OIG: NPI delay, fraud may be connected

WASHINGTON - Allowing HME providers to use their NPI numbers in the referring physician field represents a "claims processing vulnerability," according to a memo that the Office of Inspector General (OIG) sent to CMS this month.

A temporary provision allows providers to use their NPI numbers in the referring physician field.

"Although these payments were permissible, they represent a potential vulnerability because CMS's claims-processing systems did not verify that the equipment and/or supplies associated with these payments were ordered by an eligible physician as required," wrote Stuart Wright, the OIG's deputy inspector general for evaluation and inspections. "We found that Medicare paid a total of $87 million for medical equipment and supply claims with identical referring physician and supplier NPIs over approximately 16 months."

The temporary provision ends Jan. 3, 2011--a deadline, the OIG pointed out, that has been postponed twice. Providers were first supposed to start using physician NPIs two years ago.

In the memo the OIG pointed out that, of the $87 million in claims with identical provider and physician NPI numbers, $43 million corresponded to the same 10 HCPCS codes. Oxygen concentrators accounted for the greatest percentage of payments for claims with identical provider and physician NPI numbers at 10% or $8.85 million. No. 2, 3 and 4: various forms of diabetic shoe inserts.

Additionally, the OIG pointed out that 10 counties represented 19% of payments for claims with identical provider and physician NPI numbers.

"Three of the 10 counties include cities that have been identified as areas of significant Medicare fraud and in which Strike Force teams have been set up to combat fraud (Los Angeles, Houston and Detroit)," Wright wrote.

The OIG recommends that CMS determine the earliest date to end the temporary provision while maintaining beneficiary access.

The OIG's memo is based on a review of 100% of medical equipment and supply claims that CMS received from May 23, 2008, through Sept. 30, 2009, from the National Claims history File.

To read the whole memo: http://oig.hhs.gov/w-new.asp.