Washington

The fiscal 2001 work plan laid out last month by the Office of Inspector General, Department of Health and Human Services, includes a host of projects related to home medical equipment providers.

For the year, which began Oct. 1, the OIG is targeting the following areas:

Medicare Payments for Equipment and Supplies: The OIG will examine Medicare payment rates for a sample of medical equipment and supplies and compare them with the rates of other federal and state health programs, as well as with wholesale and retail prices. It also will compare supplier costs for the items with the Medicare-allowed charges. The plan does not detail which equipment and supplies will be examined.

National Supplier Clearinghouse: The NSC, which was established to certify that durable medical equipment suppliers meet specific standards before receiving Medicare billing numbers, will be assessed on meeting its goals and the accuracy, completeness, accessibility and usefulness of collected data.

Payments for Nebulizer Drugs: The OIG and the Health Care Financing Administration will determine whether DME suppliers submitted proper claims for nebulizer drugs and supplies to the Region C durable medical equipment regional carrier and were reimbursed in accordance with Medicare requirements.

According to the OIG, Medicare payments for nebulizer drugs totaled $486 million in 1998 - an increase of $57 million, or 13.3 percent, over the 1997 total of $429 million. The Region C DMERC accounted for $274 million - 56 percent - of the 1998 total.

Medicaid DME Reimbursement Rates: The OIG will study the extent to which Medicaid payments for DME exceeded allowable Medicare rates. One state's federal share of payments to DME providers has exceeded the allowable rates by $8 million since fiscal 1998, the OIG pointed out. It said the state improperly based the reimbursement rates on the 1993 Medicare fee schedule rather than the Balanced Budget Act of 1997, which significantly reduced Medicare reimbursement. "We will expand our audit work to other states that cite the Medicare fee schedule in their state plans or that have legislation requiring the use of the Medicare fee schedule," the OIG said.

Medicare Part B: In its ongoing attempt to detect fraudulent providers, the OIG will investigate "a broad range of suspected fraud and present cases for both criminal and civil prosecution."

Medicaid Reasonableness Edits: The OIG will examine the adequacy of controls used by state agencies to adjudicate potentially excessive claims submitted by Medicaid providers. "Prior OIG reviews found several instances of excessive payments made by state agencies. These payments occurred because claim processing system edits were not always extensive enough to evaluate the reasonableness of line-item units and charges," the OIG said.

Medicare Part B Payments for DME: This study will focus on the adequacy of DMERC procedures and controls intended to prevent inappropriate Medicare Part B payments for DME to inpatients of skilled nursing facilities. Two previous OIG reports uncovered millions of dollars in improper payments, the OIG said.

Suspension of Payments to Providers: This review will focus on the extent to which Medicare contractors suspended payments to providers in an effort to recoup Medicare money and whether they complied with the rules.

Outpatient Diabetes Self-Management Training Services: In a national study, the OIG will assess "the reasonableness" of Medicare payment rates for outpatient diabetes self-management training services. Prior studies have shown that payment rates to providers offering such programs "appeared to be substantially higher than the actual cost of providing the services," the OIG said. "We will compare payment rates with the costs of providing the services at a selected number of providers throughout the country."