OIG Work Plan For
HME Providers
By:
Jane Wilkinson-Bunch
2008 OIG Work Plan
 At the Beginning of each fiscal year, the
OIG identifies vulnerabilities in DHHS
programs and activities, and works to
improve their efficiency and effectiveness
 It is a year-round project that continually
changes with new information, new issues
and shifts in the priorities in the Congress,
President and Secretary
2008 Areas Focused on for
Home Medical Equipment
 DME Payments for Beneficiaries
Receiving Home Health Services
 Therapeutic Shoes
 KX and KS Modifiers
 Medical Necessity of DME
 Medicare Pricing of Equipment and
Supplies
Beneficiaries Receiving Home
Health Services
 A review of medical records for DME
items and supplies for beneficiaries
receiving HHA services, to determine if
the items and supplies were reasonable and
necessary for the beneficiaries condition
Therapeutic Footwear
 Determination will be made whether therapeutic
footwear was reasonable and necessary for the
beneficiaries whom it was provided.
 Previous OIG report indicates that a significant
percentage of beneficiaries did not have adequate
documentation to support the medical necessity
of the footwear
Therapeutic Shoes and
Inserts for Diabetic Patients
 Physician Order (coverage good for 1 calendar
year) Must be signed by Dr. treating patient for
diabetes
 Must also be treated for diabetes
 ICD-9 CM Codes 250.00-250.93 AND
Patient must meet medical policy guidelines
 KX Modifier, RT – right, LT – left
 Pair is reported as two units
 Prescribing physician – writes order for shoe,
modifications, and/or inserts (may be a
pedorthist, M.D.,D.O., podiatrist or orthotist)
Therapeutic Shoes and
Inserts for Diabetic Patients
 Be sure you have documentation that the
personnel fitting your shoes and inserts have
appropriate training and you document how the
patient was fitted
 Check state licensure requirements for O & P
Some States Require Licensure for
Therapeutic Shoes
 These are some of the following states that
require state Licensure to provide diabetic
shoes:
 Alabama, Arkansas, Florida, Illinois,
Mississippi, New Jersey, Ohio, Oklahoma,
Tennessee, Texas, Rhode Island and
Washington
 There are more requiring licensure
constantly, so check your state
requirements regularly!!
KX and KS Modifiers
 When a claim is filed with the KX or KS
modifier, the provider, upon request, must
provide documentation to support the
claim for payment
 OIG has found that many suppliers had
little or no documentation to support the
claims, therefore many of these claims
should not have been paid
Most Items Requiring “KX”
Modifier
– Diabetic Shoes and Inserts
– Urological Supplies
– Group I, II and III Support
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Surfaces (including
wheelchair cushions)
Diabetes Monitor &
Supplies (insulin dependent)
Dialysis Supplies (Epoetin
Alpha-Epo)
Refractive Lenses
Bedside Commodes
Cervical Traction
Equipment (E0849)
Conductive Garment
(E0731)
Ankle Gauntlets
– Orthopedic Footwear
– Continuous Positive Airway
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Pressure Devices (CPAP) &
Supplies
Respiratory Assist Devices
& Supplies
All Walkers & Accessories
Negative Pressure Wound
Therapy Pump
High Frequency Chest Wall
Oscillation Devices
Hospital beds & Accessories
All Wheelchairs &
Accessories
Trapeze Bars
Medical Necessity of DME
 Determine the appropriateness of Medicare
payments for items such as Power
Wheelchairs, Wound Care equipment and
supplies and orthotics
 Assessment will include documentation to
support claim, documentation to support
medical necessity and whether the
beneficiary actually received the item
Medicare Pricing of Equipment
and Supplies
 Comparison of Medicare payment rates for
certain medical equipment and supplies with
rates of other Federal and State Programs as well
as wholesale and retail prices
 Review will cover such items as Wheelchairs,
Parental Nutrition, Wound Care equipment and
supplies, and Oxygen equipment and supplies
Will You Be Audited?
IS JANE BUNCH
SOUTHERN? 
 Targeted Audits
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Bill more than one million per year
Limited product mix
***Beneficiary /other complaints***
Frequent claims for abused items
Recurring errors on claims
Abnormal charge pattern
Dramatic changes in fees
Repeated billing for overutilization
 Routine Audits
TARGETED TYPES
– Program Integrity
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Reviews documentation and record content
Utilization Review
Verifies need and frequency
ECS
Authenticity/signature on file
Phone/Fax
Mail (Love Letter from CMS)
On-site
RAC Audits
CERT Audits
Are you prepared to survive?
Your Internal Audit Should
Include:
– Review of Documentation Requiring Beneficiary
Signature
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Assignment of Benefits
Supplier Standards
Release of Information
Rental/Purchase Option
Delivery Ticket/Pickup Slip
HIPAA Notice of Uses/Privacy Practices
ABN (Advanced Beneficiary Notice)
– Review of Medical Necessity Documentation
• Physician Orders
• WOPDs
• CMNs
Patient’s Medical Records
 The CMN is not enough if audited
 Attempt to obtain the following:
* Physician’s Office Records
* Labs and X-Rays related to diagnosis
* Hospital Records
* Nursing Home records
* Home Health Agency Records
* Records from other Healthcare Professionals
The medical records should contain objective data to support the physician
statement, diagnosis or condition.
Auditing The Delivery Ticket
 Patient’s Full Name & Address
 Quantity of equipment and/or supplies
delivered
 Detailed description of the item being
delivered
 Brand name of equipment or supplies
 Serial and/or lot numbers
 Patient’s/Designee signature and date
Delivery Ticket Requirements
 Signature date must be the date that the item was
received by the beneficiary or designee
– Designee is…
• “Any person who can sign and accept the delivery of durable
medical equipment on behalf of the beneficiary.”
Relationship must be noted on delivery slip
 7 days to call...
 5 days to bill...
 48 hours following discharge after hospital /
discharge ...
Auditing the AOB Form
 Assignment of Benefits
– Equipment / supply itemized
– New signed form required for each new
product class
– Must be itemized with each supply or piece of
equipment the patient is authorizing you to
bill.
– Patient unable to sign – Requirements must be
met
Auditing the ABN
 Advanced Beneficiary Notice
– Specific situation/reason noted
– Must be obtained before delivery
– Correct use of modifiers
– “GZ” beneficiary did NOT sign ABN
• Upgrade with NO ABN
– “GL” free upgrade provided
– “GK” item physician actually ordered
• Item must be billed correctly
– “GA” upgrade provided and supplier has obtained a signed ABN
from beneficiary before item was delivered
– Patient signature and date
– Correct form used?
“ABN” cont…
– “Routine" or “Blanket" ABNs to Medicare
beneficiaries are not permitted
– An ABN should not be given to a Medicare
beneficiary unless the supplier has a genuine
reason to expect that Medicare will deny
payment for some or all of the services.
– Assigned and non-assigned claims
– ABN’s are only good for ONE YEAR!
NEW ABN FORM:
(A) Notifier(s):
(B) Patient Name: (C) Identification Number:
ADVANCE BENEFICIARY NOTICE OF NONCOVERAGE (ABN)
NOTE: If Medicare doesn’t pay for (D)_____________ below, you may
have to pay.
Medicare does not pay for everything, even some care that you or your
health care provider have
good reason to think you need. We expect Medicare may not pay for the
(D)_____________ below.
(D)
(E) Reason Medicare May Not Pay: (F) Estimated
Cost:
W HAT YOU NEED TO DO NOW:
• Read this notice, so you can make an informed decision about your
care.
• Ask us any questions that you may have after you finish reading.
• Choose an option below about whether to receive the
(D)_____________listed above.
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NEW ABN FORM CONT’D:
Note: If you choose Option 1 or 2, we may help you to use any other
insurance that you might have, but Medicare cannot require us to do this.
(G) OPTIONS: Check only one box. We cannot choose a box for you.
❏ OPTION 1. I want the (D)__________ listed above. You may ask to be paid now, but I
also want Medicare billed for an official decision on payment, which is sent to me on a Medicare
Summary Notice (MSN). I understand that if Medicare doesn’t pay, I am responsible for
payment, but I can appeal to Medicare by following the directions on the MSN. If Medicare
does pay, you will refund any payments I made to you, less co-pays or deductibles.
❏ OPTION 2. I want the (D)__________ listed above, but do not bill Medicare. You may
ask to be paid now as I am responsible for payment. I cannot appeal if Medicare is not billed.
❏ OPTION 3. I don’t want the (D)__________listed above. I understand with this choice
I am not responsible for payment, and I cannot appeal to see if Medicare would pay.
(H) Additional Information:
This notice gives our opinion, not an official Medicare decision. If you have other questions
o n this notice or Medicare billing, call 1-800-MEDICARE (1-800-633-4227/TTY: 1-877-486-2048).
Signing below means that you have received and understand this notice. You also receive a copy.
(I) Signature:
(J) Date:
According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection of information unless it
displays a valid OMB control
number. The valid OMB control number for this information collection is 0938-0566. The time required to complete this
information collection is estimated to
average 7 minutes per response, including the time to review instructions, search existing data resources, gather the data
needed, and complete and review the
information collection. If you have comments concerning the accuracy of the time estimate or suggestions for improving this
form, please write to: CMS, 7500
Security Boulevard, Attn: PRA Reports Clearance Officer, Baltimore, Maryland 21244-1850.
Form CMS-R-131 (03/08) Form Approved OMB No. 0938-0566
Auditing Financial Hardship
 Acceptable Form Utilized
 Completed and signed
 Patient meets hardship guidelines
 Hardship Approval
 Policy and Procedure developed
 Poverty Guidelines
– New one every Feb/March
2008 HHS Poverty Guidelines
Persons
in Family or Household
1
2
48 Contiguous
States and D.C. Alaska Hawaii
$10,210
$12,770 $11,750
13,690
17,120 15,750
3
4
5
17,170
20,650
24,130
21,470
25,820
30,170
19,750
23,750
27,750
6
7
8
For each additional
person, add
27,610
31,090
34,570
34,520
38,870
43,220
31,750
35,750
39,750
3,480
4,350
4,000
Auditing HCPCS Codes
 Correct code used
 No upcoding
 Verified by SADMERC
– P.O. Box 100143
Columbia, SC 29202-3143
– 1-877-735-1326 (toll-free)
– 9:00 AM – 4:00 PM Mo, Tu, Th, & Fr.
9:00 AM – 6:00 PM We
Eastern Standard Time
Summary
 Audit now to be prepared later
 Compliance plan adopted?
 HIPAA Implementation
 Test employees regularly
Jane Wilkinson-Bunch
President/CEO
Jane’s Healthcare Consulting,
Inc.
(770) 366-0644 cell
(770) 517-9109 fax
Billhme@aol.com
“An advocate for the
Independent HME provider”