AAHomecare Drafts Proposal to Root Out Fraud and Abuse

ARLINGTON, Va.–In a proactive move to provide CMS and federal
legislators alike with concrete strategies for stemming fraud and
abuse in the home medical equipment industry, the American
Association for Homecare is crafting a plan that could be presented
by the end of the year.

Among its possible components are increased scrutiny of new HME
providers, real–time claims analysis, accreditation and
unannounced site visits.

“We are still in the formative stages of this proposal,
and we are working with our members to collect best
practices,” Walt Gorski, vice president of government affairs
for AAHomecare, said last week. “HME providers, we believe,
are the most effective at determining these policies, since they
are on the ground and know what works, what is a hassle factor and
what doesn’t work.”

Already, AAHomecare has, in the last year, offered input on two
separate anti-fraud efforts, including the proposed implementation
of a surety bond requirement for providers and the draft of the
Seniors and Taxpayers Obligation Protection Act of 2008 (S. 3164),
or STOP Act. The latter requires the Secretary of Health and Human
Services to change the identifier used to identify Medicare
beneficiaries under the program.

The need for the industry to step forward with an anti-fraud
plan has, however, become increasingly obvious in the face of
derogatory reports that are appearing with alarming frequency in
mainstream media such as the Wall Street Journal and the
New York Times, Gorski and others said.

“The industry cannot leave its future in the hands of
others,” said Gorski. “Recent reports highlighting
improper behavior on the DMEPOS benefit validate much of what the
HME community has been saying for a very long time: CMS has not
adequately policed the program and kept criminals from getting
supplier numbers.

“Under no circumstance should Medicare provide a supplier
number to a broom closet that includes a bucket of sand and a
wrench,” he stated, referring to a government sweep that
found hundreds of alleged providers in South Florida and elsewhere
had given fraudulent addresses to Medicare. (See
HomeCare Monday, July 9, 2007.)

Industry stakeholders roundly applauded the idea of the
proposal, which will seek to stop fraud at the front end of the
payment process rather than relying on the current
“pay-and-chase” system, AAHomecare officials said.

“It’s the realization that, as an industry, we have
to be proactive rather than reactive,” said John Gallagher,
vice president of government relations for Waterloo, Iowa-based VGM
Group. “The drumbeat [of legislators] is that ‘you in
the industry have to come up with concrete steps to fight fraud in
the industry. If you don’t, we’re going to do it for
you, and you don’t want that.’”

The proposal is something that “we could take to the Hill,
but immediately, we could take it to CMS,” said Cara
Bachenheimer, senior vice president of government relations for
Invacare, Elyria, Ohio.

If the industry is to gain more credibility in Washington,
“we have to somehow stem this tide of fraud and abuse that is
happening,” Bachenheimer noted. “We need to take a
slightly different tack in Washington. We can’t be up there
blaming CMS. That doesn’t gain us any traction with the
policymakers. The industry needs to elevate itself, take a more
responsible role in addressing the problem.”

Coming up with anti-fraud measures that are both internal–that
is, coming from within the industry–and external, such as actions
CMS should take, will help, she believes.

“It’s good these discussions are going on, a good
time to have them,” said Seth Johnson, vice president for
government affairs for Pride Mobility Products, Exeter, Pa. It is
unlikely that there will be any further legislation pertinent to
HME this year, he said, but the industry must be braced for a new
Congress, a new administration and new CMS leaders who will come on
board next year.

“We need to bring the industry together, get what the
framework would look like and, once there is agreement on the
principles or provisions, then begin selling that in discussions
[with legislators and regulators] to advance that proposal, “
he said.

Johnson also believes the plan will allow the HME industry to
have a say in its fate. “They really do want to focus on
addressing this [fraud-and-abuse] problem,” he said about the
nation’s lawmakers. “We really have an obligation as an
industry to provide them with what we’d like to see, and if
we don’t do that, they are going to do something on their
own. It’s better to be very intimately involved in the
process.”

While specifics of the plan have not yet been decided, there are
some general concepts that will likely make the final proposal. It
is, for example, probable that several points will target
“the most vulnerable area of the DMEPOS benefit, which is
predominately new suppliers,” Gorski said. “In essence,
how do you better validate that a supplier seeking a supplier
number is a real provider?”

The answer, he said, could lie in real-time data, unannounced
site visits and audits for an initial amount of time to ensure that
the entity is serving Medicare beneficiaries and providing services
for which they are billing

“That is an initial first step that we think is necessary
toward improving the image of the HME community,” Gorski
said.

Accreditation is another fraud-and-abuse-fighter, he said,
because it helps monitor the monitors. “The National Supplier
Clearinghouse is supposed to do a site visit for each new provider
and upon re-enrollment every three years, but it appears that is
not taking place,” Gorski said. “Accreditation is a way
to double-check that CMS is policing its [monitors].”

Gallagher said some stakeholders, himself included, champion
establishing an HME licensure board so the industry can police
itself much the way physicians and pharmacists do.

”Right now, policing is not being done. If you know of
fraud in your area, you turn it in and nothing happens. The
industry has been screaming for years, ‘What are you doing,
CMS’? and years and millions of dollars later, CMS wakes up
and says, ‘Oh, you fraudulent providers.’ Let’s
wrestle that away from them and let us be like the docs and
pharmacists and police our own.”

There has also been talk of establishing escalating penalties
with a “third-time-you’re-out” rule for providers
who skirt the rules, and surety bonds for new suppliers.

“But we have to come to a consensus,” said
Gallagher, who would like to fast-track the process so the industry
can start selling the plan to legislators and regulators.

“Most likely the legislation will be in draft form this year
for introduction in a new Congress next year,” said Gorski,
who added that he welcomes any ideas on rooting out fraud and
abuse. He can be contacted at [email protected].