For diabetic patients and the doctors who treat them, blood sugar levels are crucially important. However, the traditional method of testing one’s blood sugar with a pin-prick is undesirable for many patients, which leads to lower-than-desired patient compliance rates.

However, with the advent of Continuous Glucose Monitoring (CGM) devices, patients and healthcare providers are able to maintain a close watch on blood sugar levels without the need to manually conduct the test.

While CGM devices are revolutionary in terms of the potential benefits to patients, CGM companies face challenges when submitting claims for reimbursement to federally funded benefit programs such as Medicare and Medicaid. Many of these issues relate to the “medical necessity” requirement that applies to all Medicare-covered equipment and services. However, the vast majority of claims were denied based on a lack of appropriate documentation, which may, in turn, give rise to other issues.

Does Medicare Cover CGM Devices?

Back in 2018, the centers for Medicare and Medicaid began to cover CGM devices. The current Medicare guidance for CGM devices provides,

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.

Accordingly, a CGM device is only covered when each of the following conditions is met:

1. The beneficiary has diabetes mellitus;
2. The beneficiary is insulin-treated with three or more daily administrations of insulin or a continuous subcutaneous insulin infusion pump;
3. The beneficiary’s insulin treatment regimen requires frequent adjustment by the beneficiary on the basis of BGM or CGM testing results;
4. Within six months of ordering the CGM, the treating practitioner has an in-person visit with the beneficiary to evaluate their diabetes control and determined that the above-listed criteria are met; and
5. Every six months following the initial prescription of the CGM, the treating practitioner has an in-person visit with the beneficiary to assess adherence to their CGM regimen and diabetes treatment plan.

While this Medicare approval of CGM devices opened the door for patients who could not otherwise access the technology, it has also resulted in a corresponding increase in the number of CGM companies subject to a federal investigation.

According to the most recent data from the Centers for Medicare and Medicaid Services, the improper payment rate for glucose monitors was 32.8 percent in 2019. This resulted in an improper payment amount of approximately $74 million.

What Is at Stake in a CGM Investigation?

A federal investigation into the propriety of a CGM company’s practices can significantly disrupt business operations, requiring companies to take an all-hands-on-deck approach to effectively deal with the investigation. Depending on the outcome of the investigation, companies may face fines and penalties, disgorgement, injunctions, and possibly even federal prison sentences for those overseeing operations.

That being the case, all CGM companies must develop and adhere to a comprehensive CGM compliance program to reduce the risk of incurring federal scrutiny and mitigating any resulting liability.

What Must a CGM Company’s Compliance Program Contain?

Developing a robust compliance program is the best way for CGM companies to avoid federal scrutiny. However, merely having a compliance program on the books only provides limited protection; a company must also take steps to ensure that employees and lower-level managers are following the spirit of the compliance program in their everyday work.

According to the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), the core elements of a CGM company’s compliance program consists of the following:

1. Implementation of written policies, procedures and standards of conduct;
2. Designation of a compliance officer and compliance committee;
3. Conducting effective training and education among employees;
4. Maintaining open and effective lines of communication;
5. Enforcing standards through well-publicized disciplinary guidelines;
6. Conducting internal monitoring and auditing; and
7. Responding promptly to detected offenses and developing a corrective action plan.

In this way, compliance is an ongoing process. First, an organization must develop a compliance program after conducting a thorough review of all high-risk areas. Second, a CGM company should conduct an ongoing analysis focused on assessing the effectiveness of the compliance program, making any necessary modifications.

Often, when potential violations occur, they are due to employees not understanding their obligations, which may require a company to make additional efforts at educating employees about the importance of compliance.

Finally, an organization should painstakingly review all possible violations with an eye toward what can be changed in the company’s policies to prevent future violations of a similar sort.

Notably, CGM companies should avoid adopting a one-size-fits-all approach when it comes to compliance. The better alternative is to work with an experienced CGM compliance attorney who can work with executives and other stakeholders to create a custom-tailored plan that addresses the organization’s unique needs.

Dr. Nick Oberheiden, a CGM compliance attorney, explains,

While every compliance program should be custom-tailored to an organization’s particular needs, this is especially important for companies manufacturing and selling continuous glucose monitoring devices. Given the benefits these devices provide, and their resulting popularity, federal investigators have evidenced a concern over how these companies bill Medicare. Even unintentional violations can result in lengthy investigations, which can profoundly impact a businesses’ ability to operate. Compliance is the first line of defense against these burdensome investigations.

For CGM companies, compliance is critical. CGM companies must ensure that their internal compliance programs contain strict policies mandating compliance with federal law. In addition, these compliance programs should outwardly evidence an organization’s commitment to compliance.

Violating federal healthcare statutes could expose a business to a federal investigation, substantial fines and penalties, exclusion from federal programs, disgorgement orders, injunctions, and reputational harm. In some cases, violations may even result in criminal liability.

An experienced federal defense attorney who frequently handles CGM compliance matters can effectively guide CGM companies through the compliance process to ensure a custom-tailored compliance system that management can rely on to protect their business and personal interests.