DME groups blast HCFA’s recently released draft compliance program


HHBR Washington Correspondent

WASHINGTON – The National Association of Medical Equipment Services (NAMES; Alexandria, VA) and the Health Industry Distributors Association (HIDA; Alexandria, VA) last week leveled sharp criticism in response to the Department of Health and Human Services (HHS; Washington) Office of Inspector General’s (OIG) draft compliance program for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) published Jan. 28. The two groups outlined a convincing case that the OIG badly exceeded its charter in developing the draft compliance by ignoring existing Medicare law.

While NAMES said it supports the development of a compliance program for the DME industry and credited the OIG with incorporating many of the suggestions made in its initial comments last year, it also cited "a number of areas" where the OIG overstated the requirements of current federal regulations pertaining to Medicare.

In support of this contention, NAMES cited repeated examples where the draft goes "far beyond" what is required of suppliers under current federal statutes, regulations, and manual provisions and said the OIG "should clearly identify those suggested supplier practices that do not reflect actual supplier obligations." For example, NAMES pointed out that the OIG states DMEPOS supplier billing agents may only receive payment based on a fixed fee without specifying that this restriction applies only to billing arrangements under which reimbursement is made directly to the billing agent.

NAMES also included numerous other inconsistencies addressing areas such as inappropriate incentives, independent sales representatives, cover letters, supply closets, training programs, and qualifying tests for oxygen therapy. With regard to oxygen and oxygen equipment, NAMES pointed out that while the OIG’s recommendation that suppliers have independent physiological laboratories submit all raw test results to the ordering physician "may be a good clinical practice," there is no requirement for suppliers to send raw test results to the treating physician.

HIDA’s comments echoed this same theme. While correctly noting that the OIG’s draft compliance program for DMEPOS is "far more detailed" than prior guidance documents issued by the OIG for clinical labs, hospitals, home health agencies, and third-party billers, HIDA said its primary concern is that the OIG has "apparently taken liberties to offer its own interpretations" of federal regulations or statutes concerning supply closets, advanced beneficiary notices, CMN cover letters, fax CMNs, and supplier billing agents.

"It is premature and presumptuous for the OIG to offer its assumptions and interpretations of Medicare rulings, guidance, or regulations not yet issued by HCFA," HIDA asserted, "especially given that the OIG’s proposed interpretations often conflicts with prior rulings or statements issued by the Medicare carriers and HCFA."

HIDA points out, for example, that all four durable medical equipment regional carriers (DMERC) issued notices in December 1997 prohibiting suppliers from placing medically necessary items and services in "supply closets" to facilitate a beneficiary’s discharge from a hospital or physician’s office, but notes that HCFA later declared these prohibitions unenforceable, and they were withdrawn by the DMERCs. The OIG, however, included language in the draft compliance program that mirrors the rescinded DMERC prohibition.

NAMES added that it is "extremely concerned" about the OIG’s expectation that all suppliers, regardless of size, would be expected to meet the objectives for all the extensive policies and procedures contained in the draft. "The final guidance should focus on the need to adopt policies and procedures to address major compliance objectives," argued NAMES, "but it should leave it to the supplier to determine how best to accomplish these objectives."