Recent trends show that once Medicare places a DME company on audit activity, including prepayment review of their documentation they will do the same DME Audit for any other company that the owner has an ownership interest in. There are providers trying to outpace

Medicare by opening new companies which is done in a valid way with a Medicare number, but that still doesn’t alleviate Medicare’s current DME audit protocol which is to look at the full ownership structure and patterns behind the practice regarding whether the documentation matches the coding and billing of that provider.

• DME Audit activity has rapidly arisen out of multistage activity and attempts to set up a telehealth delivery system for DME products.
• Many times, the system isn’t meeting individual state requirements or individual payor requirements for how the telehealth or telemedicine transactions are set up. Hence, the DME Audit.

Now that Medicare has shifted to the model of “Targeted Probe and Educate” a provider is more likely to receive a TPE Audit Letter relating to a specific set of CPT codes. Medicare would typically then request charts to investigate further whether there is a pattern of documentation or of usage that is not meeting Medicare guidelines.

If a provider is lucky enough to get only a TPE Letter they will actually end up receiving some very strong educational input from Medicare on how to correct any weaknesses in documentation and billing. In fact, a provider will receive up to three attempts to fix and if the pattern continues Medicare then refers it for a fraud investigation under the ZPIC system. Of course, if it’s a multi-state concern then Medicare does a UPIC Audit.

Providers who have received a DME Audit type letter really have an excellent opportunity to do an internal audit of their own system and make corrections on their own before Medicare determines from their own probe what issues may exist. Providers must take time to evaluate the documenting and handling of their own services amidst a DME Audit and as a best practice once the audit activity has concluded.

“Prevention and early detection is also important for the health of your revenue cycle.  Auditing is the quickest way to identify and address problem areas before they progress and become harder to cure”.