WASHINGTON--In a 94-page document issued last week, the HHS Office of Inspector General outlined its work plan for 2007 and said it will look into a number of aspects of Medicare and Medicaid programs related to DME.

The OIG said the wok plan projects best identify "vulnerabilities" in the HHS programs. After its investigations, the OIG will make recommendations for improvements.

The OIG said it will examine the following areas this year:

--DME payments for beneficiaries receiving home health services: The OIG will review medical records for DME items and supplies furnished to beneficiaries receiving HHA services to determine whether the items and supplies were reasonable and necessary for the beneficiaries' conditions.

--Medicare payments for therapeutic footwear: The OIG will determine whether therapeutic footwear furnished by individual suppliers was reasonable and necessary for the beneficiaries to whom it was provided. Medicare payments for therapeutic footwear totaled more than $130 million in 2003. A previous OIG report indicated that a significant percentage of payments made for therapeutic footwear did not have adequate documentation to support the beneficiaries' medical need for the footwear.

--Medicare payments for DME Claims with ZX, KX, and KS modifiers: The OIG will determine whether DME suppliers that filed claims with ZX, KX, and KS modifiers appropriately billed Medicare. Under the Medicare program, a DME supplier may use these modifiers to indicate that it has the appropriate documentation on file; upon request, the supplier will provide the documentation to support its claim for payment. Reviews by several CMS DME regional carriers of suppliers who had used the ZX, KX, and KS modifiers found that suppliers had little or no documentation to support their claims. This suggests that many of the claims submitted may have been invalid and should not have been paid by Medicare.

--Medical necessity of DME: The OIG will determine the appropriateness of Medicare payments for certain DME items, such as power wheelchairs, wound care equipment, and supplies or orthotics. It will assess whether the suppliers' documentation supports the claim, whether the item was medically necessary and/or whether the beneficiary actually received the item.

--Medicare pricing of equipment and supplies: The OIG will compare Medicare payment rates for certain medical equipment and supplies with the rates of other federal and state health care programs, as well as with wholesale and retail prices. Its review will cover such items as wheelchairs, parenteral nutrition, wound care equipment and supplies, and oxygen equipment and supplies.

--Billing for DME in hurricane-affected areas: The OIG will examine payments for DME supplies and equipment in the areas affected by the recent hurricanes. According to DMERC officials, suppliers in the hurricane-affected areas were not to bill for equipment until they could make contact with the beneficiary to be sure the equipment was still medically necessary and that the beneficiary had the equipment in use.

To review the OIG's full work plan, click here.