Potential ventilator overpayments identified by the OIG

In September 2016, the OIG released a report titled “Escalating Medicare Billing for Ventilators Raises Concerns“. The report findings were a result of the 2016 OIG Work Plan that identified ventilators as a target for review. The OIG investigation looked to identify (1) billing trends and factors associated in the increase in billing of ventilators (E0464), (2) the frequency of ventilators billed inappropriately for beneficiaries with non life-threatening conditions, (3) instances in which ventilators would not be considered reasonable and necessary to treat conditions described in the CPAP or RAD LCDs, and (4) the impact competitive bidding had on ventilator billing trends.

To conduct the investigation the OIG conducted data analysis of claims billed with code E0464, against other variables. These variables included a diagnosis of Obstructive Sleep Apnea (OSA), a CPAP or RAD billed in concurrent months, and ventilator accessories. Some of the highlights from the published report include the following:

  • Medicare inappropriately paid $25 million ventilator claims
  • 85% increase in ventilator billing from 2009 to 2015
  • Increase is driven by 3 national suppliers (54% growth)
  • Shift from treatment of neuromuscular conditions, as indicated in the NCD, to respiratory conditions
  • Inappropriate billing due to diagnoses of obstructive sleep apnea, billing for multiple devices for the same beneficiary, and billing separately for accessories (unbundling)

At the time this report was published, the ramifications were not quite known. The OIG indicated that they would make recommendations to the CMS for appropriate followup. The result? The CMS has required the DME MACs to identify suppliers of potential overpayments for ventilator claims made to them. In the past two weeks, suppliers nationally have received letters from Noridian and CGS, advising them to investigate and self-report claims identified by the OIG that were potentially overpaid.

If you receive one of these letters here is what you need to do:

  • Review the reason the claims were identified by the OIG. Your letter will identify one of three reasons you may have been overpaid. The identified reasons are:
    1. Multiple devices concurrently
    2. OSA diagnosis, or
    3. Separately billed accessories.
  • Carefully review the claims indicated on the letter. More specifically, check the claims history to determine if a CPAP or RAD was billed prior to or during the billing cycle a ventilator claim was filed if the reason given is “Multiple devices concurrently”. If an OSA diagnosis was the reason given, review your claims history for diagnoses billed. Lastly, check the claims indicated for separately billed accessories if that reason was given.
  • Respond accordingly. Your letter will indicate your option to either attest that you reviewed the claims and no overpayments exist or that you identified an overpayment and you will be taking the appropriate steps to reconcile the overpaid claims with the DME MAC.

Please note that your response to the DME MAC requires your printed name and signature, thus attesting that you have conducted your own investigation of the claims indicated and acted appropriately, in accordance with 42 CFR 401.305, if required.

At this time there is no indication that the DME MACs will conduct further audits on the identified claims. However, as is all things with Medicare, anything is possible. For that reason I strongly encourage you to conduct a thorough investigation of the claims to determine they are medically necessary, and more importantly, that you have the documentation to prove as much. Self-reporting an overpayment does not imply guilt or fraud, and will not leave you open to a barrage of future audits. Should those claims be audited in the future, you will be afforded appeal rights, as you are with any overpayment claim.

If you received one of these letters, take a deep breath and begin your due diligence. For now, the opportunity to self-report versus the DME MAC automatically auditing the claims is a welcome change!

The full report can be viewed by clicking here, “Escalating Medicare Billing for Ventilators Raises Concerns“.

If you would like further assistance, let our Clinical team help! The van Halem Group can conduct reviews of your claims to determine risk or prescreen any future ventilator claims prior to billing. Should your claims be audited later, our Audits and Appeals team will work hard to get your claims overturned. We also offer a variety of compliance solutions to protect your business. Give us a call today!