WASHINGTON — Along with the list of items the HHS Office of Inspector General has said it will examine this year in the DME sector, its latest report turns attention back to what the OIG calls a “claims processing vulnerability.”
Issued April 9 as a follow-up to a previous review, the new report found that Medicare paid $87 million for equipment and supplies without verifying the presence of a referring physician. The claims in question, which were paid between May 23, 2008—when a temporary provision took effect allowing providers to use their own NPI if they cannot get one from the physician—and Sept. 30, 2009, had identical national provider identifier (NPI) numbers for both the referring physician and the DME provider.
The report noted the temporary provision will expire on Jan. 3, 2011 (after two delays, the OIG pointed out), when CMS’ PECOS edits will be activated. But in the interim, the OIG said it found that “CMS’ claims-processing systems did not verify that the equipment and/or supplies associated with these payments were ordered by an eligible physician as required.“
The report added that payments for claims with identical NPIs declined over the first seven months after the temporary provision became effective, but generally increased thereafter.
According to the report, 10 codes out of approximately 1,200 accounted for half of the $87 million that was paid for this type of claim during the review period. Oxygen concentrators (E1390) made up the greatest percentage of the payments (10 percent), and three diabetic shoe insert codes (A5500, A5512 and A5513) accounted for 22 percent. The list of codes also includes standard power wheelchairs (K0823) at 4 percent.
In addition, the report said, 10 counties—including the cities of Los Angeles, Houston and Detroit—represented 19 percent of the payments. In contrast, those counties represented only 9 percent of Medicare payments for all medical equipment and supplies provided during the 16-month review.
Overall, more than 13,000 providers were paid for at least one claim that included identical NPIs. Out of that number, 26 percent were paid for this type of claim 95 percent of the time.
“These suppliers accounted for almost half (48 percent) of the Medicare payments we identified,” the OIG said.
The highest amount a provider received for claims with identical NPIs was $1.6 million, and the average was $6,358. Nine companies, “none of which appears to be a large, chain-based supplier,” the report said, received over $500,000 each. Of those nine providers, five were paid for this type of claim at least 99 percent of the time with payments totaling over $ 5 million.
The OIG said CMS should end the practice of allowing DME providers to submit claims without a referring physician's NPI “at the earliest date possible while maintaining beneficiary access to services.”
In March, the OIG recommended that CMS work with Congress to further reduce the rental period for home oxygen and determine whether Medicare's payments for power wheelchairs should be adjusted Among other items the OIG has said it will examine this year: payments for hospital beds and enteral/parenteral nutrition; claims with modifiers; repair and service of capped rental DME; and DME categorization in the Medicare fee schedule.
The OIG report on claims with identical NPIs is available at http://www.oig.hhs.gov/oei/reports/oei-04-10-00110.pdf.
