AAHomecare Refutes Report Findings Washington Documentation errors represented the most pervasive problem in improper Medicare benefit payments in fiscal 1999, with home medical equipment suppliers accounting for $1.6 billion of the total $5.5 billion in such errors, according to a report from the Department of Health and Human Services' Office of Inspector General.

For the fourth year in a row, the OIG conducted a review that examined the extent of fee-for-service payments that did not comply with Medicare regulations. A survey of 5,223 claims valued at $5.4 million revealed that 1,034 claims did not comply with Medicare laws. Based on this sample, the OIG estimated that improper payments during FY99 totaled $13.5 billion, or approximately 7.97 percent of the $169.5 billion in payments reported by the Health Care Financing Administration.

"These improper payments could range from inadvertent mistakes to outright fraud and abuse," the OIG stated in the report. "The overwhelming majority (92 percent) of these improper payments were detected through medical record reviews coordinated by the OIG."

While this year's estimate is about $1 billion more than FY98's, it is less than FY97's by $6.8 billion and less than FY96's by $9.7 billion. In the report, the OIG conceded "the increase this year may be due to sampling variability; that is, selecting different claims with different dollar values and errors will inevitably produce a different estimate of improper payments."

The OIG commended HCFA for its "continued vigilance in monitoring the error rate and developing appropriate corrective measures," adding that a majority of health careproviders submitted claims for services that were billed correctly, documented properly and medically necessary. Along those lines, more than 90 percent of Medicare payments in FY99 were estimated to be correct.

"This is a very positive reflection, in our opinion, on the due diligence of the health care provider community to comply with Medicare reimbursement requirements," the OIG said.

The OIG, however, expressed concern about continuing problems with provider documentation, noting that documentation problems increased by $3.4 billion compared with the previous year. This increase, according to the report, was primarily attributable to three provider groups: home health agencies, physicians and HME suppliers.

However, the findings might not paint a true picture of fraudulent reimbursement in the home health and HME industries, according to officials with the American Association for Homecare, because the audit didn't distinguish between inadvertent billing mistakes and outright fraud.

"The report states that claims were included within the error rate because they could not be properly documented," said Asela Cuervo, vice president of government relations for AAHomecare. "Documentation errors alone do not support a conclusion that the claims were the result of fraud and abuse."

To access the full OIG report, go to www.hhs.gov/progorg/oas/reports/afma/a9901999.pdf on the Internet. -J.P.P.

Washington While the Durable Medical Equipment Regional Carriers are meeting most of the Health Care Financing Administration's objectives, they need to improve-particularly in measuring their overall fraud-fighting effectiveness, according to a new report from the Department of Health and Human Services' Office of Inspector General.

The report, Durable Medical Equipment Regional Carriers: Meeting HCFA's Objectives, found that the DMERCs reduced claims-processing costs by 15 percent and successfully established medical policies defining how the 95 durable medical equipment and prosthetics and orthotics supplies that had the highest allowed charges were to be paid.

The report also found that the DMERCs' attack on fraud was potent in specific cases, but a lack of information by the DMERCs prevented the OIG from determining the overall effectiveness of fraud-fighting activities.

"While we obtained some workload data that quantifies their fraud efforts, the DMERCs did not provide needed data that documented the quality and result of their efforts," the OIG stated in the report. To remedy this, the OIG suggested that HCFA require the DMERCs to record such information and incorporate it into its automated management system.

For a complete copy of the OIG report, visit the OIG's Web site at www.dhhs.gov/progorg/oei/whatsnew.html. -J.P.P.