Most errors involved the physician’s order not syncing with local coverage determinations, the supplier not having a proper request, or the supplier not having proof of delivery. The Office of Inspector General recommends Medicare contractors recover the portion of the overpayments within the 4-year reopening period.
A new report issued by the Office of Inspector General (OIG) this month states: “Most Medicare claims that DME suppliers submitted for replacement PAP [positive airway pressure] device supplies did not comply with Medicare requirements.” The audit that resulted in the report entitled “Most Medicare Claims for Replacement Positive Airway Pressure Devices Did Not Comply with Medicare Requirements” was conducted because previous OIG reviews found that Medicare “allows replacement of positive airway pressure (PAP) device supplies more frequently than what is reasonable and necessary and that durable medical equipment (DME) suppliers often do not have the documentation required to support the need for replacement supplies.”
The executive summary states in part:
Of the 110 claims in our sample, 24 complied with Medicare requirements; however, 86 claims with payments totaling $13,414 did not. On the basis of our sample results, we estimated that Medicare made overpayments of almost $631.3 million for replacement PAP device supply claims that did not meet Medicare requirements.
These overpayments occurred because CMS oversight of replacement PAP device supplies was not sufficient to ensure that suppliers complied with Medicare requirements or to prevent payment of claims that did not meet those requirements. Without periodic reviews of claims for replacement supplies, Medicare contractors were unable to identify suppliers that consistently billed claims that did not meet Medicare requirements or to take remedial action.
The No. 1 error cited in the report (responsible for 53 errors) was that the physician’s orders were not in accordance with local coverage determinations (LCDs). More specifically, that typically meant the written order didn’t contain all of the required elements (which include the beneficiary’s and physician’s names, the date of the order, a detailed description of the items to be dispensed, the quantity to be dispensed, the frequency of use, and the number of refills), the supplier didn’t obtain a detailed written order before billing Medicare, the order didn’t contain at least one of the supplies on the claim, or the supplier didn’t obtain a new order after a change of supplier. “These orders often contained multiple supplies that were contradictory, such as more than one type of mask; did not indicate which specific supplies the physician was ordering; or were missing the frequency or duration of use,” the report states.
The No. 2 error cited is that the supplier didn’t have a proper request for replacement supplies (which the OIG places into the larger category of “replacement supplies were not reasonable or necessary”). “Specifically, (1) there was no evidence that the beneficiary had requested the supplies, (2) the supplier did not determine the functional condition of the beneficiary’s current supplies before sending replacement supplies, or (3) the supplier’s contact with the beneficiary occurred more than 14 days before sending replacement supplies,” according to the report.
The No. 3 error cited is that the supplier had no proof of delivery. “Most often the suppliers’ delivery documentation did not contain all of the applicable required elements, such as the shipping service’s package identification information and confirmation of delivery,” the report states.
The OIG recommendations makes the following recommendations to CMS:
- instruct the Medicare contractors to recover the portion of the overpayments of $13,414 associated with the 86 sample claims that are within the 4-year reopening period;
- work with Medicare contractors to establish periodic reviews of claims for replacement PAP device supplies and take remedial action for suppliers that the contractors find consistently bill claims that do not meet Medicare requirements, which could have saved Medicare an estimated $631,272,181 over a 2-year period; and
- instruct the Medicare contractors to notify 82 suppliers, associated with 86 claims with potential overpayments of $13,414, to exercise reasonable diligence to investigate and return any identified overpayments, in accordance with the 60-day rule, and to identify and track any returned overpayments as having been made in accordance with this recommendation.