The Department of Health & Human Services (HHS), Office of the Inspector General (OIG), has issued its Work Plan for fiscal year (FY) 2012, which reflects a continued increase in OIG’s focus on suppliers of 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.
One O&P-specific project is new to this year’s Work Plan:
- Collection of Surety Bonds for Overpayments Made to DMEPOS Suppliers. OIG will review CMS’s use of surety bonds, a fraud prevention/limitation measure, to recover overpayments made to DMEPOS suppliers. OIG will determine the amount of overpayments CMS sought and recouped through DMEPOS surety bonds, and also identify barriers to surety bond collection. Certain DMEPOS suppliers must provide and maintain a surety bond of no less than $50,000, per BBA, § 4312(a)(16).
Six O&P-specific projects in the FY 2012 Work Plan are carried over from the prior year. If a project is carried over, rather than cancelled, it typically means OIG continues to remain interested in it, despite its changing priorities. The fact that a project has not been carried over does not suggest that OIG is no longer interested in that area. Carry-over projects include:
- Medicare Enrollment and Monitoring for DMEPOS Suppliers. OIG will review and assess Medicare contractors’ use of enrollment-screening mechanisms and post-enrollment monitoring activities for DMEPOS suppliers to identify applicants that pose fraud risks to Medicare and the extent to which applicants omitted ownership information on enrollment applications. Pursuant to CMS’ Medicare Program Integrity Manual, Medicare contractors must conduct prescreening, verification, validation, and final processing of Medicare provider enrollment applications.
- Medicare Qualifications of Orthotists and Prosthetists. OIG will review the credentials of a sample of providers submitting custom-fabricated O&P claims to determine the extent to which Medicare paid unqualified practitioners in 2009 and the extent to which CMS provides oversight of credentialing of orthotists and prosthetists. OIG will also assess whether CMS provided guidance to state licensing boards and industry on how to define a “qualified practitioner” of O&P. Pursuant to special payment rules for certain custom-fabricated prosthetics and custom-fabricated orthotics, no payment will be made for such items unless provided by a qualified practitioner as defined in the Social Security Act, § 1834(h)(1)(F). OIG concluded that the qualifications of orthotic suppliers varied, with noncertified suppliers most likely to provide inappropriate devices and services.
- Medicare Supplier Acquisition Costs for Back Orthoses. OIG will compare supplier acquisition costs to the Medicare reimbursement amount for the back orthosis procedure code L-0631. Back orthoses are covered by Social Security Act, § 1832(a)(2), and are supplied by Medicare DMEPOS suppliers, who purchase back orthoses from wholesalers or directly from orthotics manufacturers. OIG has encountered suppliers and Internet retail shops that can provide these back orthoses for prices significantly lower than Medicare reimbursement rates of $929.
- Frequency of Replacement of Supplies for Durable Medical Equipment. OIG will review the compliance of DMEPOS suppliers with Medicare requirements for frequently replaced durable medical equipment (DME) supplies to determine whether payments for such supplies met Medicare requirements…. OIG will select a sample of claims for frequently replaced supplies. For DME supplies and accessories used on a periodic basis, the order or certificate of medical necessity must specify the type of supplies needed and the frequency with which they must be replaced, used, or consumed, according to CMS’ Medicare Program Integrity Manual. Further, a beneficiary or a beneficiary’s caregiver must specifically request refills of repetitive services and/or supplies before a supplier dispenses them. Also, a supplier may not initiate a refill of an order and a supplier must not automatically dispense a quantity of supplies on a predetermined regular basis.
- Medicare Payments for DME Claims with Modifiers. OIG will review and determine the appropriateness of Medicare Part B payments to DME suppliers that submitted claims with certain modifier codes. For certain items to be covered by Medicare, DME suppliers must use modifiers to indicate that they have the appropriate documentation on file and provide, upon request, the documentation to support their claims for payment.
- Competitive Bidding Process for Medical Equipment and Supplies. OIG will review the process CMS used to conduct 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. Federal law, MIPPA, § 154(a)(1)(E), requires OIG to conduct post-award audits to assess this process.
- Medicare DMEPOS Competitive Bidding Program: Supplier Solicitation of Physician Prescribing. OIG will interview prescribing physicians 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. OIG will also examine billing patterns to identify changes resulting from competitive bidding.
Click here to read a copy of the complete OIG 2012 Work Plan.