Urinary Catheter Fraud Is Impacting ACO DME Billing
If your billing department handles durable medical equipment (DME), you should stay tuned in to the actions of the Centers for Medicare & Medicaid Services (CMS) in the coming months and through next year. This is because fraud in DME billing has gotten increasing focus from the agency in 2024. An increased level of attention on DME in medical billing will be necessary even if you have low risk for fraud in your organization. Attention from CMS means that you should also have a goal of minimizing the appearance of fraud in your DME billing. ACOs Are on High Alert Accountable Care Organizations (ACOs) were the first to alert CMS on the issue of billions of dollars in DME fraud. It began with the National Association of ACOs (NAACOS) notifying the federal government after a review of data from CMS’ Virtual Research Data Center. They identified a sharp increase in payments under two DME billing codes [1]. The payments for urinary catheters jumped
an alarming amount from 2021 at just $153 million to $2.1 billion by 2023. This reflects an increase from 50,000 beneficiaries to 450,000 [2]. In response, CMS announced that it would hold ACOs harmless, excluding fraudulent claims from any shared savings calculations. Meena Seshamani, M.D., Ph.D., deputy administrator and director of the Center for Medicare responded to the issue. “I know that the DME fraud issue is front and center in all of your minds. We want to be able to partner and leverage that. We remind everyone of being able to contact the Center for Program Integrity (CPI) when there are concerns with anomalous billing that you all are seeing because where there can be anomalous billing that absolutely can affect the bottom line of shared savings” [2]. This was positive news for ACOs concerned about DME billing, since they receive payments for savings under Medicare Fee-for Services claims that are associated with ACO beneficiaries. These payments are contingent on the ACOs meeting quality performance standards and demonstrating savings when compared to a benchmark of expected average per capita Medicare FFS spend. Fraudulently billed claims, though, increase the per capita spend for an ACO’s assigned beneficiaries and in turn reduce the potential earnings in shared savings. CMS’ Response to Address DME Billing Fraud CMS reviewed the data and in response, issued a proposed rule to address the DME billing fraud issues, specifically for “significant, anomalous, and highly suspect (SAHS) billing” [3]. The rule only addresses SAHS DME billing activity for calendar year 2023. It is also limited to claims submitted under the following Healthcare Common Procedure Coding System (HCPCS) codes: ● A4352 (Intermittent urinary catheter; coude tip, with or without coating (Teflon, silicone, silicone elastomeric, or hydrophilic, etc.) ● A4353 (Intermittent urinary catheter, with insertion supplies) Claims for code A4352 increased by 163% compared to the previous year, and code A4353 increased by over 5,000% when compared to the prior year. CMS also released a plan to implement retroactive changes in how it calculates ACO shared savings and losses in DME billing services. It said that it planned to exclude from ACO expenditure and revenue calculations for 2023, all Medicare Part A and Part B payments for the associated billing codes for DME, orthotics, prosthetics, and supports claims for beneficiaries that are associated with an ACO. It also planned to exclude SAHS claims from FFS charges when calculating factors in the ACO application cycle for new ACO agreements for the period from January 1, 2025, in addition to ACOs that have a change request cycle to continue program participation in Performance Year 2025. But some have noted that the issue is more serious than CMS has described it. An executive of Palm Beach ACO added their input at the spring meeting of NAACOS. “Our ACO went from $62 million in shared savings – the most in the program – all the way down to $45 million due to $50 million of erroneous fraud. Starting in 2020 we submitted 39 submissions to CPI and the OIG. We submitted 800 signed patient attestations, but our providers paid for the fraud. It wasn't the trust fund. It
wasn't the taxpayers. It was our providers working hard in your programs. As a result, we had very embarrassing results” [2]. CMS’ Results Since being alerted of the issue, CMS has reported that their action has saved over $4.2 billion in payments since July 6, 2024. This includes stopping over 99% of payments to bad actors. The agency also reports that legitimate suppliers were unaffected and their work in providing services to Medicare beneficiaries in need was not interrupted [4]. The agency revoked enrollment of 15 bad actors and they can no longer bill Medicare for services and will not be able to re-enroll for up to 10 years. It also replaced hundreds of thousands of Medicare Beneficiary Identifiers (MBIs) that were involved in filing suspicious claims. It changed the MBIs for people most at risk. The agency is now working with law enforcement to identify and investigate other potentially fraudulent claims. Improving DME Billing With 3Gen Consulting DME billing services are becoming increasingly complex. For support in your DME billing and improving your revenue cycle results, tap into the in-depth knowledge of our professionals at 3Gen Consulting and schedule time to talk today.
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