Home oxygen therapy accounts for one of the largest shares of Medicare payments for HME and shows no sign of decreasing. Between 1992 and 1996, Medicare payments for oxygen equipment more than doubled, increasing from about $900 million to about $1.9 billion. In addition, Medicare allowances for oxygen equipment totaled over $2 billion in 1997 and these figures have continued to increase annually.

Given this data, it is unsurprising that home oxygen therapy has received its share of scrutiny by fraud and abuse investigators. This is especially true for portable oxygen reimbursements where auditors from the Benefit Integrity Unit (BIU)—the organization responsible for ensuring Medicare claims are paid in accordance with Medicare guidelines—often demand significant overpayments from HME providers.

Assessing your audit risk
The instructions and guidelines for portable oxygen claims appear concise and adequate. To be eligible for reimbursement for portable oxygen, the beneficiary must meet the same medical necessity criteria as required for a stationary unit—which is covered in Section 1861 (S)6 of the Social Security Act.

According to the act, Medicare covers home oxygen therapy (including portables) for beneficiaries diagnosed with significant hypoxemia, a deficiency in the amount of oxygen in the blood typically associated with severe respiratory problems. The main home oxygen therapy coverage criteria are:

1. The patient’s ability to breathe is severely impaired.
2. Laboratory tests demonstrate that the patient has a medical need for oxygen therapy.
3. The treating physician has prescribed oxygen therapy.
4. The treating physician has deemed alternative treatment modalities tried or considered as clinically ineffective.

In addition, the supplier manuals from the Durable Medical Equipment Regional Carriers (DMERCs) provide extensive explanations of both the medical necessity and documentation requirements to obtain reimbursement for home oxygen patients. For example, DMERCs will deny a portable oxygen claim if the qualifying test was performed while the patient was asleep.

The manuals also explain the correct modifiers providers must add to the Healthcare Common Procedure Coding System (HCPCS) code to designate a liter flow less than 1 liter per minute or greater than 4 liters per minute, or the addition of an oxygen conserving device to extend the usage of the portable unit. And all four DMERCs give instructions in the completion of the certificate of medical necessity (CMN), including outlining the specific situations when an initial, recertification, and/or revised CMN is needed.

Examining the Audit Process
With so much information, most respiratory suppliers can (and probably do) recite qualifying blood gas levels in their sleep. But no matter how careful you may be, an audit is always a possibility and therefore it is vital to understand the process BIU auditors use when reviewing portable oxygen claims.

In researching this article, I made numerous attempts to contact representatives of the BIU. I wanted to determine if there were specific (hopefully, written) instructions or directives provided to BIU specialists to follow when performing an audit of a claim for portable oxygen other than those published in the supplier manuals.

My calls were not returned and a manager I reached on a follow-up call could only suggest that HME providers should call the provider help line if they had questions. No additional help or resources were forthcoming.

Luckily, in August 1999, the Department of Health and Human Services, under the Office of Inspector General (OIG), had published a report entitled “Usage and Documentation of Home Oxygen Therapy.” It detailed the purpose, background, and findings of a series of beneficiary and supplier surveys conducted to determine if supplier documentation accurately reflected beneficiaries’ medical needs and reported use of home therapy. According to its findings:

1. Nearly one quarter of CMNs for oxygen therapy reviewed by the surveyors were inaccurate or incomplete.
2. While almost all of the beneficiaries surveyed used their stationary equipment, 13% reported never using their portable oxygen system.
3. Suppliers reported providing services but were unable to fully document all of these services.

As a result of the report’s findings and recommendations, the Centers for Medicare & Medicaid Services (then called the Health Care Financing Administration) commented, and the OIG concurred, that “portable oxygen systems might prove to be a fruitful target for focused medical review.”

A clear picture of audit expectations began to emerge. The types of errors (or deliberate omissions) found on the CMNs reviewed in the study indicated the following trends:

1. Portable oxygen was not listed on numerous CMNs reviewed.
2. The hard copy of the CMN was incomplete.
3. The hard copy of the CMN did not match the electronically transmitted CMN.
4. Laboratory test results recorded on the CMN did not match the actual test results submitted to the OIG for review.

The review of claims for portable oxygen systems also indicated a problematic pattern. On many claims, suppliers were unable to produce documentation to substantiate portable refill activity and equipment service visits.

Protecting your payments
If one assumes these types of problems will be among the first auditors look for when reviewing portable oxygen claims, it is a good idea to check your claims for similar problems.

First, it may sound elementary, but a CMN should always be reviewed for accuracy and compliance before a claim is submitted for payment. Equipment and supplies delivered to the beneficiary must match and include all items entered in Section C of the CMN. If portable oxygen is not listed on the CMN, you must wait to submit the claim for portable oxygen until you receive a corrected CMN.

Review all electronic CMNs just as carefully as you do for paper CMNs. It is a prudent practice to maintain a printed copy of electronic CMNs in the beneficiary file since this can facilitate quick reviews during self-initiated compliance audits.

Obtain copies of laboratory test results and compare them to the results entered on the CMN to verify that the results were reported accurately. Waiting to obtain the laboratory results until you receive a postpayment audit request may place you at risk for overpayments.

Also, do not neglect documentation for portable refill deliveries and equipment services. The documentation required to substantiate a portable refill or equipment service is the good old-fashioned delivery ticket. Every time portable refills are delivered to a beneficiary, you must obtain a delivery ticket that has been signed and dated by the beneficiary or the beneficiary’s authorized representative.

The ticket documents proof of delivery and substantiates continuity of service. Although you may use a different form other than a delivery ticket to document equipment service practices, whatever form is used must be signed and dated by the beneficiary. Without signed documentation, you cannot prove to auditors that you actually delivered the portable refills and/or equipment services you claimed to.

If you determine either through continuing lack of need for portable refill delivery or through direct notification from the beneficiary that he or she is no longer using the portable system, you should immediately ask the physician to order the discontinuation of the system. Drop claims for reimbursement of the portable system immediately.

Implementation of a consistent in-house review process that includes a comprehensive CMN review (hard copy and electronic version), coupled with a review of laboratory test results and delivery tickets, is a relatively painless and inexpensive process that can pay for itself in the first audit request.

Helen M. Farrell is a consultant for Medical Accounting and Reimbursement Services (MARS), Chesapeake, Va. Contact MARS at (757) 410-1732.