OIG ouch!

Providers in the HDMS peer community have been sharing with us that TPE & SMRC audits for diabetic testing supplies are rolling in. The second major wave in TPE audits focused on a large look back period, many providers may still be dealing with the first wave from pap supply TPE letters. While these letters appear as a slight breeze, be aware that a major tsunami may be in the forecast. 


Making Wind

The Office of the Inspector General (OIG) has a work plan to review specific areas of payment. An example of this was a project posted in October of 2019, described as  "Supplier compliance with Medicare requirements for replacement PAP supplies". Sharing the results of this project, OIG indicates they reviewed a sample of 110 claims, and 86 of them did NOT meet Medicare requirements.

From this specific set of 110 sample claims reviewed, the over payment only totaled $13,414; but then the OIG calculates what those 86 incorrectly paid claims represents over the whole body of paid PAP supply claims, and comes up with an extrapolated total of $631.3 MILLION. Time to go fishing.


Why this storm is especially brutal...

Unlike audit practices in previous years, the example used in the project above is similar to what the individual provider can experience. OIG recommended that CMS Contractors reach out to the providers of the 86 overpaid (aka paid in error, payment not supported) claims from the initial project. These 86 claims were submitted by 82 individual providers. Refund a specific claim? No problem. The rub comes in the incredibly laborious recommendation to "review pap supply claims from the past 6 years and return over payment within 60 days". Go fish.

The audit seems like a weekend without power that screws up your freezer stock, compared to the extrapolation game that shuts your business down and moves you into FIMA housing.

Kelley Medical is a great example. Their 76 of 100 claims that were found not to comply with Medicare requirements was survivable, at $76K. It's the extrapolation, at $4M that changes the game.


What's next?

Get ready for Hurricane Albuterol  (Inhalation Drugs)  and Tropical Storm PMD Repairs.


In summary:

  • Take all of your TPE, SMRC, and OIG mail very seriously.


  • Review our tips for how to easily access a claim sampling for review. Be proactive.


  • Attend every meeting you can about audits to stay in the know!


  • If the OIG is involved, protect your business by looping in your legal council.