’60 Minutes’ Points TV Finger at Medicare Fraud

ATLANTA — The media heat is back on. This time it is the
venerable news magazine “60 Minutes,” which ran a segment on Oct. 25 focusing on DME fraud in
South Florida and Los Angeles. But this time there’s also a twist,
industry proponents say: The finger of blame points at Medicare for
not stopping it.

Complete with a recently convicted criminal named “Tony” in
disguise, the 15-minute vignette ended with this memorable exchange
in reference to equipment suppliers in South Florida:

Commentator Steve Kroft: “If I went to the phone book and
looked under medical equipment suppliers, 95 percent of the
companies would be phony?”

Convicted criminal: “Yes, sir.”

Reaction to the story ranged from outrage to relief that the
focus was largely on obvious criminals who never had an interest in
serving patients.

“This story, while not reflecting very well on suppliers, did
not show a legitimate supplier who was committing fraud, only
crooks who entered the business solely to make easy money,” said
Wayne Stanfield, president and CEO of the National Association of
Independent Medical Equipment Suppliers. “Only CMS can end the
fraud by holding contractors accountable for their actions and
making significant changes to the inspection and oversight process
for suppliers.”

“I’ve already had a couple conversations with the people at ’60
Minutes’ to straighten out some of the misleading
statements made in that piece, which chiefly focused on the
failure of Medicare to keep criminals out of the business,” said
Michael Reinemer, vice president, communications and policy, for
the American Association for Homecare.

“AAHomecare has been all over the fraud issue for many years.
We’ve worked hard to get out in front in the media and on Capitol
Hill with our own 13-point
anti-fraud plan.

“To frame this story,” Reinemer continued, “it’s worth noting
that [AAHomecare President] Tyler Wilson has been on the Fox
Business channel discussing our efforts to stop fraud. One of our
board members, Joel Marx, spent 30 minutes on C-SPAN talking about
the value of home
care last month. AAHomecare was quoted on the front page of
USA Today saying that the federal government has done a
terrible job of keeping criminals out of Medicare.”

On the positive side, provider Tim Pederson pointed out that the
story exposed problems with CMS and supplier numbers.

“I think the AAHomecare 13-point plan would address many of
these issues,” said Pederson, CEO of WestMed Rehab, Rapid City,
S.D. “When I compare my last [National Supplier Clearinghouse] site
visit to the complete lack of oversight documented on the news
story, I can only shrug. When the NSC came to my business, they did
so unannounced, and they conducted a thorough evaluation complete
with pictures and a review of medical records and inventory.

“Instead of focusing on catching the real criminals, CMS
continues to spend resources to make it more difficult for
legitimate providers to conduct business,” added Pederson. “The
real criminals don’t care how difficult it is for legitimate
suppliers because, rather than provide services to beneficiaries,
they merely send a bill to Medicare for items not provided. In this
day and age, the existence of these crime rings is
unacceptable.”

With CMS and law enforcement officials expressing exasperation
on camera, it only begged the question: Why not do what industry
advocates have been suggesting for years?

“We as an industry have been trying to raise the barriers to
entry for years, and we have laid out points to CMS regarding the
so called pay-and-chase policy,” said Tom Ryan, president and CEO
of Homecare Concepts, Farmingdale, NY. “We have said to do site
visits on any new provider before a number is given, but
make sure the NSC contracted agent knows what to look for. We have
suggested prepay audits on new providers, and certainly the ability
to data mine real-time to see these aberrations of going from
$30,000 one month to $800,000 the next month — these would
set off some red flags to freeze payment and audit the claims.”

Indeed, AAHomecare has put its 13-point plan to curb fraud in
front of Congress several times, once in 2008,
again in February this year, and again yesterday with a
statement applauding Health and Human Services Deputy Secretary
William Corr’s statement to the Senate Judiciary Committee that the
federal government is committed to “stop fraud before it
happens.”

“The association has zero tolerance for fraud and remains
committed to eliminating fraud and abuse in the Medicare program.
We are eager to work with Congress, the White House, the Centers
for Medicare and Medicaid Services (CMS), and federal law
enforcement agencies in efforts to ensure the integrity of the
Medicare program. To that end, we continue to offer suggestions for
additional fraud and abuse prevention strategies over and above
existing laws,” AAHomecare said.

“Our legislative action plan is designed to protect these
patients and their families — as well as the American
taxpayers — by stopping fraud and abuse in the Medicare
system at the front end of the payment system rather than after the
fact. The plan targets fraud and abuse at the source through
proposed policies that will ensure that providers who participate
in Medicare are legitimate businesses and that disreputable actors
are locked out of the system. Among the provisions detailed in the
legislative proposal are more rigorous quality standards, increased
penalties for fraud, mandated site inspections for new providers,
and real-time claims analysis.”

The 13 specific recommendations in the plan include:

1) Mandate Site Inspections for All New Home Medical
Equipment Providers. A July 2008 GAO report underscored
the need for CMS to ensure that its contractors are conducting
effective site inspections for all new applicants for a Medicare
provider number.

2) Require Site Inspections for All HME Provider
Renewals. All renewal applications should require an
in-person visit by the National Supplier Clearinghouse (NSC), the
contractor that CMS uses to ensure integrity in the Medicare
program.

3) Improve Validation of New Homecare
Providers. Additional validation of new providers should
be included in a comprehensive and effective application process
for obtaining a Medicare provider number.

4) Require Two Additional Random, Unannounced Site
Visits for All New Providers. Two unannounced site visits
should be conducted by NSC during the first year of operation for
new HME providers.

5) Require a Six-Month Trial Period for New
Providers. The NSC should issue a provisional,
non-permanent supplier number to new suppliers for a six-month
trial period. After six months of demonstrated compliance, the
provider would receive a “regular” supplier number.

6) Establish an Anti-Fraud Office at Medicare.
CMS should establish an office with the sole mandate of
coordinating detection and deterrence of fraud and improper
payments across the Medicare and Medicaid programs.

7) Ensure Proper Federal Funding for Fraud
Prevention. Increase federal funding to ensure that NSC
completes site inspection and other anti-fraud measures.

8) Require Post-Payment Audit Reviews for All New
Providers. Medicare’s program safeguard contractors should
conduct post-payment sample reviews for six months’ worth of claims
submitted to Medicare by new providers.

9) Conduct Real-Time Claims Analysis and a Refocus on
Audit Resources. Medicare must analyze billings of new and
existing providers in real time to identify aberrant billing
patterns more quickly.

10) Ensure All Providers Are Qualified to Offer the
Services They Bill. A cross-check system within Medicare
databases should ensure that homecare providers are qualified and
accredited for the specific equipment and services for which they
are billing.

11) Establish Due Process Procedures for
Providers. CMS should develop written due process
procedures for the Medicare provider number process, including
issuance, denial and revocation of the Medicare supplier number.
The procedures must include, for example, an administrative appeals
process and timelines.

12) Increase Penalties and Fines for Fraud.
Congress should establish more severe penalties for instances of
buying or stealing beneficiaries’ Medicare numbers or physicians’
provider numbers that may be used to defraud the government.

13) Establish More Rigorous Quality Standards.
Ensure that all accrediting bodies are applying the same set of
rigorous standards and degree of inspection to their clients.

According to Reinemer, “The key thing is for every HME provider
and every state association to get involved and work with their
local media. There is no silver bullet that is going to make this
story go away since we can’t fix the fraud problem — Medicare
has to do that. It’s going to require real work for a sustained
period by everyone in the HME sector.”

Reinemer noted the association’s ongoing Stand Up for
Homecare PR offensive. “We are trying to make it easy for
everyone to pitch in to get accurate media coverage for home care,”
he said.

Read AAHomecare’s response to “60 Minutes.”

Check out the “60 Minutes” story.

For more information on the Stand Up for Homecare campaign, see
www.aahomecare.org/standupforhomecare.

To report Medicare fraud, the Office of the Inspector General
maintains a confidential hotline:
Phone: 800/HHS-TIPS (800/447-8477)
Fax: 800/223-8164
Email: [email protected]
Mail: Office of the Inspector General, HHS TIPS Hotline, P.O. Box
23489, Washington, DC 20026