The Office of Inspector General (OIG) has reported that the Jurisdiction A Durable Medical Equipment Medicare Administrative Contractor (DME MAC), National Heritage Insurance Company (NHIC), paid for lower-limb prostheses that did not meet local coverage determination (LCD) requirements. According to the August 2013 OIG report, NHIC paid $450,157 for 651 lines of service for lower-limb prostheses from January 1, 2009, through September 30, 2012, that did not meet LCD requirements, consisting of:
- $374,492 for 593 lines of service that had unallowable combinations of components.
- $63,583 for 43 lines of service that had missing or incorrect functional level modifiers.
- $9,026 for seven lines of service with unallowable Healthcare Common Procedure Coding System (HCPCS) codes.
- $3,056 for eight lines of service with unallowable quantities of test socket inserts.
At the time that NHIC paid these lines of service, it did not have edits in place to evaluate whether they met all the LCD requirements.
The OIG recommended that NHIC recover $450,000 in identified overpayments for lines of service for lower-limb prostheses that did not meet LCD requirements and monitor the edits it developed and updated to ensure that the edits are functioning correctly. NHIC concurred with the recommendations and provided the OIG with corrective actions that it had taken or planned to take.
