OIG Identifies Unallowable Medicare Payments

According to the Office of Inspector General (OIG), Liberty Medical, LLC, did not always comply with Medicare requirements when billing for certain drugs and the OIG has asked that they refund Medicare contractors almost $50,000 in estimated overpayments.

“Of the 100 claim lines in our sample, 94 complied with the requirements; however, the remaining 6 claim lines did not comply with the requirements,” the OIG said.

The OIG explained that Liberty did not provide medical records for four claim lines and did not have adequate proof-of-delivery documentation for two claim lines, which resulted in Liberty receiving $2408 in unallowable Medicare Payments. Further, based on sample results, the OIG estimates that Liberty received roughly $47,526 in unallowable Medicare payments for inhalation drugs.

According to the OIG, “These overpayments occurred because Liberty’s policies and procedures and its order-processing system were not adequate to ensure that it met Medicare requirements for billing inhalation drugs.”

The OIG has recommended that Liberty:

• refund Medicare contractors the $47,526 in estimated overpayments for inhalation drugs;
• exercise diligence to identify and return any additional similar overpayments outside of the audit period and identify any returned overpayments as having been made in accordance with this recommendation;
• strengthen policies and procedures to ensure that it can provide medical records for inhalation drugs when requested; and,
• improve the order-processing system to maintain adequate proof-of-delivery documentation.

Based on OIG audit, Liberty disagreed with both the findings and recommendations.

“Although Liberty disagreed with our recommendations, it provided information on actions that it had taken or planned to take to address our second, third, and fourth recommendations.”

The OIG explained that they did not revise the first finding because the information contained directly in the medical record is the source required to justify payment and must be made available upon request. However, based on documentation from Liberty, the OIG revised the second finding to reflect that there was inadequate proof-of-delivery documentation for two sampled claim lines and adjusted the refund amount in our first recommendation.

—Julie Gould

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