Medicare contractor overpaid $39M for diabetic supplies

An administrative contractor for the Medicare program allowed nearly $40 million in overcharges for diabetic supplies in 2007, according to a recent report from Office of Inspector General (OIG) of the U.S. Department of Health and Human Services. .

Hingham, Mass.-based NHIC, Corp. "inappropriately allowed" for the payment of home blood-glucose test strips and lancets for high-claim Medicare patients. NHIC provides Medicare oversight over 24,000 durable medical equipment suppliers in 11 eastern states and the District of Columbia.

The OIG found that NHIC failed to request the appropriate documentation from Medicare-enrolled durable medical equipment suppliers, which included vetting patient medical records and ensuring the patient had been examined by their physician within the previous six months.

In an audit of 100 cases where NHIC approved Medicare payments, 70 claims did not have appropriate documentation, according to the OIG report.

Overall, the OIG concluded that of the $49.2 million in claims made on behalf of heavy users of diabetic supplies, NHIC made overpayments totaling $39.2 million. That represents 17.5 percent of the total $225 million in diabetic equipment billings NHIC allowed in 2007.

The OIG recommended that NHIC implement prepayment reviews of suppliers with high claims, and that it work closely with the Centers for Medicare and Medicaid Services to better identify high utilization claims.

For more:
- read the OIG report

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