OIG Oxygen Audit Updates

In October 2024, the OIG announced a new oxygen audit titled “Medicare Payments to Suppliers for Oxygen and Oxygen Equipment.” According to the OIG, “For calendar year 2023, Medicare paid more than $674 million for oxygen and oxygen equipment. CMS has consistently identified high rates of improper payment for oxygen and oxygen equipment through its Comprehensive Error Rate Testing program.” Suppliers are required to provide documentation, including records from the treating practitioner, indicating that oxygen and oxygen equipment were reasonable and necessary for an enrollee’s condition (42 CFR § 410.38(d)(3)).

Suppliers have begun receiving requests, so be on the lookout if you are an oxygen provider. The claims are selected at random, and the audit is expected to be completed by 2026. If high error rates are found, the OIG’s recommendation generally includes additional oversight and more audits. The OIG might also recommend that CMS enforce the 60-day overpayment rule, which is not favorable for suppliers. Therefore, any request received must be handled with the utmost urgency and proficiency.

If you receive one of these requests, please notify Noel Neil, ACU-Serve Chief Compliance Officer as soon as possible at [email protected]. The OIG might reach out via email first to confirm the contact person/official information. The email subject may read “Department of Health and Human Services, Office of Inspector General – Confirmation of DMEPOS Contact Person/Official Information (OAS-24-09-012).” After the contact information is confirmed, the OIG will send the actual medical record request. According to the OIG, suppliers are selected at random.

Should you decide to handle the audit internally, here are some practical recommendations:

Always respond to the request ahead of the deadline. Follow up with the OIG auditor to confirm receipt if applicable.
Organize your response in an easy-to-understand format for the auditor. I would suggest including separator sheets to identify the documents submitted. For example, have a separator sheet with the word “Standard Written Order (SWO)” written on it followed by the actual SWO. The same for proof of delivery, oxygen saturation test, etc.
Understand the policy that was in effect when the oxygen was delivered. The oxygen policy was revised during the PHE and there was also non-enforcement of clinical indications. If any of these scenarios apply to your claim, clearly explain this to the auditor. The applicable criteria are based on when the oxygen was delivered, not necessarily the date of service audited. Below are some of the considerations:
- CMS non-enforcement of clinical indication effective for claims with dates of service on or after March 1, 2020, and for the duration of the COVID-19 Public Health Emergency (PHE). While PHE ended May 11, 2023, please note CMS issued post PHE guidance.
- Non-enforcement of CMNs and ultimately elimination via policy.
- Revised LCD eliminating chronic stable state requirement, making a pathway for acute coverage of oxygen and allowance for coverage for patients with cluster headaches out of a clinical trial.
- Signature waiver requirement

Here are some additional resources from the DME MAC:

If you have additional questions or concerns, please do not hesitate to contact Noel Neil directly at [email protected].