Wednesday, November 16, 2011

Misleading Medicare Data on Improper Payments for Home Medical Equipment Paints False Picture

The American Association for Homecare expressed dismay today that the Centers for Medicare and Medicaid Services’ (CMS) calculated a 61 percent improper payment rate for the home medical equipment sector for 2011. The 61 percent improper payment rate is significantly higher than the overall Medicare fee-for-service error rate, which is 8.6 percent for 2011.

Even though the improper payment rate is not a calculation of fraud, the rate is misunderstood and it casts an unwarranted cloud over the entire home medical equipment sector.

“The 61 percent error rate is preposterous,” said Tyler Wilson, president of the American Association for Homecare. “More than anything, the improper payment rate for HME reflects badly on Medicare. It highlights the inconsistent guidance provided by CMS and the subjective audit reviews by the Agency’s contractors. Without significant changes to the medical review process, the millions of Medicare beneficiaries who require home medical equipment will not receive what their physicians order. The agency must better educate physicians about documentation requirements and help to improve compliance without placing needless burdens on providers of home medical equipment.”

The Association has worked with CMS to lower the error rate through greater consistency in audit requests, Medicare coverage criteria, and education of both home medical equipment providers and physicians. However, the Association’s recommendations to the agency for reducing the error rate have been ignored.

CMS is required by law to estimate and report the improper payment rate through a random sampling of claims conducted by the Comprehensive Error Rate Testing (CERT) audit contractor. The CERT contractor evaluates claims to determine whether they were properly paid according to Medicare coverage, coding, and billing rules.

The American Association for Homecare represents providers of durable medical equipment. Members serve the medical needs of millions of Americans who require oxygen equipment and therapy, wheelchairs and mobility assistive technologies, medical supplies, inhalation drug therapy, home infusion, and other medical equipment and services in their homes. The Association’s members operate more than 3,000 homecare locations in all 50 states. Visit

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