Medicare Compliance & Reimbursement

Suppliers are caught in the crossfire between CMS, OIG, and politicians. Suppliers can expect even more scrutiny from Medicare thanks to a new scandal about CMS' CERT program. In a new report, the HHS Office of Inspector General chastises the Centers for Medicare & Medicaid Services and its Comprehensive Error Rate Testing (CERT) contractor AdvanceMed for calculating misleading durable medical equipment payment error rates. CMS gave AdvanceMed oral directions to use less stringent review criteria for DME claims when calculating the 2006 CERT rate, says the OIG's report (A-01-07-00508). Those instructions led to a 7.5 percent error rate for DME claims when it really should have been 28.9 percent, according to a claims sample examined by OIG investigators. The OIG report says CMS told the CERT reviewers to: • make determinations based primarily on the limited medical records available from suppliers, not the full medical records available from physicians; • apply clinical inference when reviewing supplier medical records to reasonably infer that the DME provided was medically necessary; and • not count lack of proof of delivery as an error if that was the only issue with a claim. Politicians Go Ballistic Word of the OIG's report leaked in a New York Times story before the agency officially issued it. "This is outrageous," said Senate Finance Committee ranking member Chuck Grassley (R-IA). "This report doesn't surprise me," House Ways & Means Comm-ittee Chair Pete Stark (D-CA) told the paper. "To look better to the public, you cook the books," he said. "This agency is incompetent." CMS response: "Allegations of manipulation of this error rate are preposterous," said CMS spokesperson Jeff Nelligan. "The agency has aggressively targeted fraud and improper payments in the DME program." "When you find such a big discrepancy, you can't help but be mad and feel you've been misled," Grassley said in a statement released after the OIG issued the official final report. "I gave CMS credit for doing a good job in 2006, and now we find out the numbers are bogus." Reps. Ileana Ros-Lehtinen (R-FL) and Lincoln Diaz-Balart (R-FL) say they have asked House Oversight and Government Reform Committee Chair Henry Waxman (D-CA) to hold hearings on the issue in the fall, according to press reports. Will Error Rate Flap Stall Bidding Efforts? The controversy is likely to result in more scrutiny for Medicare DME claims, experts predict. CMS has already signaled a willingness to follow the OIG's suggestions on toughening up the CERT program review. But it also may throw up a roadblock to suppliers' efforts to get rid of competitive bidding once and for all. The New York Times article pointed out that "on July 1, Medicare instituted a new competitive bidding system [...]