The U.S. Department of Health and Human Services (HHS) Office of the Inspector General (OIG) has released its 2011 Work Plan, which includes OIG’s forthcoming activities relating to durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). This annual publication is released in advance of the coming year. It provides healthcare industry stakeholders with a broad overview of the OIG’s activities in the coming year as they relate to its enforcement priorities and issues it will review and evaluate during that fiscal year. OIG Work Plan priorities often result in additional enforcement action, significant change in Centers for Medicare & Medicaid Services (CMS) policy, or both.
Regarding DMEPOS suppliers, the OIG’s activities for 2011 are focused on issues such as supplier enrollment and monitoring, cost containment measures, the competitive bidding program, medical necessity and replacement frequency of supplies, and suppliers’ documentation in support of their claims for Medicare reimbursement. The following is a summary of issues that will directly impact O&P.
Enrollment and Monitoring of DMEPOS Suppliers
- Medicare Enrollment and Monitoring of DMEPOS Suppliers. OIG’s Office of Evaluation and Inspections (OEI) will review Medicare contractors’ processes for enrolling and monitoring DMEPOS suppliers. Pursuant to CMS’s Medicare Program Integrity Manual, Medicare contractors must conduct prescreening, verification, validation, and final processing of Medicare provider enrollment applications. OEI will also assess Medicare contractors’ use of enrollment screening mechanisms and post-enrollment monitoring activities to identify applicants that pose fraud risks to Medicare and the extent to which applicants omitted ownership information on enrollment applications.
- Medicare Qualifications of Orthotists and Prosthetists. OIG will review the extent to which Medicare claims for orthotics and prosthetics were paid to unqualified practitioners in 2009 by reviewing the credentials of a sample of providers submitting O&P claims and determine the extent to which the Centers for Medicare and Medicaid Services (CMS) provides oversight of O&P credentialing. OIG will also assess whether CMS provided guidance to state-licensing boards and the O&P industry on how to define a “qualified practitioner.” Pursuant to the Social Security Act, § 1834(h)(1)(F), “Special Payment Rules for Certain Prosthetics and Custom‐Fabricated Orthotics,” no payment will be made for such items unless provided by a qualified practitioner as defined in the statute. OIG concluded that the qualifications of orthotic suppliers varied, with noncertified suppliers most likely to provide inappropriate devices and services.
Cost Containment Measures
- Medicare Part B Payments for Lower-Limb Prostheses in 2009. OIG will review Medicare payments made in 2009 for lower‐limb prostheses. In 2009, Medicare paid about $655 million for lower‐limb prostheses, which represents 82 percent of Medicare Part B payments for all prostheses. Over the last five years, payments for lower‐limb prostheses have increased by 27 percent. OIG will also assess the policies and practices that Medicare contractors have in place for lower‐limb prosthetic claims to prevent fraud, waste, and abuse.
Competitive Bidding Program
- DMEPOS Competitive Bidding Process. OIG’s Office of Audit Services (OAS) will review how CMS conducts competitive bidding and subsequent pricing determinations for certain DMEPOS items and services in selected competitive bidding areas under rounds 1 and 2 of the competitive bidding program.
- Competitive Bidding Program: Supplier Influence on Physician Prescribing. OEI will review DMEPOS claims to determine the extent to which suppliers participating in the competitive bidding program are soliciting physicians to prescribe certain brands or modes of delivery of covered items that are more profitable to suppliers.
Medical Necessity and Frequency of Replacement
- Frequency of Replacement for Durable Medical Equipment. OAS will conduct audits of randomly selected claims in order to review how DMEPOS suppliers are dealing with the frequency for durable medical equipment (DME) replacement supplies. The certificate of medical necessity is supposed to specify the frequency. Suppliers are not supposed to dispense an automatic amount on a predetermined regular basis.
Suppliers’ Documentation in Support of Claims
- Medicare Payments for DME Claims with Modifiers. OAS will review and determine the appropriateness of Medicare Part B payments to DMEPOS suppliers that submitted claims with modifiers. For certain items to be covered under the Medicare program, DMEPOS suppliers must use modifiers to indicate that they have the appropriate documentation on file. In addition, the suppliers are required to provide, upon request, the documentation to support their claims for payment.
