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Audit (A-09-13-02032)

Results of Reviews at Three Suppliers of Diabetic Testing Supplies

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For calendar years 2010 and 2011, three selected suppliers submitted claims for diabetic testing supplies without the KL modifier in accordance with Medicare requirements. The three suppliers used company-owned vehicles to deliver diabetic testing supplies to Medicare beneficiaries, which during our audit periods did not meet CMS's definition of "mail-order item." This definition allowed the suppliers to bill Medicare for non-mail-order supplies when they had delivered supplies in company-owned vehicles and to receive a higher reimbursement. If CMS's definition of "mail-order item" had included supplies delivered in company-owned vehicles and required the suppliers to claim them as mail-order supplies (i.e., with the KL modifier), we determined that Medicare would have paid approximately $4.7 million for the supplies rather than $8.2 million. In addition, we determined that the three suppliers did not routinely waive beneficiaries' coinsurance for diabetic testing supplies.

Office of Inspector General, U.S. Department of Health and Human Services | 330 Independence Avenue, SW, Washington, DC 20201