WASHINGTON--The HHS Office of Inspector General plans to keep a close eye on home medical equipment spending next year. In its 2006 Work Plan released Nov. 16, the agency outlined a number of issues related to HME providers that it intends to investigate.

Specific areas the OIG will examine include:

--Durable medical equipment payments for beneficiaries receiving home health services: The OIG will review medical records for items and supplies furnished to beneficiaries to determine whether they were reasonable and necessary.

--Medicare payments for therapeutic footwear: It will determine whether therapeutic footwear furnished by individual suppliers was necessary for beneficiaries.

--Medical necessity of durable medical equipment: It will determine whether Medicare payments for items such as power wheelchairs, wound care equipment and supplies and glucose test strips were appropriate, whether suppliers' documentation supports the claim and if beneficiaries received the item.

--Medicare pricing of equipment and supplies: The OIG will compare Medicare payment rates for certain equipment and supplies--including wheelchairs and those related to parenteral nutrition, wound care and oxygen--with rates of other state and federal health programs as well as wholesale and retail prices.

--Home blood glucose testing supplies: It will assess the appropriateness of Medicare Part B payments made to a supplier for home blood glucose testing supplies, specifically test strips and lancets.

--Medicare drug reimbursement of average sales price: It will evaluate drug manufacturers' methodologies for computing the ASP. The calculation will be used to determine Medicare reimbursement of certain classes of drugs, a new requirement as part of the Medicare Modernization Act.

--Collecting and maintaining average sales price data: The office will evaluate CMS' system for collecting and maintaining ASP data.

--Effectiveness of ASP cost controls: It will examine why reported ASPs are rising, how these increases reflect provider costs and the extent to which these price changes have affected the expected cost reductions of the ASP program.

--Monitoring of market prices for Part B drugs: MMA mandates that the OIG conduct studies, which may include market surveys, to determine widely available market prices for Part B drugs. The market price will then be compared to the ASP. Also, as mandated by MMA, the OIG will compare reported average manufacturer prices to the ASP.

--Duplicate payments for Part B drugs under the competitive acquisition program: The OIG will determine if there are duplicate payments to physicians for Part B drugs purchased from vendors selected through a competitive bidding process and those directly reimbursed under the ASP system.

To view the OIG Work Plan, click here.