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David McGill Blogger

Guilt By Association

Posted by David McGill | October 08, 2013

CMS has published its Fee-for-Service 2012 Improper Payments Report. Here are the key findings:

  • The improper payment rate for DMEPOS was 66%. For frame of reference, although DMEPOS accounts for only 2.8% of all 2012 CMS expenditures, it accounts for 19.8% of the overall FFS improper payment rate.
  • 94.2% of the DMEPOS improper payments resulted from "insufficient documentation" errors. "Insufficient documentation" includes claims that fail to contain enough information to determine whether (1) a beneficiary received the billed service or (2) the service was medically necessary. It also includes claims missing documentation required as a condition of payment, such as a physician signature on an order.
  • Oxygen supplies, glucose monitors and nebulizers had the highest incidence of improper payments within the DMEPOS category, accounting for close to 46% of the improper payments in 2012.

The report further notes that

documentation created by the DMEPOS supplier alone is insufficient to warrant payment of the claim. It is often difficult to obtain proper documentation for DMEPOS claims because the supplier that billed for the item must obtain detailed documentation from the medical professional who ordered the item.

The authors then use this fact to justify the creation of the "Dear Physician" letters sent to doctors in 2011:

Due to the importance of documentation to substantiate the necessity of the DMEPOS items billed, CMS began notifying the ordering provider [the physician] in 2011 when an item is selected for CERT review. The notification reminds providers of their responsibilities to document medical necessity ... and to submit requested documentation to the supplier.

What does this mean for you?

The good news is that the report does not explicitly call out prosthetics or orthotics, while it does discuss other items of DMEPOS. For example, oxygen, glucose monitoring supplies, nebulizers, power mobility devices, CPAP, and Evaluation and Management services all get their own subsections of shame in the report. From this, we can infer that O&P did not, by itself, rise to a level that warranted a badge of dishonor.

The bad news, however, is the same bad news that has plagued O&P for years: for categorization purposes, it's the "P" and "O" within DMEPOS. Or, stated another way, O&P gets tainted by its inclusion in the fee-for-service world that includes DME and supplies.

It's therefore unlikely that this report will fundamentally change the nature of O&P's relationship with Medicare. Both sides can point to data (or the absence of data) to support long-held positions.

One final point: in the two paragraphs quoted above relating to the Dear Physician letters, CMS takes the position that it created them to help suppliers obtain necessary documentation from doctors. On the other hand, AOPA, in its lawsuit filed earlier this year, argues that these letters instead created new requirements impairing prosthetists' ability to successfully process claims, especially when government contractors applied these rules retroactively to old claims.

A ruling in the government's motion to dismiss that lawsuit could come late this year or early 2014. Will the court accept CMS's version of events or AOPA's? Stay tuned.

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