OIG Says States Don’t Enforce DME Enrollment Standards; AAHomecare Suggests Temporary Supplier Numbers

WASHINGTON–Most states in a 15-state study conducted by HHS’
Office of Inspector General do not routinely verify whether
providers are meeting DME enrollment standards, the agency said in
its semi-annual report to Congress.

The report, which covers Oct. 1, 2006, to March 31, 2007, also
noted that fewer than half the states in the study require Medicaid
providers to enroll in the Medicare program, which would require
them to adhere to Medicare standards.

The issue was only one of several industry-related items in the
report, which also recapped the OIG’s recommendation for a 13-month
oxygen cap (see HomeCare Monday, Sept. 18, 2006),
along with the results of 1,581 unannounced site visits in south
Florida released previously.

The agency said that in the first half of fiscal year 2007, it
had recovered $2.9 billion in audit and investigative
receivables.

The OIG reported exclusions of 1,278 individuals and entities
for fraud and abuse; 209 criminal actions against individuals or
entities engaging in crimes against departmental programs; and 123
civil actions, including False Claims Act and unjust enrichment
suits filed in federal district court and Civil Monetary Penalties
law settlements.

The 76-page report also included notice of an agreement with
Lincare to pay the government $1.2 million to resolve allegations
that, between January 1998 and December 2000, its Idaho facilities
submitted false claims to Medicare, Medicaid and the Veterans
Affairs programs. According to investigators, Lincare allegedly
submitted claims for home oxygen using falsified certificates of
medical necessity and without performing a required 30-day
review.

In its 15-state standards compliance study, the OIG said that
all of the states, which were not named, employed numerous provider
standards to safeguard their Medicaid DME programs. Those
safeguards included licensure, posting a sign with hours of
operation and obtaining surety bonds. However, the OIG said, the
majority of the states were not ensuring that those standards were
being upheld. According to the report, seven of the 15 states did
not even conduct routine site visits at initial enrollment.

In addition, the OIG said only six of the states either
routinely re-enrolled providers or had recent re-enrollment
initiatives to ensure providers met the standards.

During its unannounced south Florida visits, the OIG found that
45 percent of the companies did not comply with at least one of the
five standards under review, and 31 percent didn’t have a facility
at the address they had provided to Medicare (see HomeCare Monday, April 2).

Based on those findings, in March the OIG recommended that CMS
conduct more unannounced site visits and out-of-cycle inspections;
perform more rigorous background checks of applicants; increase the
prepayment review of DMEPOS claims; and deactivate the Medicare
billing numbers of suppliers that have been inactive for a 90-day
period.

In its current report, the OIG said CMS agreed to “take more
aggressive actions in identifying suppliers who are no longer in
business or do not meet basic supplier standards.”

But during its annual Washington Legislative Conference, held
June 5-7, the American Association for Homecare offered another
suggestion to acting CMS Deputy Administrator Herb Kuhn.

AAHomecare President and CEO Tyler Wilson recommended that new
Medicare providers should receive only a temporary supplier number
for the first six months of operation, that they be placed on “100
percent prepayment review” and that the National Supplier
Clearinghouse conduct an initial site visit within a year.

Kuhn said he would discuss the suggestion with CMS’ program
integrity office.