On June 13, 2012, the OIG issued a report following its review of four contractors that processed claims for test strips and/or lancets. The report concludes that the Medicare contractors improperly allowed for payment of a total of approximately $271 million in claims that the OIG identified as high utilization claims. The OIG estimated that the contractors improperly paid $209 million to pharmacies/DME suppliers. This is a summary of the findings:
SUMMARY OF FINDINGS
Of the 400 sampled claims for test strips and/or lancets that the OIG reviewed, 97 claims complied with Medicare guidelines. However, 303 claims (76 percent) had 1 or more deficiencies:
- The quantity of supplies that exceeded utilization guidelines was not supported with documentation that specified the reason for the additional supplies, the actual frequencies of testing, or the treating physicians’ evaluations of the patients’ diabetic control within 6 months before ordering the supplies (222 of 400 claims, or 56 percent).
- Lack of supporting documentation that indicated refill requirements had been met (117 of 400 claims, or 29 percent).
- Physician orders were missing or incomplete (90 of 400 claims, or 23 percent).
- Proof-of-delivery records were missing (33 of 400 claims, or 8 percent).
OIG RECOMMENDATIONS
The OIG recommends that CMS:
- ensure that Medicare contractors implement a variety of system edits to:
- identify high utilization claims for test strips and/or lancets and develop cost-effective ways of determining which claims should be further reviewed for compliance with Medicare documentation requirements
- identify claims that have overlapping service dates for the same beneficiary
- ensure that contractors are enforcing Medicare documentation requirements for claims for test strips and/or lancets by monitoring the contractors’: (1) identification of suppliers with a high volume of high utilization claims, (2) performance of prepayment reviews of those suppliers, and (3) referrals of suppliers to the OIG or CMS for further review or investigation when necessary
- consider the results of the OIG reviews when developing and evaluating coverage and reimbursement policies related to test strips and lancets
The findings in the report are likely to result in increased audits of pharmacy/DME suppliers selling test strips and/or lancets. If you are a pharmacy or DME supplier facing an audit due to test strips and/or lancets, contact Frier Levitt to speak to an attorney.
