Federal Reports

CMS has expressed concerns about the recent substantial increase in Medicare billing for noninvasive pressure support ventilators. Ventilator technology has evolved so that it is possible for a single device to treat numerous conditions by operating in several different modes-i.e., basic continuous positive airway pressure (CPAP) mode, respiratory assist device (RAD) mode, and traditional ventilator mode. Medicare covers ventilators and RADs for similar respiratory diagnoses, but the selection of the appropriate device is based on the severity of the beneficiary's condition. RADs are covered for beneficiaries with less severe conditions, whereas ventilators are covered for more severe conditions. CPAP devices are covered for the treatment of obstructive sleep apnea. The emergence of this multimodal device, when combined with Medicare coverage and payment policies that favor reimbursement for ventilators, may create incentives for suppliers to provide and bill for a ventilator when the device is actually being used as a RAD or CPAP device.

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At the request of TVA Supply Chain, the OIG examined the cost proposal submitted by a contractor, for engineering, design, and construction support for Holistic Industrial Wastewater Treatment Program services at TVA fossil plants. Our objective was to determine if the cost proposal was fairly stated for a planned $45 million contract. In our opinion, the cost proposal was overstated. We estimated TVA could save about $3.68 million on the planned $45 million contract by negotiating reductions to the proposed labor markup rates, including labor markup rates for work performed at TVA sites, and negotiating reductions to the proposed escalation rate and fee rate. In addition, we found the contractor did not propose labor wage ranges for cost reimbursable work, as required by the request for proposal. We also identified compensation terms in the draft contract that needed to be revised to reduce the potential for future billing discrepancies.(Summary Only)