What to Know About the Medicare Improper DMEPOS Payments

During a recent Office of Inspector General (OIG) report, it was discovered that Medicare improperly paid suppliers for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) items. The OIG has recommended the Centers for Medicare & Medicaid Services (CMS) identify and recover the improper payments, require suppliers to refund monies collected from beneficiaries and correct their system to detect future errors. 

Here’s What Happened 

Due to a system error, Medicare improperly paid DME suppliers for DMEPOS items. Those items should have been billed under Medicare Part A, not Part B.  When a patient needs DMEPOS items during a hospital or skilled nursing facility stay, the DMEPOS items are supplied directly by the facility, not a supplier. Medicare then pays the facility; no payments are made to the supplier. 

The improper payments occurred because the CMS system didn’t prevent or detect the overpayments. Read more about the OIG report findings here

Total Money Lost During the System Error 

In total, the OIG report showed that Medicare paid $34 million for DMEPOS items from a Medicare Part A stay. At the same time, Medicare beneficiaries were responsible for paying the Medicare Part B deductibles and coinsurance. Those DMEPOS supplies should have been under their Medicare Part A insurance. The OIG report showed that beneficiaries paid $8.7 million to suppliers for their DMEPOS items. 

If the Medicare system error never occurred, Medicare could have saved $223.1 million. In comparison, beneficiaries could have saved $56.3 million in deductibles and coinsurance. 

OIG Recommendations 

The OIG recommends CMS take the following actions to account for the improper payments from Medicare and the Medicare beneficiaries. 

Recover $34 Million 

Medicare should recover the $34 million in improper payments by following CMS’s policies and procedures.

Refund Beneficiaries

OIG recommends that suppliers refund any money collected from the beneficiaries. Beneficiaries should be refunded up to the $8.7 million from being incorrectly billed for Medicare Part B deductibles and coinsurance. 

The OIG recommends that CMS take any necessary action to require suppliers to refund the money. Including seeking legislative authority, if needed. 

Identify and Recover Money 

Medicare should identify any improper payments made to suppliers after their audit period.  

Correct CMS System Errors

All system errors must be corrected to prevent and detect any overpayments for DMEPOS items. System error corrections will ensure suppliers aren’t paid for items supplied during a hospital or skilled nursing facility stay. 

What DME Suppliers Should Know

Suppliers might be required to pay back any money they received from CMS (if the money was improperly paid). It’s important to note that CMS may not seek legislative authority requiring suppliers to pay back beneficiaries. CMS is considering right now whether to include that requirement in the President’s next budget.  

Stay Educated About DMEPOS Payments

DME suppliers should stay current on how to bill for DMEPOS items properly. Read this Medicare Learning Fact Sheet here for more information and resources on DMEPOS payments.

Stay Up-To-Date with Medbill 

Working with a trusted industry partner, like Medbill, will help you to better understand your DME billing requirements. Read here to learn how the Medbill DME billing company can help you and your team stay current DME billing. 

Contact us when you are ready to get started!