October 201 1 Health Care Bulletin OIG WORK PLAN 2012: DURABLE MEDICAL EQUIPMENT, PROSTHETICS, ORTHOTICS AND SUPPLIES By: W. Clifford Mull On October 5, 2011, the U.S. guidelines for refilling blood glucose Third, the OIG will compare the Department of Health and Human testing supplies. The OIG has been DMEPOS suppliers’ acquisition costs for Services Office of Inspector General conducting a similar review of claims for support surfaces to Medicare’s payment (“OIG”) released its Work Plan for the other frequently replaced DME supplies. rates for these items. This review is in fiscal year 2012. The Work Plan addition to the OIG’s ongoing initiatives The requirements for glucose testing describes the OIG’s new and ongoing comparing acquisition costs to supplies and other frequently replaced initiatives for the upcoming fiscal year. Medicare’s payment rates for pre- DME supplies are set forth in the Typically, these initiatives focus on areas fabricated lumbar supports (HCPCS Medicare Claims Processing Manual that have been recent problem areas for L6031) and parenteral nutrition. OIG’s (Ch. 20, Section 200), the Medicare the OIG. Several of the OIG’s new and lumbar support investigation has Program Integrity Manually (Ch. 4, ongoing initiatives are of particular revealed that supplier’s acquisition cost Section 4.26.1), and local coverage interest to Durable Medical Equipment, for lumbar supports and the online retail decisions. A supplier may not refill Prosthetics, Orthotics and Supplies price for similar items are significantly frequently replaced DME supplies (“DMEPOS”) suppliers. lower than Medicare’s payment rates for without first contacting the beneficiary lumbar supports. Similarly, the OIG to verify that a refill is necessary and to New Initiatives preliminary investigation of the various obtain the beneficiary’s or caregiver’s The OIG identified four new initiatives payor’s reimbursement rates for request for a refill. Furthermore, a with respect to DMEPOS for fiscal year parenteral nutrition has revealed that supplier may not obtain advanced 2012. First, the OIG will review Medicare’s reimbursement rate was an authorizations from beneficiaries for Medicare claims for diabetic testing average higher than other payors, routine dispensing of refills. Instead, a supplies to verify questionable billing including Medicaid (45% higher) and supplier should contact a beneficiary no and other characteristics indicative of Medicare managed care plans (78% sooner than seven days prior to shipping fraud, waste, and abuse. DMEPOS higher). the refills. suppliers should ensure that they If the OIG concludes that the difference However, the OIG previously maintain documentation supporting that between the acquisition cost and determined that payments had been all claims for diabetic testing supply payment rate for an item is excessive, made to multiple suppliers for supplies claims and other DMEPOS meet all then the Medicare payment rates for the dispensed to the same beneficiary with coverage, coding and medical necessity item may be reduced by the Centers for overlapping service dates. A DMEPOS requirements. Medicare and Medicaid Services (CMS). supplier, therefore, should implement Second, the OIG will review how well Although the payment rates for any item safeguards to determine whether a the DME Medicare Administrative may be reduced at anytime, DMEPOS beneficiary has exhausted any supplies Contractors’ claim processing controls suppliers should pay particular attention furnished not only by the supplier, but prevent payments to multiple suppliers to items with Medicare payment rates any other DMEPOS supplier, before of home blood glucose testing supplies. that are significantly higher than the furnishing a beneficiary refills for These controls should monitor suppliers’ supplier’s acquisition cost or amounts frequently replaced DME supplies. compliance with the published paid by other governmental or private
HEAL TH CARE Bulletin October 201 1 payors when conducting long term brands or modes of delivery and the beneficiary. Lastly, the OIG will financial planning because such items investigate changes in billing patterns review select claims submitted with will be subject to a higher level of arising from implementation of the modifiers indicating that the supplier has scrutiny. program. The results of the OIG review the documentation to support their will be of great interest to opponents of claims for required for payment on file Finally, the OIG will start a new the program and suppliers that were not to verify that the supplier do in fact initiative to review the use of surety awarded a contract under the program. have the documentation on file that bonds to recover overpayments. Most supports their claims. A supplier should DMEPOS suppliers are required to Second, the OIG also has two long- not submit a claim requiring a modifier obtain and maintain a surety bond in an standing initiatives aimed at ensuring unless the required documentation is on amount of no less than $50,000. The that DMEPOS suppliers are properly file. surety bond was meant to not only enrolled and qualified as DMEPOS ensure the recoupment of at least a suppliers. The OIG has been reviewing portion of any overpayment to a and assessing Medicare contractors Additional Information supplier, but also help make sure that enrollment-screening mechanisms and The Benesch Health Care Practice Group regularly counsels clients on only legitimate suppliers are enrolled in post-enrollment monitoring to compliance with Medicare supplier Medicare because “illegitimate” suppliers determine how well the contractors standards, coverage and reimbursement are less likely to qualify financially to identify enrollees who pose fraud risks or requirements, and enrollment. If you obtain a surety bond. The OIG will omitted information on their enrollment have any questions regarding the issues presented in this article or if the determine the amount of overpayments applications. As with all submissions to Benesch Health Care Practice Group recouped through collection of surety CMS, it is imperative that DMEPOS could otherwise be of assistance, please bonds and identify any barriers to suppliers completely and accurately fill contact: collecting surety bonds. If an out their enrollment applications. W. Clifford Mull at 216.363.4198 or insignificant amount has been recouped cmull@beneschlaw.com In a related initiative, the OIG is through surety bonds or there are reviewing the qualifications of certain significant barriers to collecting the www.beneschlaw.com providers submitting claims for custom- surety bonds, then this initiative may fabricated orthotic or prosthetic devices. serve as a basis to amending or repealing The OIG will determine to what extent As a reminder, this Advisory is being sent to draw your attention a requirement viewed by many to issues and is not to replace legal counseling. CMS oversees credentialing of orthotists DMEPOS suppliers as an unnecessary UNITED ST A TES TREASURY DEP ARTMENT and prosthetists or has provided CIRCULAR 230 DISCLOSURE: TO ENSURE expense. guidance to State licensing boards and COMPLIANCE WITH REQUIREMENTS IMPOSED BY THE IRS, WE INFORM YOU the industry regarding what is a Ongoing Initiatives THA T , UNLESS EXPRESSL Y ST A TED “qualified practitioner” of orthotics and OTHERWISE, ANY U.S. FEDERAL T AX The OIG will continue several ongoing prosthetics. Orthotists and prosthetists ADVICE CONT AINED IN THIS initiatives involving the competitive COMMUNICA TION (INCLUDING ANY should review State licensure bidding program, enrollment and A TT ACHMENTS) IS NOT INTENDED OR requirements to verify that they are in WRITTEN TO BE USED, AND CANNOT BE qualifications of DMEPOS suppliers, and compliance with the requirements in USED, FOR THE PURPOSE OF (i) A VOIDING payments by Medicare. PENAL TIES UNDER THE INTERNAL their state and that they are in fact a REVENUE CODE, OR (ii) PROMOTING , First, the OIG is currently conducting qualified practitioner of orthotics or MARKETING OR RECOMMENDING TO two congressionally mandated initiatives ANOTHER P ARTY ANY TRANSACTION OR prosthetics. MA TTER ADDRESSED HEREIN. regarding the DMEPOS competitive Finally, the OIG will continue reviewing bidding program. The statutory the appropriateness of Medicare mandate to review the program was due payments for various categories of to the well-documented issues that durable medical equipment, payment of occurred during the first time Round 1 frequently replaced DME supplies, and of the program was bid in 2009 and payment of claims submitted with which resulted in Round 1 being delayed modifiers. The OIG will be identifying and then opened for rebidding by suppliers in select geographic areas that Congress. The OIG is required to have high-volume claims and review the procedures by which CMS reimbursement for specified items, conducted the competitive bidding and including power mobility devices, pricing determinations during the first hospital beds, oxygen concentrators and round and second round (which has yet nutrition. As in the past, the focus of to take place). Additionally, the OIG the review will be on durable medical will interview prescribing physicians to equipment and supplies that were not assess whether suppliers awarded ordered by physicians, not delivered to contracts under the program solicit the beneficiaries, or were not needed by physicians to prescribe more profitable
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