More info on proper billing for diabetes test strips needed: OIG

To address questionable Medicare payments for diabetes test strips, the CMS should provide more education to suppliers and beneficiaries about proper billing practices for these products, according to a report from HHS' Office of the Inspector General.

It found that Medicare allowed $425 million in questionable bills from about 10% of DTS suppliers in 2011. The report also concluded that Medicare's competitive bidding program, which has come under fire from the medical supply industry, achieved some success in this area.

Studies from the OIG have concluded that DTS billing is an area vulnerable to fraud, waste and abuse. In 2011, Medicare paid about $1.1 billion to 51,695 suppliers for DTS that were provided to 4.6 million beneficiaries. That same year, the CMS implemented a competitive bidding program to lower payments for durable medical equipment, prosthetics, orthotics and supplies as a way to crack down on fraud and abuse. Mail order DTS is included in that program, but non-mail order DTS is not.

In the report released Tuesday, the OIG found that the competitive bidding program “appears to have reduced questionable billing for mail-order DTS in (competitive bidding areas).”

Meanwhile, the OIG also concluded that Medicare inappropriately allowed $6 million for DTS claims billed for beneficiaries without a documented diagnosis code for diabetes, or that inappropriately overlapped with an inpatient hospital stay or inpatient skilled-nursing facility stay.

Of the $425 million in Medicare-allowed claims that were deemed questionable, the OIG found that suppliers in 10 geographic areas—in sections of Arizona, California, Florida, Kansas, Mississippi, Missouri, New Jersey, New York, Pennsylvania and Tennessee—were responsible for 77% of the questionable billing.

The study examined six measures for dubious billing, which include examining things such as the average percentage of suppliers' non-mail order DTS claims for beneficiaries who lived an unusually long distance away and the average percentage of suppliers' DTS claims in excess of Medicare utilization guidelines.

To prevent inappropriate claims, the OIG recommends that the CMS enforce claims-processing edits to prevent wrongful claims that do not include an appropriate diabetes diagnosis code. Those edits should identify any DTS claims that overlap with an inpatient hospital stay or skilled-nursing facility state and mark them for further review.

The report also recommended that the CMS increase its monitoring of DTS suppliers' Medicare billing and offer more education to suppliers and beneficiaries about inappropriate billing practices. “On July 1, 2013, the national mail order (NMO) competitive bidding program for diabetic testing supplies began,” the report noted. “CMS believes the NMO competitive bidding program will reduce the number of mail order DTS suppliers,” it continued. “We encourage CMS to closely monitor suppliers that are awarded an NMO contract. CMS should also monitor non-NMO suppliers that did not win contracts.”

According to the report, the CMS reviewed a draft of the OIG's analysis and concurred in part with two of its recommendations: to enforce existing edits and to increase monitoring of DTS suppliers' Medicare billing. The agency concurred with the OIG's suggestions to provide more education to suppliers and Medicare beneficiaries and a fourth recommendation to take appropriate action regarding inappropriate Medicare DTS claims and suppliers with questionable DTS billing.

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