OIG Audit Reveals Medicare Compliance Issues with PAP Devices

An audit by the Department of Health and Human Services Office of Inspector General (OIG) revealed that payments for positive airway pressure (PAP) devices generally adhered to Medicare billing requirements. These devices, essential for treating obstructive sleep apnea, are monitored under the Medicare program due to their significant role in improper payment cases within the durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) category. The 2017 audit findings showed improper payments reaching $495 million, attributed to insufficient supplier documentation backing their claims.

The OIG's audit examined whether PAP device claims complied with Medicare regulations. Findings indicated correct payment for 97 of the claims sampled, while 13 claims failed to meet Medicare billing requirements due to missing documentation or unresponsive suppliers. These discrepancies underscore the need for robust regulatory compliance mechanisms to support Medicare billing procedures effectively.

In light of these findings, the OIG advanced recommendations to the Centers for Medicare & Medicaid Services (CMS). Although CMS reviewed these suggestions, it neither agreed nor disagreed explicitly with the first recommendation, noting the sample's lack of distinction between initial and replacement claims. CMS highlighted that documentation issues rather than systemic failures in automated claims processing were the core concern. Additionally, CMS agreed with the second recommendation, reinforcing its educational outreach initiatives, including webinars, in-person training, and Targeted Probe and Educate (TPE) reviews. New educational resources are being developed for the Medicare Learning Network, slated for 2025, to bolster documentation practices for PAP replacement devices.