CGM Billing Fraud: Supply Allowances, Duplicate Testing and Coverage Changes

Continuous glucose monitor billing fraud occurs when suppliers knowingly charge Medicare for supplies they did not furnish, equipment that does not qualify or items already covered by the supply allowance. The receiver starts the relationship. The recurring supply claims keep the money coming. Billing, fulfillment and reimbursement records can show why the claims keep going when the patient’s supplies or coverage no longer support them.

CGM Supply Allowances Keep the Claims Coming

Medicare pays for a qualifying continuous glucose monitor receiver and for the supplies needed to use it. A4239 covers supplies for a non-adjunctive CGM, which can guide treatment decisions without a separate blood glucose test to confirm the result. A4238 covers supplies for an adjunctive CGM, which requires that confirmation. Both allowances include sensors and transmitters.

The money follows the consumables. In its review of Medicare CGM payments, the HHS Office of Inspector General identified supplies as the most common CGM billing and the largest opportunity for savings. For July 2022 through June 2023, payments for devices and supplies exceeded supplier acquisition costs by $377 million and estimated total costs by $70 million. Payments for supplies alone exceeded retail prices by $290 million.

Those excess payments raise health care costs for Medicare and its enrollees. For an insider, the sharper question is what the supplier furnished for each period it billed.

What Changed in CGM Coverage?

CGM coverage criteria changed in April 2023, so claim review depends on the service date. A billing file can span several versions of the rules, with different eligibility requirements and even different codes for the same category of equipment.

• January 12, 2017: Medicare began covering therapeutic, non-adjunctive CGMs under its durable medical equipment benefit.
• July 18, 2021: The requirement to test blood glucose at least four times a day before qualifying for CGM coverage was removed.
• February 28, 2022: The Centers for Medicare & Medicaid Services recognized both non-adjunctive and adjunctive CGMs as potentially qualifying durable medical equipment.
• April 16, 2023: Coverage expanded beyond the earlier requirements for at least three daily insulin administrations and frequent treatment adjustments. The revised criteria included insulin treatment or a qualifying history of problematic hypoglycemia.
• January 1, 2024: Suppliers could bill up to three months of the supply allowance at a time, instead of only one month.

The code change matters alongside that coverage history. For non-adjunctive systems, E2103 and A4239 replaced K0554 and K0553 for dates of service beginning January 1, 2023. The Centers for Medicare & Medicaid Services glucose monitor policy ties those codes to service dates and sets out the documentation behind the claim.

The medical record must support diabetes, training, prescribing consistent with FDA indications and the applicable insulin-treatment or hypoglycemia pathway. For non-insulin-treated patients, the hypoglycemia pathway requires documented recurrent qualifying events despite treatment changes, or a qualifying severe event requiring another person’s help. An oral diabetes medication does not make a patient insulin-treated.

The practitioner visit and supporting medical record give those claims substance. A checked box in a supplier’s billing system is a poor substitute for the clinical facts it claims to represent.

A4238 and A4239 Have a Refill-Contact Exception

The CGM supply allowance is exempt from the affirmative refill contact requirement for codes A4238 and A4239. That exception changes how a recurring claim must be examined.

The ordinary Medicare refill requirements call for documented patient contact before shipment, but these allowances follow a different rule.

When a CGM A4239 supplier asks for monthly remaining quantity documentation, the question behind it is whether the patient’s supplies last through the billed period. Suppliers must monitor usage, even when a single shipment covers several months.

The allowance still has a concrete limit. Previously delivered supplies must be sufficient for a full month following the claim’s service date. When they are insufficient, the supplier must furnish more before billing. Suppliers may bill up to three months at once and may not dispense more than a 90-day supply.

That makes the supply history consequential: what went out, how long it should last and which periods the claim covers. A billing schedule can repeat indefinitely. The supplies in the patient’s home cannot.

Non-Adjunctive CGM Billed With Blood Glucose Test Strips

Billing separately for test strips already included in the non-adjunctive A4239 allowance charges Medicare twice for the same supplies. That allowance includes a home blood glucose monitor and related testing supplies when needed, as well as the CGM sensors and transmitters.

The Centers for Medicare & Medicaid Services denies separate claims for supplies or accessories already included in the allowance. The comparison joins the non-adjunctive receiver and allowance lines to any separate meter, test-strip or lancet claims for the same supplies. Relevant codes include E0607 for a home blood glucose monitor, A4253 for test strips and A4259 for lancets.

Unlike A4239, the adjunctive A4238 allowance excludes the home blood glucose monitor and its testing supplies. Both allowances include CGM sensors and transmitters.

An employee who sees both billing streams can explain how the supplier treated those items.

The CGM Receiver and Smartphone-Only DME Coverage Boundary

Continuous glucose monitor supply coverage depends on the patient using a qualifying receiver or insulin infusion pump to display glucose data. A system that displays results solely on a smartphone, without a qualifying receiver or pump, does not meet Medicare’s durable medical equipment definition.

If the patient never uses a qualifying receiver or pump to display the data, Medicare does not cover the supply allowance.

The receiver therefore matters beyond the delivery record. Its use supports the coverage of later supply claims. A box shipped to the patient and a receiver used by the patient answer different questions.

The Records Behind a False CGM Claim

A continuous glucose monitor claim connects the order, clinical record, product, delivery and billed period. The supplier’s internal records can show where those accounts diverge and who directed the billing.

The product model matters. E2102 and E2103 devices must pass Medicare’s product coding verification and appear on the product list for the code billed. The KF modifier belongs on Class III non-adjunctive devices and supplies, never on products outside that class.

The HHS Office of Inspector General found $7 million in potential overpayments from improper CGM coding: suppliers billed higher-paying categories while furnishing products that should have received lower payment. Product invoices, model identifiers and submitted codes put that mismatch in view.

The standard documentation requirements also connect a mail-order shipment to its recipient. The supplier’s shipping invoice and the carrier’s tracking record must link together, identifying what was delivered, in what quantity and to whom. Where a written order before delivery is required, obtaining it afterward does not cure the earlier delivery.

For replacement CGM supplies, CMS treats the base device’s medical necessity as established when Medicare originally paid for it. Continued coverage still requires documentation of a practitioner visit every six months supporting adherence to the CGM and diabetes treatment. If Medicare did not pay for the original equipment, all applicable coverage, coding and documentation requirements for the supply claim’s service date must be met.

For CGM, an insider’s contribution is the connection: the claim, the product and the decision that put the wrong information into the billing.

Arriva Shows Why the Recurring Supplies Matter

Arriva Medical’s meter-and-strip business shows how the initial device can serve the recurring sales. In August 2021, Arriva and its parent Alere agreed to pay $160 million to resolve allegations involving free meters, routine copayment waivers, new meters billed before the five-year replacement limit had run and claims for deceased beneficiaries.

The government’s complaint quoted an operations executive’s email:

The alleged kickbacks brought patients into a stream of reimbursed supply orders. Call-center scripts, copayment policies and billing decisions were parts of the same business. Taxpayers funded the claims, while honest suppliers competed against the free-meter pitch.

The companion settlement involving Grapevine Billing and Consulting Services reached an outside reimbursement consultant who allegedly oversaw Arriva’s reimbursement department, developed copayment policies and submitted claims. The billing decisions reached beyond the supplier to its contractor.

The Arriva case began with a former call-center employee. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

What Changes in Round 2028?

Round 2028 will bring Class II CGMs and insulin pumps into nationwide Remote Item Delivery competitive bidding, with a monthly rental payment that includes necessary supplies and accessories. The Centers for Medicare & Medicaid Services published timetable targets the start no later than January 1, 2028.

The program reaches shipped items and items picked up at a contract supplier’s or subcontractor’s storefront. Contract suppliers retain ownership of rented equipment. Patients who already own equipment can continue using it, with contract suppliers furnishing replacement supplies, until replacement or a switch to rental.

When You Know Why the Claims Kept Going

If your work in healthcare billing, CGM fulfillment or reimbursement shows why unsupported claims kept going, speak to one of our Whistleblower Experts about those decisions. We connect your knowledge of the business to the supply and payment records to build your strongest CGM whistleblower case. From the first conversation through the case, we guide the strategy with you and bring in Medicare durable medical equipment fraud whistleblower lawyers who understand recurring supply claims.