Continuous Glucose Monitoring (CGM) Medicare Compliance

In 2018, the Centers for Medicare and Medicaid Services (CMS) expanded Medicare coverage for continuous glucose monitoring (CGM). While this is good news for program beneficiaries who need CGM, billing compliance has proven to be a challenge for many pharmacies and other healthcare providers.

When continuous glucose monitoring (CGM) was first introduced in 1999, it set off a nearly two-decade race among medical device makers who sought develop new noninvasive continuous monitoring tools that would meet the requirements for Medicare coverage. Dexcom effectively won the race in 2017, when the Centers for Medicare and Medicaid Services (CMS) approved the Dexcom G5 CGM – a sensor that transmits Type 1 and Type 2 diabetes patients’ glucose and insulin data to a smartphone app. Similar systems have since qualified for Medicare coverage as well, and today healthcare providers have multiple options when it comes to prescribing CGM to Medicare beneficiaries.

Previously, CMS took the position that CGM should not be covered under Medicare because it did not provide an independent means for healthcare providers to make treatment-related decisions. In 2017, the agency stated, “Medicare does not cover CGMs approved by the FDA for use as adjunctive devices to complement, not replace, information obtained from blood glucose monitors [because] such devices are not used for making diabetes treatment decisions, such as changing one’s diet or insulin dosage based solely on the readings of the CGM.” However, today’s CGM systems can serve to fully replace blood glucose monitors, and it is this change that has led to the decision to allow Medicare coverage. The Centers for Medicare and Medicaid Services’ website currently states:

“Medicare covers therapeutic continuous glucose monitors (CGMs) and related supplies instead of blood sugar monitors for making diabetes treatment decisions, like changes in diet and insulin dosage. If you use insulin and require frequent adjustments to your insulin regimen/dosage, a CGM may be covered if your doctor determines that you meet all of the requirements for Medicare coverage.”

But, while many CGM systems are now eligible for Medicare reimbursement, limitations remain, and there are a number of potential stumbling blocks for pharmacies and other healthcare providers when it comes to billing the federal government for CGM and related diagnoses and treatment. Furthermore, since CGM systems are more expensive than blood glucose monitors, doctors who recommend CGM over glucose meters are facing close scrutiny from CMS and its independent Medicare audit contractors (MACs, RACs, and ZPICs). This close scrutiny also impacts pharmacies, which can face legal risks if they are not properly set up to accept CGM prescriptions and provide CGM sensors and other devices to patients. 

CGM and Medicare: Important Compliance Considerations for Pharmacies

In fact, when it comes to continuous glucose monitoring systems and Medicare compliance, pharmacists and pharmacies face a host of potential legal issues. If not managed appropriately, these compliance concerns trigger Medicare audits and investigations, and pharmacists and pharmacy owners can potentially be at risk for recoupments, fines, Medicare exclusion, and other penalties. 

So, what do pharmacists and pharmacy owners need to know about CGM and Medicare compliance? While this list is not exhaustive, some of the key pharmacy compliance considerations include:

1. Billing and Coding Compliance

Even if you are billing Medicare for an eligible CGM device, billing Medicare improperly can lead to penalties. While it is generally up to prescribing physicians to determine when a CGM device is “medically necessary” within the definition prescribed by the Medicare billing guidelines, pharmacists must still be aware of the risk of billing Medicare for CGM devices that patients don’t actually need. In addition to billing for medically-unnecessary CGM devices, other common billing and coding mistakes include:

• Submitting an incorrect billing code to CMS
• Billing for CGM devices not actually provided to patients
• Billing Medicare and a private insurer for the same CGM device

2. Non-Medicare-Compliant CGM Systems

Not all CGM systems and devices are eligible for Medicare reimbursement. With medical device manufacturers constantly developing and marketing new devices, it can be difficult to simply keep up with which devices have been approved by the Food and Drug Administration (FDA), much less those that have been approved by Medicare. However, as a pharmacist or pharmacy owner, it is your responsibility to ensure that your practice is only billing Medicare for approved CGM devices. 

Pharmacists and pharmacy owners should not rely solely on representations made by device manufacturers. Prior to billing Medicare for a CGM device it is imperative that a pharmacy independently determine whether the device has received approval for billing under the applicable Medicare program (i.e. Part A, Part B, Part C, Part D, or Medicare Advantage). 

3. Durable Medical Equipment (DME) Designation

Another common Medicare billing mistake related to CGM involves improperly billing for CGM systems as durable medical equipment (DME). As a general rule, in order for a device to qualify as DME, it must be designed to last and work as intended for a minimum of three years. Due to the nature of many CGM systems – which rely on smart devices and smartphone apps – CMS has taken the position that these systems do not qualify for DME reimbursement. While these systems may still be Medicare-eligible, improperly classifying these systems as DME could lead to scrutiny from CMS’s auditors and compliance investigators. 

4. Referral Relationships with Physicians

Referral relationships with physicians can present a number of issues when it comes to Medicare compliance, and referral relationships involving CGM are no exception. Anti-Kickback Statute investigations targeting physicians and pharmacies are commonplace, with CMS, the U.S. Department of Health and Human Services’ Office of Inspector General (OIG), the U.S. Department of Justice (DOJ), and various other agencies and task forces all aggressively targeting healthcare providers that make and receive improper payments in relation to Medicare beneficiary referrals. 

While it is entirely possible to structure legally-compliant referral arrangements that do not violate the Anti-Kickback Statute, any referral relationship relating to a specific drug or device (including a CGM device) should be structured with a specific Anti-Kickback Statute safe harbor in mind. If federal agents start looking into your pharmacy’s financial relationships with physicians, having a safe harbor-compliant contract could mean the difference between avoiding liability and facing civil or criminal prosecution. 

5. Marketing Relationships with CGM Device Manufacturers

Marketing relationships with CGM device manufacturers, marketing groups, and other third parties present similar concerns. It is no secret that medical device companies market their products heavily, and the FDA imposes strict rules on what companies can and can’t say about their products. What many pharmacists and pharmacy owners don’t realize is that the prohibitions that apply to device manufacturers extend to the pharmacies that sell their products; and, even if you rely on statements that a device company makes in writing, you could still be at risk in the event of an audit or investigation. 

With these considerations in mind, in addition to addressing standard contracting considerations, agreements with CGM device manufactures, marketing groups, and other third parties should address two critical concerns: (i) they should steer well clear of any Anti-Kickback Statute implications; and, (ii) they should provide appropriate remedies in the event that a deceptive marketing claim or other improper act leads to pharmacy liability. 

6. Compliance Training, Monitoring, and Enforcement

In order to effectively serve its intended purpose of mitigating the risk of Medicare audits and investigations, a pharmacy compliance program must not only be developed, but it must be implemented effectively. This means that pharmacy personnel must be trained with regard to their individual roles in maintaining compliance; compliance efforts must be monitored; and, when issues arise, enforcement and remediation efforts must begin immediately. Critically, not only will these efforts reduce the chances of facing an audit or investigation; but, if auditors or federal agents look into your pharmacy’s CGM billing and distribution practices, they will also allow you to come out of the audit or investigation without civil or criminal liability. 

7. Changes to Medicare Coverage for CGM

Since CGM systems are both relatively new and constantly undergoing development, this means that the rules regarding Medicare eligibility and billing are going to continue to change. As a result, pharmacists and pharmacy owners cannot view developing a CGM Medicare compliance program as a one-time event. Pharmacies will need to continue to monitor FDA and CMS news releases for changes in the federal rules and regulations regarding continuous glucose monitoring; and, when these agencies publish new guidance, they will need to adapt their compliance programs promptly in order to avoid falling behind.

Is your pharmacy providing patients with prescription CGM devices? If so, is your practice compliant with the current Medicare guidelines? Could your relationships with physicians and device manufacturers be putting your practice at risk? Contact Oberheiden, P.C. to find out.

Schedule a Free Initial Consultation at Oberheiden, P.C.

If you have questions or concerns about CGM Medicare compliance, we encourage us to contact us for a complimentary initial consultation. To speak with one of our federal pharmacy compliance lawyers in confidence, please call 888-680-1745 or request an appointment online today.