• PAP therapy for obstructive sleep apnea

OIG reviews Medicare claims for replacement PAP device supplies

The Office of Inspector General (OIG) in the U.S. Department of Health and Human Services (HHS) recently conducted a review of a sample of Medicare claims, finding that most Medicare claims for replacement positive airway pressure (PAP) device supplies did not comply with Medicare requirements.

The analysis involved claims paid in 2014 and 2015 for replacement PAP device supplies to determine whether the claims submitted by durable medical equipment (DME) suppliers for these replacement supplies complied with Medicare requirements. The review was performed on 110 claims, 24 of which complied with Medicare requirements, while 86 claims – with payments totaling $13,414 – did not. Based on this result, the OIG estimates that Medicare made overpayments of almost $631.3 million for replacement PAP device supply claims that did not meet Medicare requirements.

The OIG made the following recommendations:

  1. CMS should recover the portion of the overpayments of $13,414 associated with the 86 sample claims that are within the 4-year opening period.
  2. CMS should work more closely with the four Medicare contractors to establish periodic reviews of claims for replacement PAP device supplies and take remedial action for suppliers that the contractors find consistently bill claims that do not meet Medicare requirements.
  3. CMS should instruct Medicare contractors to notify 82 suppliers, associated with the 86 claims with potential overpayments, to exercise reasonable diligence to investigate and return any identified overpayments, in accordance with the 60-day rule, and to identify any returned overpayments.

The most common mistakes identified by auditors during the review were:

  • Physicians’ orders were not in accordance with local coverage determination (LCD) requirements.
  • Replacement supplies were neither reasonable nor necessary:
    • Suppliers did not have a proper request for replacement supplies, which must include:
      • Date of request
      • Description of each item requested
      • Functional condition of the items being replaced in detail to demonstrate why they need to be replaced
      • Replacements must only be made when supplies are no longer able to function.
      • Contact with the beneficiary must occur no more than 14 days before filling the order for new supplies.
    • Supplier did not document continued need for positive airway pressure device therapy and supplies.
    • Supplier dispensed more supplies than allowed:
      • Suppliers must not dispense more than a 3-month quantity of supplies at a time.
    • Supplier had no proof of delivery.
    • Supplier did not respond to auditor requests for documentation.
    • Insufficient Medicare oversight

Given the importance of making sure patients have continuous access to PAP supplies, sleep medicine professionals must be sure to provide all required information to DME suppliers so claims are neither denied nor paid out and subsequently reclassified as overpayments.

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2018-07-07T02:58:24+00:00July 7th, 2018|Clinical Resources|