Dive Brief:

• The Department of Health and Human Services' Office of Inspector General is calling for CMS to include device-specific information on claim forms.

• The internal watchdog included the recommendation in the 2020 edition of its top ideas for reducing fraud, waste and abuse, arguing that the current system makes it hard to track costs incurred by recalled or prematurely failed medical devices.

• The OIG recommendation adds to momentum behind the idea over the past year as organizations such as the Accredited Standards Committee X12 have voiced support for the change.

Dive Insight:

OIG began pushing for changes to claim forms in 2017. Back then, OIG estimated Medicare spent $1.5 billion on services related to seven recalled or prematurely failed medical devices between 2005 and 2014. As claim forms lack a field for device-specific information, it is hard for CMS to track costs related to failed products. OIG argued adding device-specific information would save Medicare and beneficiaries money.

The report fed into work by X12 to update claim forms. The current version, which came into force in 2012, is due to be replaced by an updated form that X12 sought feedback on last year. Groups including The Pew Charitable Trusts and the Society of Thoracic Surgeons backed the addition of data specific to devices to the forms.  

OIG deemed the addition of device-specific information significant enough to include it on its 2020 list of the top 25 unimplemented recommendations for reducing healthcare fraud, waste and abuse. 

“CMS should continue to work with the Accredited Standards Committee X12 to ensure that medical device-specific information is included on claim forms and require hospitals to use certain condition codes on claim forms for reporting device replacement procedures,” OIG wrote.

While OIG sees clear benefits to including device identifiers on claim forms, CMS is still assessing the potential downsides to the change. OIG said CMS is reviewing its claims policy to determine whether adding device identifiers to claim forms “would impose any unnecessary burden on physicians.”

The second part of the OIG recommendation relates to the use of condition codes on claim forms to show that a procedure involving a replacement device was performed because of a recall or failure of the original product. Currently, hospitals only need to use the codes if they received a discount on the replacement device because of a warranty, recall or defect. 

If the change is enacted, OIG wants CMS to tell Medicare contractors to follow up with hospitals that submit certain claims featuring the codes to “determine whether an adjustment claim should be submitted.”

Also on the devices front, OIG recommended CMS works with Medicare contractors to ensure claims for replacement positive airway pressure device supplies are reviewed periodically. The recommendation follows a 2018 report that found taking remedial action against suppliers that consistently file claims that fall short of Medicare standards would have saved CMS $631 million in 2014 and 2015.