There are only a few items in the 2007 OIG work plan, but providers of CPAP, diabetes products, and more should be aware of issues that remain top enforcement priorities.

The recently released 2007 Office of Inspector General (OIG) Work Plan should look familiar to anyone following the DME industry. The plan provides information concerning the OIG's road map for enforcement and other projects during 2007.

MEDICAL NECESSITY

Just like in 2006, the OIG plans to review certain DME, including power wheelchairs, wound care equipment and supplies, and orthotics. Diabetic supplies have been dropped from the 2006 list. The focus will continue to be on whether the supplier's documentation supports the claim, whether the documentation supports the medical necessity for the product in question, and whether the beneficiary actually received the item in question.

MEDICARE PRICING

The OIG will again review Medicare payment rates for DME. The purpose of this review is to compare the payment rates with other federal and state health care programs, as well as with wholesale and retail prices in the industry. The OIG's review will specifically include wheelchairs, parenteral nutrition, wound care equipment and supplies, and oxygen equipment and supplies.

THERAPEUTIC FOOTWEAR

Medicare payments for diabetic footwear will continue to be under scrutiny by the OIG in 2007. Medicare payments for diabetic footwear totaled more than $130 million in 2003 according to the work plan. The OIG believes that medical documentation for diabetic footwear is inadequate in many cases. Suppliers of diabetic footwear should expect that requests for documentation and potential payment audits will continue to increase in 2007, and follow the trend of increased scrutiny seen in 2006.

What about DME payments for beneficiaries receiving home health services? Once again, the OIG plans to review medical records for DME items and supplies furnished to beneficiaries receiving home health agency services to determine whether the items and supplies are reasonable and necessary for the beneficiary's condition. Suppliers should continue to carefully scrutinize records for products provided to patients who are receiving home health services to verify that their products are in no way duplicative of the home health services being provided.

ZX, KX, AND KS MODIFIERS

One new item from the work plan concerns the use of ZX, KX, and KS Modifiers. The OIG will study the use of modifiers to determine whether DME suppliers appropriately billed Medicare. Reviews by the regional carriers found that suppliers had little or no documentation to support their claims, and should not have used modifiers indicating that the suppliers had documentation on file, or could provide documentation upon request.

One item not carried over from 2006 is a specific provision focusing on diabetic testing supplies and glucose monitors. Although the work plan does not make this an enforcement priority, suppliers are likely to continue to see audits in this area for several months.

POLYSOMNOGRAPHY

Clay Stribling, JD

As part of the work plan, the OIG indicated that it will initiate a study into the dramatic rise in Medicare reimbursement for polysomnography. According to the OIG, Medicare reimbursement for polysomnography increased from $62 million in 2001 to $170 million in 2004. The work plan indicates that the study's purpose will be to examine the appropriateness of services billed to Medicare.

Although the reimbursement for polysomnography is not an issue for DME suppliers, many DME suppliers either joint venture with sleep laboratories or provide CPAP to patients qualified by such laboratories. Reimbursement for polysomnography will be under intense scrutiny in 2007. All claims submitted for sleep tests and CPAP should be reviewed to verify the quality of the documentation and the appropriateness of CPAP for the patient.

GENERAL PROVISIONS

• Legal Counsel: The OIG coordinates its role in the resolution of civil and administrative health care fraud cases through its Office of Counsel. As a part of the work plan, the OIG outlines the priorities for 2007 for the Office of Counsel to the Inspector General. During 2007, the Office of Counsel will concentrate on the following issues:
• Resolution of False Claims Act cases and negotiation of corporate integrity agreements. As always, the Office of Counsel will work closely with the OIG and the Department of Justice to develop and pursue False Claims Act cases against companies charged with defrauding the government. Quite often, the OIG requires the companies, as part of a settlement, to enter into corporate integrity agreements to ensure that the companies remain in compliance with the federal health care program requirements.
• Corporate Integrity Agreement Monitor: The OIG continues to assess the compliance of providers that are under corporate integrity agreements to verify that such suppliers follow the provisions closely. As part of this initiative, the OIG conducts site visits to entities that are subject to corporate integrity agreements to confirm that the information submitted is accurate and correct.
• Advisory Opinions and Fraud Alerts: The OIG continues to issue formal advisory opinions and fraud alerts related to the application of the antikickback statute and other fraud and abuse statutes to particular business arrangements or practices.
• Program Exclusion: The OIG continues to review and implement the exclusion of several thousand providers from participation in federal health care programs. In addition to monitoring those excluded from the program, the OIG affirmatively initiates program exclusions against individuals and entities that submit false or fraudulent claims, fail to provide services in conformity with professionally recognized standards of care, or engage in conduct actionable under the Social Security Act or other statutes authorizing exclusion by the OIG.

Clay Stribling, JD, is an attorney with the Health Care Group of Brown & Fortunato PC, an Amarillo, Tex-based law firm. Stribling represents DME companies, pharmacies, and other health care providers throughout the United States and Puerto Rico. He can be reached via e-mail: .