CMS: NGS Inappropriately Paid $56.2 Million in 2007

In a report issued last week, the Centers for Medicare and Medicaid Services (CMS) states that National Government Services, Inc. (NGS), the durable medical equipment (DME) Medicare administrative contractor for Jurisdiction B, inappropriately permitted $56.2 million in claims for CY 2007 for home blood-glucose test strips and/or lancet supplies used for diabetics. Of this $56.2 million, $42.2 million of this amount was inappropriately paid to DME suppliers, all of which, according to CMS, could have been prevented had NGS had the proper controls in place to ensure the claims complied with Medicare’s documentation requirements. By way of brief background, typically, Medicare permits up to 100 test strips and 100 lancets per month for insulin-treated diabetics and every 3 months for non-insulin-treated diabetics. For high utilization claims–those claims that indicate a greater quantity–additional requirements apply.

CMS provided 3 recommendations to NGS to achieve potential savings for Medicare in the future:

1. Implement a system that identifies high utilization claims for test strips and/or lancets and work with CMS to develop cost-effective ways of determining which claims should be further reviewed for compliance with Medicare documentation requirements;

2. Implement a system that identifies claims for test strips and/or lancets that have overlapping test dates for a single beneficiary; and
3. When identifying DME suppliers with a high volume of high utilization claims, enforcing the Medicare documentation requirements for claims for test strips and/or lancets, performing prepayment reviews of those suppliers, and referring those DME suppliers to the Office of Inspector General (OIG) or CMS for review or investigation.

For more information, please contact Abby Pendleton, Esq., Adrienne Dresevic, Esq. or Carey F. Kalmowitz, Esq. at (248) 996-8510 or (212) 734-0128 or visit the HLP website.

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