Hello, OIG?

A collective industry gasp could be heard across the country after the Office of Inspector General issued its “Updated Special Fraud Alert on Telemarketing by Durable Medical Equipment (DME) Providers” in January.

It's not that anyone disagrees with the original intent of the telemarketing prohibition that Congress put in statute in the early 1990s. The problem stems from the OIG's statement that DME providers who contact beneficiaries to carry out a physician's verbal or written order violate this prohibition and expose themselves to possible exclusion from the Medicare program, as well as to potential liability for false claims, if they submit claims arising from those contacts.

The telemarketing prohibition, added to the Social Security Act by Congress in 1992, was directed at unsolicited telemarketing practices. These “cold calls” involved unscrupulous actors who would obtain lists of beneficiaries and call them in an attempt to have the beneficiaries go to their doctor and ask them for a prescription for DME items they did not need. Congress was concerned that this practice inappropriately increased Medicare spending for medically unnecessary medical equipment.

The OIG's fraud alert states that DME providers would have to have the beneficiary's written authorization before contacting the beneficiary to deliver DME ordered by the physician, since written beneficiary authorization is one of three exceptions to the overall telemarketing prohibition. The OIG is stating that calling the beneficiary as a follow-up to a physician verbal order is akin to unsolicited telemarketing.

There are multiple problems with both the OIG's analysis and its conclusion about what is an entirely ethical and pragmatic practice. At best, the OIG has an extremely limited understanding of how physicians order DME items for their patients — and how physicians expect DME providers to fulfill those orders. Moreover, this normal medical practice should not violate the telemarketing prohibition because the DME provider's telephone contact has been solicited from the prescribing physician, who has determined that the beneficiary has a medical need for the item. The telephone contact is, therefore, implicitly authorized by the beneficiary, and is explicitly authorized by the prescribing physician. This should not fall into the category of unauthorized telemarketing.