Medicare Compliance & Reimbursement

Edits for durable medical equipment claims could get much tougher if the feds listen to a new Senate report.

Medicare may be wasting billions of dollars on DME claims that aren't legitimate, says the report from the Senate's Permanent Subcommittee on Investigations under the Committee on Homeland Security and Governmental Affairs. "Medicare Part B, the component in which Medicare pays for certain durable medical equipment and supplies ... is particularly susceptible to abuse," the report says.

The subcommittee found widespread problems when looking at diagnosis codes for certain DME items.

For example: Committee researchers "re-viewed hundreds of thousands of claims paid by Medicare for blood glucose test strips... and found that many contained questionable diagnoses that appear wholly unrelated to diabetes," the report says. Hundreds of thousands of claims contained diagnoses such as bubonic plague, leprosy, typhoid, and others.

The subcommittee wants the Centers for Medicare & Medicaid Services to toughen up claims review by examining diagnosis codes. "Claims with any invalid or incorrect codes should be rejected and returned to the biller for correction," the report urges.

Other recommendations include linking DME claims to medical claims for the patient as well as linking diagnosis codes with medical procedures.

Supplier reaction: Mainstream press articles in USA Today and other papers focused on the alleged DME billing abuse, not the systemic problems, critics charge.

The report should show "the incompetence of CMS and the failure of Congress to demand that contractors be held accountable," contends the National Association of Independent Medical Suppliers. Instead, "CMS points their finger at DME again despite the fact that the claims were improperly paid by a Medicare contractor who failed to follow their own rules."

"We'll take our share of the responsibility that all providers have a duty to be precise when filling out any claims form," the American Association for Homecare's Tyler Wilson told the Associated Press. "We're concerned about Medicare officials' failure to impose upfront controls to prevent people with no intention of following procedures from getting payment."

CMS says the problem has already been largely solved. "This report highlights a vulnerability that we addressed five years ago related to our review of claims for medical services and supplies," CMS spokesman Jeff Nelligan told the press. CMS has validated diagnosis claims on DME since 2003.

But CMS was making improper payments as recently as 2006, the report charges. At that time, CMS paid more than a half-million dollars for blood glucose test strip claims with COPD as the diagnosis.