Medicare Compliance & Reimbursement

Federal watchdog agency will investigate 20 different DME topics this year

Poor documentation could be DME suppliers' downfall when the OIG comes knocking in 2009.

The HHS Office of Inspector General lists a whopping 20 durable medical equipment areas it will investigate this coming year. Many of those investigations will involve claims reviews to determine medical necessity for DME items.

Power wheelchairs, scooters, hospital beds, oxygen concentrators, enteral nutrition, CPAPs, test strips, support surfaces, negative wound pressure therapy pumps, and more are on the slate for scrutiny, according to the OIG's Work Plan for 2009.

The Centers for Medicare & Medicaid Services' documentation requirements are confusing, maintains Eric Sokol with the Power Mobility Coalition. Recent government reports have shown that CMS and its contractors sometimes have different standards.

Suppliers want to see clearer documentation guidelines, Sokol tells MCR. "We are certainly looking for some objective criteria," he says.

Problem: If the ordering physician doesn't supply medical necessity documentation, it's the supplier who
is on the hook for payment, notes attorney Seth Lundy with King & Spalding in Washington, D.C. And securing the correct documentation from physicians after the fact can be very costly.

Solution: Between the OIG's full slate of DME investigations and CMS' recently announced fraud crackdown on DME, "suppliers will have to put in efforts to maintain documentation to defend against audits," Lundy counsels. That may mean extra work now to avoid huge pitfalls down the road.
In addition to equipment type, the OIG will also single out claims that use modifiers for review, the Work Plan says. Suppliers are responsible for understanding how to use modifiers and diagnosis codes correctly on their claims, Lundy says.

HHA, Nursing Home Interactions Studied
Six of the 20 DME topics the OIG will pursue also involve other provider types. Two areas relate to home health agencies -- "Durable Medical Equipment Payments for Beneficiaries Receiving Home Health Services" and "Payments to Medical Suppliers and Home Health Agencies Associated With 'Currently Not Collectible' Overpayments." And four involve nursing homes, focusing on nutrition services and products.
The OIG may be in for a surprise when it conducts its investigation into "Supplier Purchase Prices for Power Wheelchairs in the Medicare Program," Sokol expects. "Profit margins will probably not be as big as they think," he says. The OIG might have trouble getting accurate purchase price information from suppliers, since those negotiations are closely guarded.

More scrutiny ahead: Suppliers had better get used to this high level of scrutiny, advises attorney Jeffrey Baird with Brown & Fortunato in Amarillo, Texas. The OIG Work Plan has five pages of DME investigation topics, which is exceeded only by hospital topics, Baird notes.

"The industry remains front and center on the OIG's radar screen" despite its relatively small size and share of Medicare reimbursement, Baird says. That's because given population demographics and baby boomers' lifestyle preference to stay at home, use of DME is sure to escalate.

"The OIG is trying to get its arms around the industry," Baird believes. "To accomplish this, the OIG will continue to focus on all aspects of the DME industry."

End in sight: Once suppliers are subject to the same types of licensing, accreditation, and quality standards that other providers like hospitals, physicians, and pharmacies must face, the regulators will let up on the industry, Baird predicts. n
Note: The OIG Work Plan is at http://oig.hhs.gov/publications/docs/workplan/2009/WorkPlanFY2009.pdf.