The DME MAC contractor for Jurisdictions B and C recently began prepayment reviews for DME claims submitted with the GW modifier. The audit project is likely a response to an OIG report suggesting Medicare overpaid for DME provided to hospice patients, and we worry DME MACs are poised to deny most claims.

Next Episode: Thursday, June 20, 2024

What is Medicare’s GW Modifier?

Suppliers use the GW modifier to indicate billed items and services are for hospice beneficiaries but unrelated to their terminal diagnosis, the incurable illness from which they are not expected to recover. While Medicare payments made to hospice providers include all care related to a patient’s terminal diagnosis, items and services provided to treat unrelated diagnoses are separately payable.

Is this action based on a flawed OIG report?

In a November 2021 report, the Office of Inspector General (OIG) estimated that Medicare overpaid suppliers $117 million for DME provided to hospice beneficiaries. Educational materials published since then suggest Medicare expects hospice providers to take responsibility for substantially all DME for patients in their care. They presume instances where DME is separately payable for hospice patients are “exceptional and unusual.”

We believe the OIG conclusions are based on flawed audit techniques.

The OIG based its findings in large part on surveys completed by hospice nurses. The survey asked responding nurses to report if their patient needed DME equipment. The OIG equated “yes” answers to evidence the DME items were properly includable in the hospice rate and not separately payable.

The survey did not ask, however, if the need arose from the patient’s terminal diagnosis. Meaning, the nurses were only speaking to if the patient needed the DME, not why they needed it … an important distinction in determining proper reimbursement.

How can DME suppliers protect themselves from erroneous prepayment denials related to the GW modifier?

It is critical DME suppliers and hospice providers both understand what DME items are related to the patient’s terminal diagnosis. We believe CMS’s Patient Notification of Hospice Non-Covered Items, Services, and Drugs form is an excellent opportunity to establish clarity between DME suppliers and hospice providers. While the form is voluntary, DME suppliers can ask hospice providers to complete it and provide a copy to both the patient and the supplier. For more information on how to use the form effectively, check out our segment in the April 2023 edition of (K)notes.