DME suppliers have a target on their backs.

It is likely that they are subjected to the most frequent audits of any type of healthcare provider.

The CERT (Comprehensive Error Rate Testing) audits seem to be the most frequent.

Although DME represents a small percentage of expenditures on healthcare, in 2015 (the last year for which data is available), the improper payment rate was found to be 39.9 percent.

This was much higher than for inpatient hospitals (6.2 percent), physician/lab/ambulance (12.7 percent) and non-inpatient hospital facilities (14.7 percent).

The average for all improper payments was 12.1 percent, accounting for $43.3 billion. But the 39.9-percent improper payment amount for DME accounted for only $3.2 billion.

It is not uncommon for such a supplier to have fully one-third of their claims subject to a CERT audit. It takes approximately 90 days for an audit to be resolved, and until that time passes, the DME does not get paid.

The RAC audits are considered to be particularly troublesome. DME suppliers report a common pattern of RACs using local coverage determination (LCD) rules that do not match the time period for the claim. This happens because LCDs frequently are updated, sometimes twice per year. This is a common problem, but in order to get it corrected, a DME must go through the regular process of redetermination, reconsideration, then appeals to the Administrative law judge and Medicare Administrative Contractor. This requires the use of consultants, attorneys, and lots of staff to handle the paperwork.

The RACs make these completely irrational decisions because they do not use medical necessity to determine if a claim will be paid. This may distinguish the DME world from any other part of the healthcare community. Claims often are denied because the RAC claims that documentation is not sufficient.

For example, even though the patient has signed a delivery form acknowledging the receipt of the equipment, this is not always considered to be acceptable.

Another example: even if all of the paperwork is in order for a wheelchair, the claim may be denied unless someone has visited the patient’s residence and confirmed that the home or apartment is such that a wheelchair can fit through the doors.