The Department of Health & Human Services (HHS), Office of the Inspector General (OIG), has issued its 2013 Work Plan, which includes OIG’s forthcoming activities related to 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. The OIG Work Plan priorities often result in additional enforcement action, significant change in Centers for Medicare & Medicaid Services (CMS) policy, or both.
The following is a summary of issues that will directly impact O&P.
- Back Orthoses: Reasonableness of Medicare Payments.
OIG will evaluate the reasonableness of Medicare’s spending on back orthosis code L-0631 (LSO sag-coro rigid frame pre), which are covered by Social Security Act, § 1832(a)(2) and supplied by medical equipment suppliers who purchase them from wholesalers or directly from orthotics manufacturers. For 2011, the median Medicare reimbursement amount for an L-0631 back brace was $929. OIG has encountered suppliers who can purchase these back orthoses for prices significantly less than Medicare reimbursement rates. Internet retail prices for back orthoses are also significantly less than what Medicare pays. (Work in progress.) - Program Integrity: Use of Surety Bonds to Recover Overpayments.
OIG will review CMS’ use of surety bonds to recover overpayments made to medical equipment suppliers, and determine the extent to which CMS maintains complete and accurate surety bond information for medical equipment suppliers. OIG will also determine the number of medical equipment suppliers with overpayment debt, the extent to which these suppliers had surety bond coverage, and the amount of overpayment debt that could have been recovered through surety bonds since October 2009. Certain medical equipment suppliers must provide and maintain a surety bond of no less than $50,000. (Editor’s note: Exempt from maintaining surety bonds are state-licensed orthotic and prosthetic personnel in private practice making custom-made orthotics and prosthetics if the business is solely-owned and operated by said personnel and is billing only for orthotics, prosthetics, and supplies.) (Work in progress.) - Program Integrity: Reliability of Service Code Modifiers on Claims.
OIG will determine the appropriateness of Part B payments that Medicare made on the basis of specific service code modifiers that suppliers entered on the claims. Suppliers must provide, upon request, the documentation to support the claims for payment. Payments to service providers are precluded unless the provider maintains and furnishes upon request the information necessary to determine the amounts due (Social Security Act, § 1833(e)). (Work in progress.) - Competitive Bidding: Mandatory Review.
OIG will review the process CMS used to conduct competitive bidding and to make subsequent pricing determinations for certain medical equipment items and services in selected competitive bidding areas under rounds 1 and 2 of the competitive bidding program. Federal law requires OIG to conduct post-award audits to assess this process. (Work in progress and new start.) - Lower-Limb Prostheses: Supplier Compliance with Payment Requirements.
OIG will review Medicare Part B payments for claims submitted by DMEPOS suppliers for lower-limb prostheses to determine whether the requirements of CMS’ Benefits Policy Manual, Pub. 100-02, ch. 15, § 120, were met. Payments to service providers are precluded unless the provider has and furnishes upon request the information necessary to determine the amounts due (Social Security Act, §1833(e)). Medicare does not pay for items or services that are not reasonable and necessary (Social Security Act, § 1862(a)(1)(A)). (New.) - Quality Standards: Accreditation of Medical Equipment Suppliers.
This review will examine accreditation organizations’ (AO) requirements and processes for granting accreditation to ensure that medical equipment suppliers meet each of Medicare’s quality standards. Medical equipment suppliers must become accredited by a CMS-approved AO and must comply with quality standards to maintain their billing privileges. CMS oversees AOs through validation surveys. This review will also evaluate CMS’ procedures for conducting validation surveys. (New.)
