Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
Blood Glucose Test Strips: 
Inappropriate Medicare Payments 
JUNE GIBBS BROWN 
Inspector General 
JUNE 2000 
OEI-03-98-00230  OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, is to 
protect the integrity of the Department of Health and Human Services programs as well as the 
health and welfare of beneficiaries served by them.  This statutory mission is carried out through a 
nationwide program of audits, investigations, inspections, sanctions, and fraud alerts.  The 
Inspector General informs the Secretary of program and management problems and recommends 
legislative, regulatory, and operational approaches to correct them. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) is one of several components of the Office of 
Inspector General.  It conducts short-term management and program evaluations (called 
inspections) that focus on issues of concern to the Department, the Congress, and the public.  The 
inspection reports provide findings and recommendations on the efficiency, vulnerability, and 
effectiveness of departmental programs. 
OEI's Philadelphia Regional Office prepared this report under the direction of Robert A. Vito, 
Regional Inspector General, and Linda M. Ragone, Deputy Regional Inspector General.  Principal 
OEI staff included: 
REGION  HEADQUARTERS 
Robert Katz, Project Leader
 Stuart Wright, Program Specialist

Nancy Molyneaux, Program Analyst
 Barbara Tedesco, Mathematical Statistician

Cynthia Hansford, Program Assistant
 Linda Moscoe, Technical Support Staff

Lauren McNulty, Program Analyst
 Scott Horning, Technical Support Staff

Dave Tawes, Program Analyst

Amy Sernyak, Program Analyst

REGION IV 
John Mejia, Office of Audit Services 
To obtain copies of this report, please call the Philadelphia Regional Office at (800) 531-9562. 
Reports are also available on the World Wide Web at our home page address: 
http://www.dhhs.gov/progorg/oei  E X E C U T I V E   S U M M A R Y  
PURPOSE 
To assess the appropriateness of Medicare payments for blood glucose test strips by 
examining critical elements of this Part B benefit, including coverage requirements, 
supplier information and documentation, and beneficiary utilization. 
BACKGROUND 
Medicare covers home blood glucose monitors and test strips for beneficiaries who must 
periodically test their blood sugar levels as part of their diabetes management, regardless 
of insulin usage.  Prior to July 1, 1998, Medicare coverage was restricted to beneficiaries 
with insulin-treated diabetes.  Insulin-treated diabetics usually test their blood glucose 
levels one or more times a day.  Medicare allowances for test strips more than doubled 
between 1994 and 1997, increasing from about $102 million in 1994 to $220 million in 
1997.  Allowances exceeded $314 million in 1998. 
Suppliers of blood glucose test strips submit claims to the Durable Medical Equipment 
Regional Carriers (DMERCs) for processing and payment.  The supplier must have an 
order from the beneficiarys physician verifying medical need for blood glucose test strips. 
Suppliers signify that they have sufficient documentation to establish Medicare coverage 
of supplies for insulin-treated beneficiaries by appending a ZX modifier to procedure 
codes representing the supplies furnished. 
For this inspection, we collected data from a sample of Medicare beneficiaries with paid 
claims for blood glucose test strips in 1997 and the medical equipment suppliers who 
provided the supplies. 
FINDINGS 
Medicare allowed $79 million for blood glucose test strips with missing or flawed 
documentation.  $33 million in test strip claims had insufficient documentation to support 
eligibility.  An additional $46 million in claims had incomplete orders or no supplier delivery 
records. 
1
Blood Glucose Test Strips   OEI-03-98-00230  Irregular billing cycles make review of test strip claims difficult.  Such irregular 
cycles can make it difficult for DMERCs to identify overlapping claims, claims without correct 
supporting documentation, and claims containing excessive amounts of test strips. 
RECOMMENDATIONS 
To address the vulnerabilities identified in this report, we recommend that the 
Health Care Financing Administration: 
Alert suppliers of the importance of properly completed documentation to support 
their claims for test strips.  This effort should encompass physicians orders as well as 
supplier delivery documentation and documentation to support the medical necessity of 
quantities of test strips greater than 100 per month.  In addition, the use and meaning of 
ZX modifiers should be emphasized.  Further, HCFA should periodically review 
documentation to ensure that it exists and is accurate. 
Require suppliers to indicate actual and accurate start and end dates on claim 
forms.  This action would make it easier for DMERCs to determine the existence of 
aberrant or potential problems, such as overlapping claims or whether documentation is 
needed to support more than 100 test strips a month. 
Promote supplier concurrence and cooperation with the Office of Inspector 
Generals recently issued document entitled, Compliance Program Guidance for the 
Durable Medical Equipment, Prosthetics, Orthotics and Supply Industry.  Suppliers 
should be encouraged to establish and adhere to the voluntary compliance program to 
ensure that their operations meet the standards promulgated by the Office of Inspector 
General along with national health care organizations. 
Advise beneficiaries, as part of its outreach service, to report any instances of 
fraudulent or abusive practices (such as receiving excessive or unrequested 
deliveries of test strips) involving their home blood glucose monitors, test strips, or 
related supplies to their DMERCs. 
AGENCY COMMENTS 
The HCFA concurred with our recommendations.  The HCFA noted a number of initiatives that 
have reduced the incidence of improper payments in recent years.  To specifically address our 
recommendations, HCFA stated that (1) DMERCs will continue to stress the importance of 
properly completed documentation through a combination of published guidance in supplier 
manuals and bulletins and supplier education and outreach seminars, (2) in the 2001 Work 
Change Process, they will promulgate changes on claims forms to require actual and accurate 
start and end dates, (3) they will work with the National Supplier Clearinghouse to include 
2
Blood Glucose Test Strips   OEI-03-98-00230  language in the notifications sent to suppliers awarding them billing numbers to read and adhere 
to the OIGs Compliance Program Guidance for the Durable Medical Equipment, Prosthetics, 
Orthotics and Supply Industry, and (4) beneficiary outreach efforts will encourage the reporting 
of abusive supplier practices to the DMERCs.  The full text of HCFAs comments can be found in 
Appendix B. 
3
Blood Glucose Test Strips   OEI-03-98-00230  T A B L E  O F  C O N T E N T S  
PAGE

EXECUTIVE SUMMARY  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5

FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10

Medicare improperly allowed $79 million for test strip claims . . . . . . . . . . . . . . . . . . . .  10

Irregular billing cycles  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

RECOMMENDATIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13

APPENDICES

A: Estimates and Confidence Intervals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

B: Health Care Financing Administration Comments  . . . . . . . . . . . . . . . . . . . . . . . . . . 18

4
Blood Glucose Test Strips   OEI-03-98-00230  I N T R O D U C T I O N  
PURPOSE 
To assess the appropriateness of Medicare payments for blood glucose test strips by 
examining critical elements of this Part B benefit, including coverage requirements, 
supplier information and documentation, and beneficiary utilization. 
BACKGROUND 
Diabetes is an illness characterized by abnormally high glucose or sugar levels in the 
blood resulting from a deficiency of insulin.  Insulin is a hormone produced in the 
pancreas which regulates blood sugar levels.  When insufficient amounts of insulin are 
produced, serious health complications may result, including heart disease, blindness, 
kidney failure, and poor circulation in the lower limbs, which could lead to amputation. 
There are two main types of diabetes, Type 1 and Type 2.  People with Type 1 diabetes 
are dependent on insulin injections to regulate their blood sugar levels.  Generally, Type 1 
is diagnosed when patients are children or young adults.  Type 2, sometimes called late 
onset diabetes mostly affects adults over age 40.  Many Type 2 diabetics can manage 
their disease with lifestyle changes, such as special diets and exercise.  Approximately 16 
million people have diabetes in the United States.  It is the seventh leading cause of death. 
Health care personnel advocate self-monitoring as the key to successful diabetes 
management.  Diabetics are taught to use special devices called blood glucose monitors 
or meters to test their blood sugar levels.  Typically, patients place a tiny amount of 
fingertip blood on a test or reagent strip which produces a numeric read-out when 
inserted into the monitor.  Depending on the results of the read-out, patients can adjust 
their insulin dosages or contact their physicians for further instructions.  Patients usually 
test their glucose levels in this manner one or more times a day. 
Medicare Coverage of Home Blood Glucose Monitors and Test Strips 
Title XVIII of the Social Security Act prescribes coverage requirements under Part B of 
the Medicare program.  Part B covers services and items including durable medical 
equipment (DME).  Claims for home blood glucose monitors and test strips are covered 
under Part B within the DME benefit.  Suppliers submit claims for reimbursement to 
5
Blood Glucose Test Strips   OEI-03-98-00230  DME regional carriers (DMERCs).  The four DMERCs process all Medicare claims for 
prosthetics, orthotics, medical supplies, and other DME.  They are under contract with 
the Health Care Financing Administration (HCFA), the agency which administers the 
Medicare program. 
A blood glucose monitor and the supplies needed to use it effectively are covered if the 
beneficiary meets these requirements:  1) the patient is under a physicians care for 
diabetes; 2) the glucose monitor and related accessories and supplies have been ordered 
by the patients treating physician; 3) the patient (or patients caregiver) has been trained 
to use the required equipment in an appropriate manner; and 4) the equipment is designed 
for home rather than clinical use. 
Medicare Payment Policies and Expenditures 
Prior to July 1, 1998, Medicare coverage for home blood glucose monitors and test strips 
was restricted to beneficiaries with Type 1, or insulin-treated diabetes.  Medicare 
expanded coverage on that date to beneficiaries with Type 2, or non-insulin treated 
diabetes.  Medicare allowances for test strips more than doubled between 1994 and 1997, 
increasing from about $102 million in 1994 to $220 million in 1997.  Allowances 
exceeded $314 million in 1998. 
Medicare reimburses suppliers for test strips based on monthly fee schedule allowances 
which vary by State.  During 1997, the base period of our review, monthly fee schedule 
allowances for test strips ranged between $34.69 and $40.81 for a box of 50 strips. 
Effective January 1, 1998, fee schedule amounts were reduced 10 percent to between 
$31.22 and $36.73 for 50 strips. 
Medical Documentation 
The supplier must have documentation from the beneficiarys physician verifying medical 
need for diabetic testing supplies.  For diabetic supplies furnished in 1997, such 
documentation may be an order or prescription which has been signed and dated by the 
ordering physician.  This document (hereinafter referred to as an order in this report) 
must contain a statement indicating that the patient is a diabetic and is being treated with 
insulin injections.  The supplier must indicate on the claim that the order is on file by 
appending the modifier ZX for each supply provided.  The ZX modifier may only be 
used when these requirements are met.  The actual order does not have to be submitted 
with the claim.  In addition, when billing for quantities greater than those described as the 
usual replacement frequency (100 test strips a month), the claim must include 
documentation supporting the medical necessity for the higher amount.  (These 
documentation requirements were modified when coverage was expanded effective July 
1, 1998.) 
6
Blood Glucose Test Strips   OEI-03-98-00230  The DMERCs have requested that suppliers note on the claim if they are billing for more 
than one months supplies.  However, there is no limit on the number of months of test 
strips a supplier can bill for at one time. 
The HCFA issued a memorandum in December 1998 entitled, Durable Medical 
Equipment Carrier (DMERC) Billing Procedures.  The HCFA stated that claims 
involving supplies provided periodically, such as test strips, should not be submitted more 
frequently than monthly.  By limiting the billing to a 30-day cycle, HCFA indicated the 
program would save extensive program dollars and would simplify the review process at 
the same time. 
Medicare also requires suppliers to maintain detailed records of items furnished to 
beneficiaries, including brand name, model number, quantity, and delivery dates. 
Suppliers are required to retain evidence of the delivery of DME items, such as copies of 
receipts and pick-up slips.  This documentation may be requested by the DMERCs to 
verify delivery of the items. 
In June 1999,  the Office of Inspector General issued a document entitled, Compliance 
Program Guidance for the Durable Medical Equipment, Prosthetics, Orthotics and 
Supply Industry.  This document can be located on the World Wide Web at 
http://www.hhs.gov/progorg/oig/modcomp/cpgfinl.htm. The Guidance, which was 
prepared in consultation with health care trade organizations, was designed to promote a 
higher level of ethical and legal conduct among providers of medical equipment and 
supplies.  The Guidance details specific problems which we encountered in our 
inspection, such as the improper use of ZX modifiers and delivering and billing for 
supplies without a physicians order. 
METHODOLOGY 
Sampling 
We first selected a simple random sample of 555 Medicare beneficiaries with paid claims 
for blood glucose test strips in 1997.  The beneficiaries were selected from a 1 percent 
DME claims file developed from HCFAs National Claims History File.  We defined our 
sample population as those patients whose claims for test strips averaged $50 per month 
or more.  In order to compute point estimates and confidence intervals for inappropriate 
and questionable claims, we treated the beneficiary sample as a single-stage cluster 
sample in which each of the beneficiaries was a cluster and their 1997 claims were the 
unit of analysis.  Estimates were made only for the universe of beneficiaries with claims 
averaging $50 a month or more. 
7
Blood Glucose Test Strips   OEI-03-98-00230  We then checked current Medicare records to ascertain if any sample beneficiaries were 
shown as deceased.  We removed these beneficiaries from the sample.  In addition, we 
removed beneficiaries from the sample whose test strips were provided by suppliers under 
investigation.  The remaining sample consisted of 472 Medicare beneficiaries.  In all, 310 
different suppliers had submitted 2,184 claims for Medicare reimbursement for these 
beneficiaries.  Since many of the 310 suppliers had provided test strips for multiple 
beneficiaries, our unique supplier-beneficiary combination totaled 540. 
Data Collection and Analysis 
Beneficiary information.  We collected information from beneficiaries via telephone 
interviews.  Questions related to beneficiaries medical care and treatment for diabetes, 
frequency of blood sugar testing, how supplies were obtained, and supplier marketing 
practices.  We completed telephone interviews with 313 of the 472 beneficiaries, a 66 
percent response rate.  The interviews were conducted from December 1998 to June 
1999. 
Supplier information.  We mailed 540 survey forms to suppliers, one for each 
beneficiary for whom a claim was filed.  In addition to asking suppliers about the types of 
equipment and supplies provided to beneficiaries, we also included questions about their 
business and marketing practices.  Of the 540 surveys mailed, 469 were completed and 
returned, an 87 percent response rate.  The completed surveys represented 1,902 claims. 
We also asked the suppliers to provide pertinent items of documentation, including the 
physicians order, copies of HCFA-1500 Medicare claim forms submitted for the selected 
beneficiary in 1997, and documentation indicating the test strips were delivered. 
Additionally, we asked suppliers to submit any records of contact with the sample 
beneficiaries in 1997.  Although not a HCFA requirement, we felt such information 
would give us valuable insight into the beneficiarys history of test strip utilization and 
changing needs.  In some cases, suppliers, with our concurrence, substituted comparable 
documentation if requested information was unavailable. 
We reviewed supplier responses to confirm that each piece of requested documentation-
particularly the physician order--had been submitted.  We examined this documentation 
to ensure that the orders specified that beneficiaries had insulin-treated diabetes in 1997 
and had used test strips to monitor their blood sugar levels.  We also examined the 
documentation to ensure they were completed, signed, and dated by the beneficiaries 
treating physicians. 
According to Medicare guidelines, orders are considered to be completed timely if they 
are dated prior to or within 30 days after the first service date.  We decided that if 
multiple orders were submitted, the document which was dated closest or prior to the 
first date of service to be the controlling document for verification purposes.  However, if 
8
Blood Glucose Test Strips   OEI-03-98-00230  that order lacked any of the essential elements to support Medicare coverage 
requirements, we examined other documents to see if the missing elements were present. 
In cases where sample beneficiaries were supplied with more than 100 test strips a month, 
we reviewed the documentation to ensure that prescribing physicians had validated such 
quantities of supplies.  Initially, however, we reviewed the claims listed in our sample 
database to determine if we could detect claims requiring documentation supporting more 
than 100 test strips a month.  Our database reflected dates of service for the claims as 
well as billed dollars which indicated quantities of test strips supplied.  For the majority of 
claims, we could easily determine that the additional documentation was not necessary. 
For example, many claims were dated approximately 30 days apart and only contained a 
billing for 100 test strips.  For some claims, however, billings indicated supplies of greater 
than 100 test strips.  Further, some claims were submitted every two or three months, or, 
in certain cases, in time periods of less than 30 days.  We determined, therefore, that the 
only way to confirm whether the additional documentation was needed for these claims 
was to examine copies of HCFA-1500 claim forms along with physician documentation. 
We carefully examined information contained on claim forms, particularly from and 
to billing dates and any information representing how many months the strips were 
provided for.  Absent such information, we generally assumed that quantities billed were 
intended for one months use. 
We compared beneficiary and supplier responses to related questions to detect 
inconsistencies and questionable practices.  In cases where conflicting responses were 
uncovered, we rechecked beneficiary and supplier responses and pertinent documentation 
before reaching a determination. 
We determined that beneficiaries did not meet Medicare coverage requirements for test 
strips if physician orders were not provided and no reasonable explanation was supplied, 
orders were unsigned, did not pertain to the sample service dates, or did not indicate a 
diagnosis of insulin-treated diabetes. 
This study was conducted in accordance with the Quality Standards for Inspections 
issued by the Presidents Council on Integrity and Efficiency. 
9
Blood Glucose Test Strips   OEI-03-98-00230  F I N D I N G S  
Medicare allowed $79 million for blood glucose test strips 
with missing or flawed documentation 
$33 million in test strips claims had insufficient documentation to support 
eligibility 
Orders for 25 percent of the sampled claims for blood glucose test strips failed to 
establish beneficiaries eligibility for the supplies.  In these cases, we found that physician 
orders were missing, failed to contain any indication of insulin usage, were unsigned, or 
did not cover the dates of service billed.  We estimate that Medicare allowed $33 million 
for test strip claims for which supporting documentation failed to establish beneficiaries 
entitlement for these supplies.  This figure represents the unduplicated total allowances 
for these claims; more than one of the problems cited above was present in some orders. 
Suppliers in our sample appended ZX modifiers to procedure codes on claims for 
reimbursement even though documentation was missing or deficient.  Medicare 
guidelines stipulate that ZX modifiers are only to be used when all documentation 
requirements have been met.  The actual documentation does not have to be submitted to 
the DMERCs when the ZX modifier is used.  However, use of the ZX modifier means 
that the supplier is in possession of all the documents needed to fully support the claim. 
Eight percent of claims were supported by orders that did not cover the service dates 
billed.  In these instances, the beneficiaries for whom the flawed orders pertained would 
not be eligible for test strip coverage.  Generally, suppliers must have completed orders in 
their possession before providing supplies to beneficiaries.  However, we found instances 
where orders were dated months, even years, after the beginning dates of service.  In all, 
we received 63 orders which were completed and signed more than 30 days after test 
strips were initially provided.  Lengths of time from the initial supply of test strips to 
dates of completed orders ranged from 5 weeks to almost 25 months, with a median of 
more than 4 months. 
About 6 percent of claims had missing orders or orders not signed by physicians.  Such 
deficiencies do not meet Medicare eligibility requirements for coverage of blood glucose 
test strips. 
Under the Medicare guidelines in effect for 1997, insulin use was a requirement for 
coverage and reimbursement of test strips.  This requirement was modified when 
coverage was expanded on July 1, 1998.  For our 1997 beneficiary sample, however, we 
10
Blood Glucose Test Strips   OEI-03-98-00230  found that physician orders for 15 percent of claims did not state that beneficiaries used 
insulin.  About half of the $33 million involved beneficiaries who were not eligible for test 
strips because they were not using insulin.  In addition, our beneficiary survey revealed 
that 9 percent of the sample beneficiaries did not use insulin during 1997. 
An additional $46 million in test strips claims had incomplete orders or no 
supplier delivery records 
In addition to documentation problems affecting beneficiaries eligibility for blood 
glucose test strips, we found other documentation problems, which included missing or 
incomplete supplier delivery documentation and orders not sufficiently detailed.  While 
these problems do not prevent beneficiaries from being eligible for the test strips, they do 
raise questions about beneficiaries expected utilization regimens, types and quantities of 
test strips provided, and whether the products were even delivered.  These problems 
represent $46 million in allowances, according to our estimates. 
We found 21 percent of claims were supported by orders which were lacking in such 
basic details as the item being ordered (in this case, test strips), in addition to any 
information relating to quantity needed, frequency of utilization, or length of need.  Some 
orders even failed to mention the diagnosis.  Medicare requires orders to be sufficiently 
detailed enough to include a complete description regarding what is being ordered as well 
as the regimen of use.  One DMERC instruction states, If the order is for supplies that 
will be provided on a periodic basis, the order should include appropriate information on 
the quantity used, frequency of change, and duration of need. 
Many items billed to the DMERCs require a designated form, such as a certificate of 
medical necessity (CMN) form.  However, during the period of our review, no CMN or 
special form was required for test strips.  Suppliers were free to design their own order 
forms, so long as these forms carried the information which Medicare required.  As a 
result, suppliers submitted a variety of forms constituting orders for diabetic testing 
supplies.  Some forms were exhaustively detailed, while others were nothing more than a 
line or two written on a physicians prescription pad. 
Suppliers could not furnish any delivery documentation for 18 percent of claims. 
Medicare requires suppliers to maintain documentation detailing items furnished to the 
beneficiary as well as details regarding the delivery of the items.  According to one 
DMERC instruction, The supplier must also have a detailed record of the items provided 
to the beneficiary which would include brand name, model number, quantity and the date 
of delivery.  For durable medical equipment, the supplier should retain delivery and pick-
up slips.  This information must be sent to the DMERCs if requested. 
11
Blood Glucose Test Strips   OEI-03-98-00230  Irregular billing cycles make review of claims for test strips 
difficult 
We found that many suppliers submitted claims for reimbursement at irregular intervals 
which we believe made DMERC review of claims difficult.  Such irregular cycles can 
make it difficult to identify overlapping claims, claims without correct supporting 
documentation, and claims containing excessive amounts of test strips. 
We found that Medicare does not require billing dates on claim forms to have an ending 
date for repetitive supplies even though HCFA-1500 claim forms have blocks for a start 
date and an ending date.  Nearly all of the claims in our sample had the same date in both 
the from and to fields.  Also, claim forms often failed to contain any statement 
indicating how many months were being supplied.  Without this information, it was 
difficult to determine whether a supply of test strips was meant for one month or multiple 
months.  Adding to this difficulty, we found suppliers frequently billed in intervals ranging 
from less than 30 days to every 3 months.  Around 15 percent of the beneficiaries (n=88) 
in the original claims sample of 555 obtained or received two or more test strip supplies 
in time periods under 30 days. 
Irregular billing cycles contribute to the problem of overlapping claims, particularly if 
multiple suppliers are involved.  Essentially, overlapping claims present two potential 
problems:  1) excessive supplies of test strips not ordered by the attending physician, and 
2) more than 100 test strips supplied during a 30-day period without physician 
authorization.  For example, one beneficiary received test strips from three different 
suppliers during an overlapping time period, and wound up with 600 test strips in one 
month.  There was no medical necessity documentation for more than 100 test strips a 
month. 
These irregular billing cycles, coupled with claims having the same from and to dates, 
made it difficult to determine whether claims in excess of 100 test strips were intended to 
cover more than one month and, as a result, whether additional documentation was 
needed to support the quantity of supplies claimed.  However there were cases in which it 
did seem clear that additional documentation was required.  We found 60 sampled claims 
with billings for more than 100 test strips a month that we believe lacked documentation 
to support the necessity for such quantities.  During the period of our review, suppliers 
were required to obtain documentation supporting the medical need for quantities 
exceeding 100 test strips a month, such as a written statement from the ordering 
physician.  In one example, a beneficiary received 500 strips over a 3-month period, 
despite the fact that the physician order indicated that she only tested 20 times per week. 
In another case, a supplier provided a beneficiary with 100 test strips on April 3, 1997 
and another 100 strips on April 4, 1997.  The physicians order did not contain any 
documentation to support the medical necessity of more than 100 test strips a month. 
12
Blood Glucose Test Strips   OEI-03-98-00230  R E C O M M E N D A T I O N S  
To address the vulnerabilities identified in this report, we recommend that the 
Health Care Financing Administration: 
Alert suppliers of the importance of properly completed documentation to support 
their claims for test strips.  This effort should encompass physicians orders as well as 
supplier delivery documentation and documentation to support the medical necessity of 
quantities of test strips greater than 100 per month.  In addition, the use and meaning of 
ZX modifiers should be emphasized.  Further, HCFA should periodically review 
documentation to ensure that it exists and is accurate. 
Require suppliers to indicate actual and accurate dates on claim forms.  This action 
would make it easier for DMERCs to determine the existence of aberrant or potential 
problems, such as overlapping claims or whether documentation is needed to support 
more than 100 test strips a month. 
Promote supplier concurrence and cooperation with the Office of Inspector 
Generals Compliance Program Guidance for the Durable Medical Equipment, 
Prosthetics, Orthotics and Supply Industry.  Suppliers should be encouraged to 
establish and adhere to the voluntary compliance program to ensure that their operations 
meet the standards promulgated by the Office of Inspector General along with national 
health care organizations. 
Advise beneficiaries, as part of its outreach service, to report any instances of 
fraudulent or abusive practices (such as receiving excessive or unrequested 
deliveries of test strips) involving their home blood glucose monitors, test strips, or 
related supplies to their DMERCs. 
AGENCY COMMENTS 
The HCFA concurred with our recommendations.  The HCFA noted a number of initiatives that 
have reduced the incidence of improper payments in recent years.  To specifically address our 
recommendations, HCFA stated that (1) DMERCs will continue to stress the importance of 
properly completed documentation through a combination of published guidance in supplier 
manuals and bulletins and supplier education and outreach seminars, (2) in the 2001 Work 
Change Process, they will promulgate changes on claims forms to require actual and accurate 
start and end dates, (3) they will work with the National Supplier Clearinghouse to include 
language in the notifications sent to suppliers awarding them billing numbers to read and adhere 
to the OIGs Compliance Program Guidance for the Durable Medical Equipment, Prosthetics, 
13
Blood Glucose Test Strips   OEI-03-98-00230  Orthotics and Supply Industry, and (4) beneficiary outreach efforts will encourage the reporting 
of abusive supplier practices to the DMERCs.  The full text of HCFAs comments can be found 
in Appendix B. 
OIG RESPONSE 
We support HCFAs continuing efforts to reduce the incidence of improper Medicare payments. 
Although HCFA indicated that our estimate of improper payments was based on an extrapolation 
from a sample of high use (emphasis added) beneficiaries, we wish to point out that we selected 
for our sample those patients whose claims averaged at least $50 per month.  We do not believe 
that all of these beneficiaries should be defined as high-use beneficiaries. 
14
Blood Glucose Test Strips   OEI-03-98-00230  APPENDIX  A 
Estimates And Confidence Intervals

The tables below contain statistical estimates presented in the Findings section of this report.  To 
calculate the point estimates and confidence intervals for the percentage of claims and total 
Medicare allowances we used the Survey Data Analysis (SUDAAN) software package.  These 
estimates are weighted based on a single-stage cluster sample design.  To calculate the point 
estimates and confidence intervals for the percentage of Medicare beneficiaries we used the SAS 
software package.  These estimates are based on a simple random sample design.  All estimates 
are reported at the 95 percent confidence level.  Estimates were made only for the universe of 
beneficiaries with claims averaging $50 a month or more. 
MEDICARE ALLOWED $79 MILLION FOR BLOOD GLUCOSE TEST STRIPS WITH 
MISSING OR FLAWED DOCUMENTATION 
Table 1. 
Claims With Missing or Flawed Documentation 
Point  95% Confidence Interval 
Estimate 
Total Medicare Allowances in 1997 for Glucose Test 
Strip Claims With Missing or Flawed Documentation  $78,939,525  $68,015,130 - $89,863,921 
Table 2. 
Claims Which Failed to Establish Beneficiary Eligibility 
Point  95% Confidence Interval 
Estimate 
Percent of Claims Which Failed to Establish  24.50%  18.68% - 30.32% 
Beneficiary Eligibility 
Total Medicare Allowances in 1997 for Glucose Test 
Strip Claims Which Failed to Establish Beneficiary  $33,009,187  $25,402,245 - $40,616,130 
Eligibility 
15
Blood Glucose Test Strips   OEI-03-98-00230  APPENDIX  A 
Table 3. 
Claims With Other Documentation Problems 
Point  95% Confidence Interval 
Estimate 
Percent of Claims With Other Documentation  33.77%  27.56% - 39.98% 
Problems 
Total Medicare Allowances in 1997 for Glucose Test 
Strip Claims With Other Documentation Problems  $45,930,337  $36,682,684 - $55,177,989 
Table 4. 
Claims With Orders Not Covering the Dates of Service 
Point  95% Confidence Interval 
Estimate 
Percent of Claims With Orders Not Covering the  8.43%  5.57% - 11.29% 
Dates of Service 
Table 5. 
Claims With Missing or Unsigned Orders 
Point  95% Confidence Interval 
Estimate 
Percent of Claims With Missing or Unsigned Orders  5.52%  2.68% - 8.36% 
Table 6. 
Claims With No Documentation of Insulin Use 
Point  95% Confidence Interval 
Estimate 
Percent of Claims With No Documentation of Insulin  15.24%  9.67% - 20.80% 
Use 
16
Blood Glucose Test Strips   OEI-03-98-00230  APPENDIX  A 
Table 7. 
Beneficiaries Who Said They Did Not Use Insulin in 1997 
Point  95% Confidence Interval 
Estimate 
Percent of Beneficiaries Who Said They Did Not Use  9.45%  8.61% - 10.29% 
Insulin in 1997 
IRREGULAR BILLING CYCLES MAKE REVIEW OF CLAIMS FOR TEST STRIPS 
DIFFICULT 
Table 8. 
Claims Without Documentation That Test Strips Were Ordered 
Point  95% Confidence Interval 
Estimate 
Percent of Claims Without Documentation That Test  20.75%  15.56% - 25.94% 
Strips Were Ordered 
Table 9. 
Claims Without Delivery Documentation 
Point  95% Confidence Interval 
Estimate 
Percent of Claims Without Delivery Documentation  17.90%  12.63% - 23.17% 
17
Blood Glucose Test Strips   OEI-03-98-00230  APPENDIX B 
Health Care Financing Administration Comments

18
Blood Glucose Test Strips   OEI-03-98-00230  APPENDIX B 
19
Blood Glucose Test Strips   OEI-03-98-00230  APPENDIX B 
20
Blood Glucose Test Strips   OEI-03-98-00230  APPENDIX B 
21
Blood Glucose Test Strips   OEI-03-98-00230  APPENDIX B 
22
Blood Glucose Test Strips   OEI-03-98-00230  APPENDIX B 
23
Blood Glucose Test Strips   OEI-03-98-00230