DME MACs and UPICs Authority to Initiate an Overpayment

5.6 – DME MACs and UPICs Authority to Initiate an Overpayment and/or Civil Monetary Penalty (CMP) When Invalid CMNs or DIFs Are Identified (Rev. 10749; Issued: 05-11-21; Effective: 06-11-21; Implementation: 06-11-21) Section 1862(a)(1)(A) of the Act prohibits Medicare payment for services that are not reasonable and necessary. Section 1833(e) of the Act requires that Medicare be furnished by providers and suppliers "such information as may be necessary in order to determine the amount due.…" These sections provide support that a failure to have a valid CMN or DIF on file or to submit a valid CMN or DIF to the DME MACs or UPICs makes the underlying claim improper because Medicare does not have sufficient information to determine whether the claim is reasonable and necessary. A valid CMN is one in which the treating physician has attested to and signed supporting the medical need for the item, and the appropriate individuals have completed the medical portion of the CMN. A valid DIF is one in which the supplier has attested to and signed supporting the medical need for the item. When the DME MACs and UPICs identify a claim for which a CMN or DIF is not valid, they may deny the claim and/or initiate overpayment action. If a DME MAC or UPIC identifies a supplier that has a pattern of improperly completing the CMN or DIF, the DME MAC or UPIC may choose to initiate a potential Civil Monetary Penalty (CMP) case against the supplier. The authority for such action is found in §1834(j)(2)(A)(iii) of the Act which states that "any supplier of medical equipment and supplies who knowingly and willfully distributes a CMN in violation of clause (I) or fails to provide the information required under clause (ii) is subject to a civil money penalty in an amount not to exceed $1,000 for each such certificate of medical necessity so distributed." The provisions of §1128A of the Act (other than subsections (a) and (b) shall apply to CMPs penalties under this subparagraph in the same manner as they apply to a penalty or proceeding under §1128(A)(a)) of the Act.