As the new Democratic Congress began examining Medicare and Medicaid issues after the Bush administration unveiled its 2008 proposed budget, some ugly
by Cara C. Bachenheimer, Esq.

As the new Democratic Congress began examining Medicare and
Medicaid issues after the Bush administration unveiled its 2008
proposed budget, some ugly fraud and abuse stories were highlighted
at House and Senate hearings held to examine issues in these
programs. And yes, those stories included our HME industry,
particularly the Miami area.

As an industry, we cannot afford to be the subject of any
further smearing on Capitol Hill. The few friends and supporters we
have will disappear, and our problems will be far greater than they
are currently. So here's what I recommend that we, as an industry
and as individual businesses, need to do.

We must first publicly declare that we are committed to working
with the government to help eliminate fraud and abuse in the
Medicare program. We must make it clear that any level of
intentional fraud is unacceptable, and that we are outraged at the
allegations regarding the level of fraud and abuse that appears to
be occurring in the Miami area.

At the same time, it is important for policymakers to understand
that Medicare's rules, regulations, requirements and paperwork
associated with billing the program are extremely arduous. For
example, rules and regulations change frequently, and often a
seemingly minor change — such as the recent conversion from
one DMEPOS Program Safeguard Contractor administrator to another
— can result in a number of misunderstandings or
misapplication of existing regulations.

Even a Government Accountability Office report last year
acknowledged that a certain percentage of what it characterizes as
“improper payments” actually result from honest
mistakes, typographical errors or other administrative issues
associated with billing rather than from intentional and overt
fraud and abuse.

Another critical point for legislators is that the industry has
for many years been asking CMS and Congress to require more
stringent Medicare supplier standards to ensure that only
legitimate entities are able to receive a supplier number and bill
the Medicare program. We continue to believe that the current
requirements, while generally stringent, can be strengthened in
terms of both the way in which new provider numbers are granted by
the National Supplier Clearinghouse and the subsequent pre- and
post-payment audit sampling methods that are used to identify
potential fraud and abuse.

In the fight to eradicate fraud and abuse, however, CMS must
continue to ensure that beneficiaries are able to receive medically
necessary items that their licensed physicians prescribe for them.
We must caution policymakers not to lose sight of ensuring that
seniors and people with disabilities have access to medically
necessary items that enable them to maintain their independence,
dignity and quality of life within their homes, and that avoid more
expensive institutional costs.

Standards for Medicare currently include a requirement that,
before being issued a supplier number, the government (or its
contractor) must conduct physical on-site inspections to ensure
that the supplier meets all of the requirements.

The objective is to have the government review documentation
that proves compliance with the standards and enables the inspector
to view hours of operation, inventory, patient records and other
documentation that demonstrates the entity's legitimacy. If these
inspections are being conducted appropriately, then entities such
as those reported in Miami should not pass a physical site

In addition, Medicare's Program Integrity Unit is dedicated to
analyzing claims data and other information that helps to identify
potentially fraudulent or abusive billing activities after the
supplier is granted a supplier number. Today, the unit tends to
sample the larger claims volume providers disproportionately in
terms of both frequency and audit volume.

Thus, we must support the recommendations of the GAO report,
which urge Medicare to take a fresh look at the way in which it
audits new or rapidly growing suppliers, since today they are
largely not audited by the Unit or the PSCs. It is the fly-by-night
operators such as those reported in Miami that can easily fly under
this radar screen.

A specialist in health care legislation, regulations and
government relations, Cara C. Bachenheimer is vice president,
government relations, for Invacare Corp., Elyria, Ohio.
Bachenheimer previously worked at the law firm of Epstein, Becker
& Green in Washington, D.C., and at the American Association
for Homecare and the Health Industry Distributors Association. You
can reach her by phone at 440/329-6226 or by e-mail at