OIG to CMS: Take stronger look at 'place-of-service' claims

WASHINGTON - CMS's edits didn't detect $18.4 million in payments in 2015 for inappropriate claims for DME provided during non-covered stays in skilled-nursing facilities, according to a report from the Office of Inspector General.

This represents 6% of all payments for DME during non-covered stays in SNFs, the OIG says.

CMS uses two edits that are designed to identify and reject such claims, but neither edit rejected the claims because SNFs and DME suppliers did not submit full and accurate information required for processing, according to the OIG.

The report found:

• For 72% of inappropriate claims, DME suppliers failed to correctly code the SNF as a facility. Instead, they coded the place of service as the beneficiary's home, thus enabling the claims to bypass the edit that rejects separate payment for most DME provided at facilities. By definition, SNFs provide primarily skilled care and thus cannot be considered beneficiary homes.
• For 98% of the inappropriate claims, SNFs did not submit “payment bills,” which are administrative claims that document the dates of non-covered stays and do not result in payment. No-payment bills enable another CMS edit to identify non-covered stays and reject claims for DME provided during those timeframes.

CMS may have also allowed up to $3.7 million in Medicare payments for inappropriate claims for DME provided during stays in Medicare-only nursing facilities.

The OIG recommends that CMS 1.) strengthen oversight of place-of-service codes by developing a process to determine whether DME claims with “home” as the place of service fit the circumstances permitting separate payment; 2.) assess the costs and benefits of strengthening oversight of no-payment bills by developing a process to identify non-covered stays when SNFs do not submit no-payment bills; and 3.) assess the costs and benefits of collecting and maintaining information regarding the level of care provided by Medicaid-only nursing facilities.

CMS concurred with the OIG's recommendations.