Pneumatic Compression Devices Are in the Spotlight for 2024 Audits

Over the last several years, Medicare audits by the Centers for Medicare and Medicaid Services (CMS) have notably increased for durable medical equipment (DME). More significantly, pneumatic compression devices (PCDs) are at the forefront of Medicare coverage issues, especially within the last three years.

In fact, before the COVID-19 pandemic, PCDs were not mentioned anywhere within CMS’ annual Improper Payment Reports. Yet, from 2020 through 2023, PCDs suddenly ranked in the top three service types for durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) Improper Payment Rates. Per CMS’ Medicare Fee-for-Service Supplemental Improper Payment Data Reports, which included claims submitted during the 12-month period from July 1 through June 30 of the pertinent reportable fiscal years, PCDs had an improper payment rate of 76.4% in 2020,¹ 70.1% in 2021,² 75.1% in 2022,³ and 78.9% in 2023.⁴ Based on those rates, PCDs are certain to be a focus for 2024 audits.

Significantly, of those improper payment rates, errors related to insufficient documentation for PCDs remain steadfast, and there appears to be a recent trend toward medical necessity type of error. For the 2020 reporting period, insufficient documentation accounted for 100% of the improper payments for PCDs, and 2021 saw 96.8% due to insufficient documentation and 3.2% for other types of errors.^1,2 However, 2022 found 61.3% of improper payments due to insufficient documentation and 37.6% for medical necessity, with 1.0% for other types of errors; and 2023 listed insufficient documentation at 55.1%, medical necessity at 41.2%, and other types of errors at 3.7% for PCDs.^3,4

Why the sudden increase in PCD audits and why are medical necessity type errors for PCDs gaining traction?

The National Coverage Determination (NCD) 280.6 for PCDs was implemented over 20 years ago on January 14, 2002.⁵ The NCD describes PCDs as consisting of an inflatable garment for the arm or leg and an electrical pneumatic pump that fills the garment with compressed air. The garment is intermittently inflated and deflated with cycle times and pressures that vary between devices. The NCD states that PCDs are covered only when prescribed by a physician and when they are used with appropriate physician oversight; ie, physician evaluation of the patient’s condition to determine medical necessity of the device, assuring suitable instruction in the operation of the machine, a treatment plan defining the pressure to be used and the frequency and duration of use, and ongoing monitoring of use and response to treatment.

The determination by the physician of the medical necessity of a pneumatic compression device must include:

1. The patient’s diagnosis and prognosis;
2. Symptoms and objective findings, including measurements that establish the severity of the condition;
3. The reason the device is required, including the treatments that have been tried and failed; and
4. The clinical response to an initial treatment with the device.

The NCD further provides that PCDs are covered for the treatment of lymphedema or for the treatment of chronic venous insufficiency with venous stasis ulcers. PCDs are covered in the home setting for the treatment of lymphedema if the patient has undergone a four-week trial of conservative therapy and the treating physician determines that there has been no significant improvement, or if significant symptoms remain after the trial. The trial of conservative therapy must include use of an appropriate compression bandage system or compression garment, exercise, and elevation of the limb.

The DME Medicare Administrative Contractors (MACs) subsequently released PCD Local Coverage Determinations (LCDs) that narrowed Medicare coverage of PCDs, and after nearly two decades of minor disturbance, PCDs were thrust into the limelight.

A 2022 federal court decision⁶ ruled that a PCD LCD that was more restrictive than the NCD 280.6 was invalid because it conflicted with the NCD by imposing new legal obligations for PCD coverage for the treatment of lymphedema, as it authorized coverage “[o]nly when no significant improvement has occurred in the most recent four weeks,”⁷ making no reference to the phrase in the NCD 280.6 that permitted coverage when a treating physician determines that significant symptoms remained after the trial. Nevertheless, the current LCD, which was revised following the federal court decision, still includes numerous and conflicting documentation requirements for Medicare payment of PCDs.

More recently, Congress passed the Lymphedema Treatment Act (LTA),⁸ which was effective as of January 1, 2024. The LTA calls for Medicare to cover compression garments used to treat lymphedema, including standard-fit and custom-fit compression garments, as well as compression garments for each affected body part—not just for the arms and legs. Before the LTA, Medicare did not cover daily-use prescribed compression supplies, which are essential components for successful lymphedema treatment. The LTA amends § 1861 of the Social Security Act (42 U.S.C. § 1395x) to provide DME coverage for these prescribed compression supplies. However, the LTA covers compression supplies only, not services, and applies only for the treatment of lymphedema and not for other injuries or illnesses that may be treated with PCDs. Further, there is no retroactive coverage for compression garments or supplies purchased or ordered before January 1, 2024.

Given these headline changes to PCD coverage in recent years, it is no wonder that PCD audits have surged, and CMS findings of insufficient documentation and medical necessity type errors are sure to continue. While PCD coverage, at least for lymphedema treatment, seems to be expanding, the advancements place PCDs directly in the spotlight to be targeted in 2024 CMS audits.

Knicole Emanuel is a Partner at Nelson Mullins in Raleigh, NC. She has devoted more than 23 years to a health care litigation practice, with a focus on Medicare and Medicaid litigation, health care regulatory compliance, administrative law, and regulatory law.

Melissa Scott is an Associate at Nelson Mullins in Fort Lauderdale, FL. She focuses her practice on employment, healthcare, and commercial litigation.

References
1.    Centers for Medicare & Medicaid Services. 2020 Fee-for-Service Supplemental Improper Payment Data at p. 36. April 21, 2021. Accessed April 1, 2024.
 
2.    Centers for Medicare & Medicaid Services. 2021 Fee-for-Service Supplemental Improper Payment Data at p. 32. December 7, 2021. Accessed April 1, 2024.
 
3.    Centers for Medicare & Medicaid Services. 2022 Fee-for-Service Supplemental Improper Payment Data at p. 42. December 8, 2022. at p. 42. Accessed April 1, 2024.
 
4.    Centers for Medicare & Medicaid Services. 2023 Fee-for-Service Supplemental Improper Payment Data at p. 41. December 7, 2023. at p. 41. Accessed April 1, 2024.
 
5.    Centers for Medicare & Medicaid Services. 2002 NCD Pneumatic Compression Devices, Publication 100-3, Manual Section 280.6. January 14, 2002. Accessed April 1, 2024.
 
6.    Greenwald v. Becerra, No. 17-797, 2022 WL 2046108 (D.D.C. June 7, 2022).
 
7.    Centers for Medicare & Medicaid Services. 2015 LCD Pneumatic Compression Devices, L33829. October 1, 2015, Revised June 7, 2022 and October 22, 2023. Accessed April 1, 2024.
 
8.    Found within the Consolidated Appropriations Act, 2023, Pub. L. No. 117-328, § 4133, 136 Stat. 5919 (2022). Accessed April 2, 2024.