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The Office of Inspector General (OIG) released a report (June 2018) regarding replacement Positive Airway Pressure (PAP) supplies and denied claims. According to their report, most Medicare claims that DME suppliers submitted for replacement PAP device supplies did not comply with Medicare Local Coverage Determination (LCD) requirements. A statistical sample of Medicare claims for replacement PAP device supplies paid in 2014 and 2015 was completed. A total of 110 claims were reviewed with 24 claims complying with Medicare requirements and 86 claims being noncompliant. Claims that did not comply with Medicare requirements included the following errors:
  • Physicians’ orders were not in accordance with LCD requirements - Fifty-three claims had invalid orders due to missing required elements, lack of a detailed written order prior to billing, missing supplies that were billed, or lack of a new order after change in supplier.
  • Replacement supplies were not reasonable and necessary. Fifty claims did not have a proper request for replacement supplies. Twenty-two claims did not have the proper documentation to support that the beneficiary continued to need PAP therapy and replacement of supplies. Only one claim was found where supplies dispensed were then allowed.
  • Thirty-six claims had no Proof of Delivery (POD) documentation.
  • Three claims had no response to their documentation request.
OIG recommendations included Medicare contractors to recover overpayments associated with the sample which totaled $13,414 that are within the 4-year reopening period and CMS to work closely with the four Medicare contractors in completing periodic review of claims. Such periodic reviews could have saved Medicare an estimated $631.3 million over a 2-year period. Medicare contractors will take remedial action for suppliers that consistently bill claims that do not meet Medicare requirements. WHAT YOU SHOULD DO? If you are a supplier that provides replacement PAP supplies, you need to look at your current processes related to these findings and make corrective actions to avoid overpayments. An order with all the required elements should be on file prior to submitting a claim. Required elements include beneficiary’s and physician’s names, the date of the order, a detailed description of the items to be dispensed, the quantity to be dispensed, the frequency of use, and the number of refills. The supplier must also obtain a new order when there is a change in supplier, supplies, frequency or quantity of use, or length of need. Documentation of a request for supplies from the beneficiary must be on record to support supplies are reasonable and necessary. A refill request must contain the date of the request, the description of each item requested, and the condition of the items being replaced in sufficient detail to demonstrate why they need to be replaced. Contact with the beneficiary must occur no more than 14 days prior to filling the order for replacement PAP supplies. Suppliers must obtain documentation to support continued medical need for and use of PAP therapy. Documentation must be dated within 12 months from the date of service and may be from the beneficiary’s medical record or as a recent order. When dispensing supplies, suppliers must provide no more than three months of supplies. Delivery records must include the shipping service’s delivery ticket with identification number to support supplies were delivered to the beneficiary or a signed direct delivery ticket. HOW WE CAN HELP? Before dispensing PAP supplies, let our clinical staff review your records to ensure the proper documentation is present that meets coverage criteria. Our proactive audit services can review a sample of your claims billed to Medicare and identify areas of weakness needing to be addressed to avoid overpayments. Proactive audits are completed on a quarterly basis to ensure issues identified are rectified and changes made continue throughout your organization. This proactive approach will allow you to be confident in your claims if you are audited based on the most recent OIG recommendations. For more information, contact us now!