Home Health & Hospice Week

Diabetic supplies firm owes whopping $8 million, feds say.

Let a new report from the HHS Office of Inspector General be a warning if you bill Medicare for diabetic supplies: Without careful documentation to back up your claims, the feds could demand millions in overpayments.

That's the reality now facing iCare Medical Supply of Jupiter, FL. An OIG audit of iCare's claims from 2002 and 2003 concludes that the firm did not claim reimbursement for test strips and lancets according to Medicare requirements. As a result, Medicare is seeking to recoup overpayments of more than $8 million.

Findings: The OIG auditors reviewed claims for a sample of 100 beneficiaries, finding at least one error on each service line item on each claim.

"These errors occurred because iCare did not have adequate controls to ensure that test strips and lancets billed to Medicare were medically necessary and documented in accordance with Medicare requirements," the OIG says in its executive summary of the report.

Worse yet: The OIG projects the findings from the 100-claim sample to all claims in 2002 and 2003, concluding that at least $8,233,476 of the $8,664,874 paid to iCare for test strips and lancets ...was unallowable for Medicare reimbursement."

Expect More Scrutiny

Federal officials have been looking at diabetic supply companies for a number of years, says attorney Gabe Imperato of Broad & Cassel--and the scrutiny is likely to pick up in 2008 and 2009.

"You can't play fast and loose and expect to be safe," Imperato tells Eli.

"Suppliers of diabetic supplies--from national mail-order companies to small pharmacies--really need to improve how they are documenting medical necessity," stresses Jane Bunch of Jane's Healthcare Consulting in Marietta, GA..

For more information: To see the full report, "Review of Medicare Payments to iCare Medical Supply for Home Blood-Glucose Test Strip and Lancet Supplies" (A-09-05-00063), go to http://oig.hhs.gov/oas/oas/cms.html.