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In a recently released report titled Inappropriate and Questionable Medicare Billing for Diabetes Test Strips, the Office of Inspector General (OIG) found that in 2011, Medicare inappropriately allowed $6 million for diabetic testing strips (DTS) claims billed. The majority of these claims were for beneficiaries without a documented diagnosis code for diabetes, or overlapped with an inpatient hospital stay or an inpatient Skilled Nursing Facility stay. The OIG also found that $425 million in Medicare-allowed claims made by 10 percent of DTS suppliers had characteristics of questionable billing. Suppliers in 10 geographic areas nationwide were responsible for 77 percent of questionable billing. On the plus side, the Competitive Bidding Program, implemented in 2011, appears to have reduced questionable billing for mail-order DTS in Competitive Bidding Areas (CBA). Reductions in questionable billing did not occur in non-CBA areas for mail-order supplies or for non-mail order DTS.

Per the OIG report, in 2011 Medicare allowed approximately $1.1 billion to 51,695 suppliers for DTS provided to 4.6 million Medicare beneficiaries. Recent investigations, including RAC audits and prior OIG studies, have found that DTS is vulnerable to fraud, waste, and abuse. The Centers for Medicare & Medicaid Services (CMS) implemented the Competitive Bidding Program in 2011 to reduce payments for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) and to help reduce fraud and abuse. Mail-order DTS is included in the Competitive Bidding Program but non-mail order DTS currently is not.

In my August 20, 2013, Drill Down article titled Drill Down: Glucose Monitors Excessive Units Billed, we reviewed a RAC Region A audit issue for the same DME supplies. The audit issue reviewed was for excessive utilization of DTS. However, it referenced the Local Coverage Determination where the correct diagnosis codes were listed. One of the top issues found by the OIG on DTS claims is that no documented diagnosis codes for diabetes were found.

RAC issues for the week of September 2–September 6, 2013:

No new issues were posted on contractors’ websites.

About the Author

Dr. Margaret Klasa is the medical director for Context4 Healthcare. She is responsible for the company’s business knowledge discovery unit for medical context as it relates to the daily development of data products and software for medical claims editing and coding, with an emphasis on clinical and regulatory guidelines for Medicare, Medicaid and commercial payors.

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