The Council for Medicare Integrity is reporting that Medicare had an improper payment rate of about 40 percent* in 2015 for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS), and lost $3.2 billion* due to improper medical billing, reported RevCycle Intelligence. “This billing error rate happens to be about three times higher than the amount of the national Medicare fee-for-service (FFS) improper payment rate, which is currently 12 percent,” the article further stated, and insufficient documentation was the most common error, accounting for $2.6 billion of the $3.2 billion in improper medical billing. The data quoted by the Council was obtained from the Centers for Medicare & Medicaid Services (CMS) 2015 Comprehensive Error Rate Testing (CERT) report.
*Editor’s note: These are projected figures based on 11,552 claims sampled, 11,007 claims reviewed, and $8 billion in total payments made for the reviewed claims. The OP&P-related amount of DMEPOS services with improper payments rates totaled $507 million (see the fifth bullet point).
RevCycle Intelligence indicated that DMEPOS claims with the highest improper rate were hospital bed/accessories at 85.3 percent, manual wheelchairs at 81.3 percent, and surgical dressings at 72.5 percent. Claims for oxygen equipment and accessories had an improper payment rate of 48.5 percent and respiratory assist devices had an improper rate of about 68 percent. Podiatrists were found to be responsible for the most DMEPOS improper billing, overbilling about 67 percent of the time, while medical supply companies with pedorthic personnel had a 59 percent improper payment rate and multispecialty clinics had a 57.9 percent rate.
The article concluded by quoting the Council for Medicare Integrity, which said that due to the high level of DMEPOS improper payments, CMS decided to “pull this category out of its regional auditing structure and create a fifth auditing area devoted solely to looking at DMEPOS claims.” When new Recovery Audit Contractor (RAC) contracts are executed, this change will be implemented.
A Look at the Numbers
The following summarizes the most noteworthy OP&P-related data from the CERT report.
- DMEPOS projected improper billing of $3.2 billion comprised 7.4 percent of the total projected $43.3 billion in Medicare Part A/B improper billing.
- DMEPOS indicated $2.6 billion in projected improper billing due to insufficient documentation (8.9 percent of the total projected $29.2 billion in Medicare Part A/B improper billing due to insufficient documentation).
- DMEPOS payments made totaled $8 billion (2.2 percent of the total $358.3 billion in payments made for all of Medicare Part A/B claims).
- Projected improper payment rates and amounts for lower-limb prostheses by referring provider: internal medicine, 38.6 percent ($32 million); family practice, 30.5 percent ($32 million); general surgery, 11.3 percent ($28 million); physical medicine and rehabilitation, 31.9 percent ($21 million); and no referring provider type, 24.5 percent ($3.6 million)
- Six of the 46 listed DMEPOS services with improper payments rates were specifically OP&P related, and four were in the top 20 (based on the above projected rate and figure): number 5, lower-limb orthoses, 46.3 percent ($130 million); number 6, lower-limb prostheses, 23.7 percent ($127 million); number 9, diabetic shoes, 66 percent ($119 million); number 14, LSOs, 51.6 percent ($91 million); number 28, upper-limb orthoses, 45.8 percent ($27 million); and number 35, breast prostheses, 33.9 percent, or $13 million.
- Improper payment rates and amounts by DMEPOS suppliers (based on the above projected rate and figure): individual certified prosthetist, 36.5 percent ($79 million); individual certified orthotist, 23.9 percent ($78 million); individual certified prosthetist-orthotist, 16.4 percent, ($3 million); medical supply company with certified prosthetist-orthotist, 40.1 percent ($49 million); medical supply company with certified orthotist, 48.2 percent ($48 million); medical supply company with certified prosthetist, 40.5 percent ($12 million); and medical supply company with pedorthist, 59.1 percent ($3 million)