Medicare loses $3.2B from DMEPOS improper medical billing — 8 key points

Council for Medicare Integrity found Medicare is losing billions due to improper medical billing for durable medical equipment, prosthetics, orthotics and supplies, according to RevCycle Intelligence.

Here are eight key points:

1. In 2015, Medicare had a 40 percent improper payment rate for DMEPOS, resulting in $3.2 billion losses.

2. The DMEPOS billing error rate is nearly three times higher than the national Medicare fee-for-service improper payment rate (12 percent).

3. Insufficient documentation is the most common DMEPOS billing error and accounted for $2.6 billion in Medicare losses.

4. Hospital bed/accessories had the highest improper rate at 65.3 percent. Manual wheelchair claims were overbilled 81.3 percent of the time while surgical dressing claims were overbilled 72.5 percent of the time. Oxygen equipment and accessories had a 48.5 percent improper payment rate and respiratory assist devices had a 68 percent improper rate.

5. The report found podiatrists were the most responsible for improper billing and overbilled nearly 67 percent of the time.

6. The reported projected pharmacy providers that billed for DMEPOS had an improper payment amount of more than $700 million.

7. Each year, Medicare loses more than $60 billion to erroneous billing, leading Congress to implement the Recovery Audit Contractor. The program identifies and returns improperly billed Medicare funds back to the Trust Fund.

8. Due to the excessive amount of DMEPOS improper payments, CMS opted to "pull this category out of its regional auditing structure and create a fifth auditing area devoted solely to looking at DMEPOS claims."

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