DME suppliers: Internal audits are in order.
From 2014 through 2021, the Centers for Medicare & Medicaid Services (CMS) identified high improper payments for urological supplies, including urinary catheters, according to an audit report posted Feb. 6. by the Office of Inspector General Office. In the February report, the OIG concluded that Medicare has been improperly paying suppliers for intermittent urinary catheters for some time and has made millions of improper payments.
What the OIG Found
The OIG audited Medicare claims for catheters from July 2021 through June 2022 and found that 88 of 105 sample items met requirements. For the remaining 15 sample items, medical records did not support the patients’ eligibility for curved-tip catheters or sterile catheter kits, or suppliers did not meet Medicare requirements for catheter refills, proof of delivery, or a standard written order.
That doesn’t sound like much, but consider this: Medicare paid out $303.3 million for catheters and kits during the audit period. That means approximately $35.1 million (11.6 percent) was improperly paid to suppliers, according to the OIG’s estimations. The OIG also found that suppliers billed 125,426 claims for curved-tip catheters in 2023 compared with 2,753 claims during the audit period, just one year earlier.
Medicare Coverage Requirements for Intermittent Catheters
Intermittent urinary catheters are covered under Medicare Part B for people who have permanent urinary incontinence or permanent urinary retention.
For each episode of covered catheterization, Medicare will cover:
- One catheter (A4351 for a straight-tip catheter or A4352 for a curved-tip, or Coude-tip, catheter) and an individual packet of lubricant (A4332); or
- One sterile intermittent catheter kit (A4353) if additional coverage criteria are met. Requirements for billing A4353 are provided in the local coverage determination (LCD) for urological supplies (L33803).
The healthcare provider must indicate in the medical record the patient’s inability to use a straight-tip catheter to support medical necessity of a curved-tip catheter. The OIG’s audit found that in 10 of the 15 flagged sample items, medical records didn’t support the patients’ eligibility for curved-tip catheters or sterile catheter kits.
General Documentation Requirements
Suppliers must meet the following requirements for billing urological supplies:
- Have a standard written order by the patient’s healthcare provider.
- Be able to submit medical record information at request.
- Submit correct coding.
- Have proof of delivery.
The LCD for urological supplies was revised in 2024 to clarify coverage indication, limitations, and/or medical necessity. The revisions mainly pertain to refills: The supplier must receive “and document an affirmative response” for refills from the patient or caregiver; contact with the patient regarding refills must take place no sooner than 30 calendar days prior to the expended end of the current supply; and the supplier must deliver the product no sooner than 10 calendar days prior to the expected end of the current supply.
The OIG’s audit found that in 7 of the 15 flagged sample items, suppliers didn’t meet the Medicare requirements for catheter refills, proof of delivery, or a standard written order. That should be a cause for concern for suppliers.
CMS Plans to Recover Overpayments
CMS stated that it will direct the Durable Medical Equipment Medicare Administrative Contractors (DME MACs) to recover the overpayments the OIG identified, consistent with relevant law and the agency’s policies and procedures. CMS also stated that it will notify the DME MACs of the OIG’s audit so that they may evaluate the risk associated with these claims as part of their annual Improper Payment Reduction Strategy.
