The HHS Office of Inspector General (OIG) has issued a report entitled “Review of Medicare Payments for Selected Durable Medical Equipment Claims With the KX Modifier for Calendar Year 2006." According to the OIG, the KX modifier – which indicates that the supplier has the required documentation on file -- was not effective in ensuring that suppliers that submitted claims to Palmetto GBA in 2006 actually had the required supporting documentation on file. Based on a sample of 100 items, the OIG extrapolates that Palmetto GBA paid approximately $127 million to suppliers who did not have the required documentation on file for services in 2006. The OIG attributes these errors to ineffective edits that determined only whether the KX modifier was on the claim, but not whether the documentation actually was on file. The OIG made a series of recommendations to recover inappropriate payments and improve the effectiveness of the KX modifier.