HHS-OIG Alleges that 70% of the Medicare Claims Recently Audited for Home Blood-Glucose Test Strips and Lancets Were Improperly Paid by the MAC for Jurisdiction A

(September 6, 2010):  HHS-OIG recently issued its audit findings examining Home Blood-Glucose Test Strips and Lancets paid by the Durable Medical Equipment (DME) Medicare Administrative Contractor (MAC) responsible for claims in Jurisdiction A (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont and Washington DC).  As the audit report reflects, 70 of the 100 sampled claims examined contained or more documentation deficiencies.  Specific problems identified include:

•  The quantity of blood-glucose strips and / or lancets utilized which exceeded utilization guidelines failed to properly document the reasons why additional supplies were needed. 
• There was no documentation supporting the need for refills.
• Physician orders for these DME supplies was “missing or incomplete.”
• “Proof-of-delivery” documentation was missing.

As a result of these findings, HHS-OIG alleged that the MAC had improperly paid $39.2 million in claims by DME suppliers for blood-glucose test strips and/or lancets.  Remedial steps recommended by HHS-OIG for the Jurisdiction A DME contractor include:

“[I]mplement system edits to identify high utilization claims for test strips and/or lancets and work with CMS to develop cost-effective ways of determining which claims should be further reviewed for compliance with Medicare documentation requirements;

 [I]mplement system edits to identify claims for test strips and/or lancets that have overlapping service dates; and

 [E]nforce Medicare documentation requirements for claims for test strips and/or lancets by (1) identifying DME suppliers with a high volume of high utilization claims, (2) performing prepayment reviews of those DME suppliers, and (3) referring them to the Office of Inspector General or CMS for further review or investigation when necessary.”

 As reflected by the report, DME suppliers and their claims to the Medicare program remain under considerable government scrutiny.  In consideration of the recent enforcement authorities passed under the Health Care Reform Act, DME suppliers must continue to take affirmative steps to ensure that claims are fully documented, consistent with applicable statutory and regulatory provisions.

Liles Parker attorneys represent DME suppliers and companies in connection with HHS-OIG and Medicare contractor (e.g. ZPIC, PSC and RAC) audits.  Should you have questions in this regard, please call for a free consultation.  We can be reached at 1 (800) 475-1906.