Medicare Compliance & Reimbursement

Equipment payments for nursing home patients not in Part A stays to get tougher.

Medicare is paying unnecessary millions for ineligible durable medical equipment for nursing home patients, and it intends to crack down on the problem, according to a new report.

In 2006, Medicare paid nearly $42 million for DME that wasn't allowed because the beneficiaries weren't under Medicare Part A stays in a nursing home, says the HHS Office of Inspector General.

Background: For Medicare to pay for the equipment, the patient must be in a Part Astay (first 100 days) or the nursing home must qualify as the patient's home under Part B. Most nursing homes don't qualify as a patient's home because they provide primarily skilled care, the OIG explains.

To avoid future overpayments, the OIG wants the Centers for Medicare & Medicaid Services to "routinely identify non-Part A beneficiary nursing home stays," it says.

CMS agrees and plans to use Recovery Audit Contractors (RACs) to do the job, it says in its comments on the OIG report. "CMS will seek to provide [RACs] access to the MDS data for the purpose of periodically checking whether beneficiaries who received Part B DME services were residents of nursing homes that do not qualify as a beneficiary's home," the agency says.

CMS also thinks it's a good idea to take the OIG's recommendations on recouping the $42 million identified in the report.

CMS wasn't as enthusiastic about the OIG's ideas to collect DME rental information on the nursing home resident assessment. While collecting the data is a good idea, the assessment is a chiefly clinical tool that isn't suited to that purpose, CMS maintains. Instead, a claims edit should target the problem, the agency suggests. CMS also shoots down the OIG's suggestion to collect information on whether a nursing home would qualify as a patient's home in the OSCAR system. That system is based on facility -- not beneficiary -- data, CMS maintains. Again, a claims processing edit might serve the same purpose, the agency says.