Corporate Compliance

Medicare pays over $33 million in invalid supply and equipment claims

Healthcare Auditing Weekly, February 17, 2009

Medicare allowed over $33 million in payments for medical equipment and supplies claims submitted with invalid unique physician identification numbers (UPINs) and national provider identifiers (NPI) in 2007, according to an OIG report.

CMS began using UPINs following the Consolidated Omnibus Budget Reconciliation Act of 1985. The Administrative Simplification provisions of HIPAA required CMS replace UPINs with NPI for Medicare claims processing. Up until May 2008, CMS allowed providers to submit equipment and supply claims that included UPINs only, NPIs only, or a combination of both. As of May 23, 2008, CMS requires suppliers to include their own NPIs in the primary provider field on claims, and the referring physician’s NPI in the secondary provider field.

The OIG report shows Medicare allowed claims with invalid referring physician UPINs, which totaled totaling $6.1 million. They also allowed $28 million in claims with inactive referring physician UPINs—$5 million in claims included UPINs for deceased physicians. 

Medicare also allowed over $300,000 in claims with invalid referring physician NPIs.

The OIG made several recommendations to CMS to improve the way they process equipment and supplies claims, and prevent further payments for invalid and/or inactive UPINs and NPIs. Recommendations include:

  • Determining why CMS continues to pay claims with identifiers of deceased physicians
  • Implementing claims-processing system changes to ensure NPIs for both referring physicians and suppliers listed on claims are valid and active
  • Emphasizing to suppliers the importance of using accurate NPIs for both referring physicians and supplier when submitting Medicare claims

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