01-011 DME Supplies in Non-Covered Skilled Nursing Facilities Notification of Review

 Noridian Healthcare Solutions, LLC, as the Supplemental Medical Review Contractor (SMRC) for the Centers for Medicare and Medicaid Services (CMS), is conducting post-payment review of claims for Medicare Durable Medical Equipment (DME) supplies in non-covered SNF stays billed on dates of service from January 1, 2017 through December 31, 2017. This notification includes the reasons for the review, documentation that will be requested in the Additional Documentation Request (ADR) letter, and resources providers/suppliers may wish to consult when submitting claims.

Background

In 2018, the Office of the Inspector General (OIG) in report (OEI 06-16-00380) titled “CMS Did Not Detect Some Inappropriate Claims for Durable Medical Equipment in Nursing Facilities,” identified potential inappropriate payments totaling approximately $18.4 million for DME during non-covered SNF stays.

The OIG report noted that for 72 percent of the potential inappropriate DME claims, the DME suppliers failed to correctly code the SNF as a facility. Instead, DME suppliers coded the place of service (POS) as the beneficiary’s home, thus enabling the claims to bypass the CMS edit that rejects separate payment for most DME provided at facilities. The report also noted that for 98 percent of the inappropriate DME claims, SNFs did not submit “no-payment bills,” which represent administrative claims that document the dates of non-covered stays and do not result in payment.

Reason for Review

CMS tasked Noridian, as the SMRC, to perform data analysis and review DME supplier claims for Oxygen and Oxygen Equipment during noncovered stays in SNFs billed with a POS code of “home”. Noridian will complete data analysis and review activities in accordance with applicable statutory, regulatory, and sub-regulatory guidance.

Claim Sample Detail

POS HCPCS
12: Location, other than a hospital or other facility, where the patient receives care in a private residence
  • E0431: Portable gaseous oxygen system, rental; includes portable container, regulator, flowmeter, humidifier, cannula, or mask, and tubing
  • E0443: Portable oxygen contents, gaseous, 1 month’s supply = 1 unit
  • E1390: Oxygen concentrator, single delivery port, capable of delivering 85 percent or greater oxygen concentration at the prescribed flow rate
  • E1392: Portable Oxygen concentrator, rental
  • K0738: Portable gaseous oxygen system, rental; home compressor use to fill portable oxygen cylinders; includes portable containers, regulator, flowmeter, humidifier, cannula, or mask, or tubing

Access related project details below.

Documentation Requirements

Below is a list of specific documentation requirements that will be included in each ADR to obtain the necessary documentation to perform the review.

  1. Detailed written order (DWO)
  2. Written Order Prior to Delivery (WOPD)
  3. Proof of delivery (POD) documentation
  4. Documentation to support coverage for place of service 12, representing the beneficiary’s home or residence to include but not limited to:
    1. Demographic sheet, showing the beneficiary as a resident of the facility
    2. List of non-Medicare certified beds in the facility where items and supplies were delivered
    3. List of Medicare certified beds in the facility where items and supplies were delivered 
    4. Room or bed assignment of the beneficiary during the dates of service 

References/Resources

  • Social Security Act (SSA), Title XVIII, §§1812(a)(2)(A). Scope of Benefits, Benefit Exhaust
  • SSA, Title XVIII, §§1819(a), 1919(a). Hospital Insurance Benefits and Requirements for Nursing Facilities
  • SSA, Title XVIII, §§1833(e). Payment of Benefits
  • SSA, Title XVIII, §§1861(a). Definition Spell of Illness
  • SSA, Title XVIII, §§1861(h)(5). Extended Care Services, Equipment
  • SSA, Title XVIII, §§1861(n). Durable Medical Equipment
  • SSA, Title XVIII §§1861(s)(6). Medical and Other Health Services
  • 42 Code of Federal Regulations (F.R.) §409.30. Basic Requirements Hospital Insurance Benefits and Nursing Facility
  • 42 C.F.R. §483.5. Definitions, Requirements for Long Term Care Facilities
  • 42 C.F.R. §483.15(c)(1)(i)(A)-(F). Admission, transfer, and discharge rights, Requirements Long Term Care Facilities
  • 42 C.F.R. §483.20. Standards and Certifications Long Term Care Facilities
  • 42 C.F.R. §424.57(c)(12). Proof of Delivery
  • CMS Internet Only Manual (IOM), Publication 100-02, Medicare Benefit Policy Manual, Chapter 8 – Coverage of Extended Care (SNF) Services Under Hospital Insurance
  • CMS IOM, Publication 100-02, Medicare Benefit Policy Manual, Chapter 15. Covered Medical and Other Health Services
  • CMS IOM, Publication 100-02, Medicare Benefit Policy Manual, Chapter 15, Section 110.1. Definition of a Beneficiary’s Home
  • CMS IOM, Publication 100-04 Medicare Claims Processing Manual, Chapter 6. SNF Inpatient Part A Billing and SNF Consolidated Billing
  • CMS IOM, Publication 100-04 Medicare Claims Processing Manual, Chapter 7. SNF Part B Billing (Including Inpatient Part B and Outpatient Fee Schedule)
  • CMS IOM, Publication 100-04 Medicare Claims Processing Manual, Chapter 20. Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS)
  • CMS IOM, Publication 100-04, Medicare Claims Processing Manual, Chapter 20, Section 110-110.3.1. Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS)
  • CMS IOM, Publication 100-04 Medicare Claims Processing Manual, Chapter 30.Financial Liability Protection
  • CMS IOM, Publication 100-08 Medicare Program Integrity Manual, Chapter 3, Section 3.2.3.3. Third Party Additional Documentation Request
  • CMS IOM, Publication 100-08 Medicare Program Integrity Manual, Chapter 4, Section 4.26-4.26.3. Proof of Delivery
  • CMS IOM, Publication 100-08 Medicare Program Integrity Manual, Chapter 5, Section 5.2.3. Detailed Written Order
  • Office of Inspector General (OIG) report OEI-06-16-00380 dated June 2018

Last Updated Oct 23, 2020