems."

The OIG uses the studies in the Work Plan as a "platform for future attacks," either via policy or enforcement, Falk reminds suppliers.

In the plan, the OIG fails to set out a separate category for power wheelchairs, which have been so conspicuously targeted in Operation Wheeler Dealer headed up by the Centers for Medicare & Medicaid Services (see Eli's HCW, Vol. XII, No. 32, p. 251).

But suppliers can expect the OIG to find plenty of ways to incorporate scrutiny of power wheelchairs into its 2004 tasks, experts say. The work plan sets out these project areas:

  • CMNs. Appropriate certificates of medical necessity are an ongoing issue in the Medicare program, and this year is no exception. The OIG plans to determine if suppliers correctly used and maintained CMNs and whether ordered items were reasonable and necessary.

    "An improperly completed CMN can really trip up a supplier in an HME audit," cautions attorney Jeff Baird with Brown & Fortunato in Amarillo, TX. Suppliers with sloppy CMN practices can expect recoupment at best and False Claims Act charges at worst, he says.

  • Medical Necessity. The OIG singles out power wheelchairs and therapeutic footwear for scrutiny in this area, in which it will assess whether suppliers' documentation supports the claim, whether the item was medically necessary and whether the beneficiary actually received the item.

    The OIG and CMS suspect many beneficiaries receiving power wheelchairs don't really need them, says Gabe Imperato with Broad and Cassell in Ft. Lauderdale, FL. Beneficiaries "don't need Cadillacs when a Chevrolet will do," he quips.

    Proving an item's medical necessity can be a resource-intensive process, Baird points out. First suppliers must produce key pieces of documentation: a physician order, CMN, delivery ticket or other proof of delivery, assignment of benefit (AOB) form, and, if necessary, an advance beneficiary notice (ABN).

    After jumping through those hoops, suppliers must produce documentation supporting the actual medical necessity, including physicians' contemporaneous progress notes and perhaps a physical therapy evaluation for a wheelchair, for example, Baird explains.

    "Lack of medical necessity is the primary reason for recoupment," he says.

  • Pricing. Wheelchairs pop up again in the OIG's plans to compare Medicare reimbursement rates for DME items with those of other federal and state health care programs. The OIG also will measure enteral nutrition and oxygen equipment and supplies rates, the Work Plan says.

    If the OIG finds the items overpriced, inherent reasonableness cuts are likely to follow. "Through Operation Wheeler Dealer, CMS already has targeted power wheelchairs for IR reductions," Falk says. "This OIG study could provide partial ammunition for that effort."

  • Drugs. Although not specifically a DME item, the OIG says it will compare Medicare reimbursement for prescription drugs with costs incurred by other payors. Expect respiratory drugs such as albuterol sulfate and ipratroprium bromide to be included in the study, Baird advises.

    Editor's Note: The Work Plan is at www.oig.hhs.gov/publications/workplan.html#1.

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