Telemarketing Alert Leaves Providers Vulnerable to False Claims

WASHINGTON — A special fraud alert issued last week by the
HHS Office of Inspector General leaves “virtually every
Medicare-enrolled DME provider open to liability for false claims,”
according to the American Association for Homecare.

Published in the Jan. 14 Federal Register, the OIG
alert said there is evidence that some DMEPOS providers have been
using independent marketing firms to contact beneficiaries. Even
though the method of contact is indirect, it is still prohibited,
the alert said.

The alert also pointed to cases in which providers have
contacted beneficiaries based on a physician’s written or verbal
order recommending DME. According to the OIG, physician orders are
not a substitute for a beneficiary’s written consent to be
contacted.

But calling that notion “impractical and unworkable,” AAHomecare
officials said they would ask the OIG to rescind that part of the
fraud alert.

According to an association update:

Nearly all HME items furnished to beneficiaries in their
homes result from a written or verbal order communicated initially
by the physician to the HME provider, who then contacts the
beneficiary to arrange for delivery of the item … Telephone
contact with a beneficiary based on a physician’s order is
fundamentally different from the telemarketing activities that
Congress addressed when it enacted section 1834(a)(17) of the
Social Security Act …

Longstanding Medicare policy recognizes and permits
providers to dispense HME in response to a physician’s verbal order
for the item.

Under the Social Security Act, providers are prohibited from
making unsolicited calls to beneficiaries for the purpose of
furnishing products unless one of three exceptions applies:

1. the supplier has written permission from the beneficiary to
   call;
2. the call pertains to an item the supplier has already provided
   to the beneficiary; or
3. the supplier has provided the beneficiary with an item during
   the past 15 months.

All claims resulting from an illegal phone call are considered
false and can result in civil and criminal charges, as well as
potential exclusion from federal health care programs.

“It is one thing for the federal government to be vigilant in
making sure Medicare claims are properly paid. It is another thing
for federal DMEPOS officials to fail to grasp, time after time, how
home medical equipment and related services are actually provided
to Medicare beneficiaries,” said AAHomecare President Tyler
Wilson.

“A workable system under Part B has to reflect the way the real
world operates and how patients, physicians and HME providers
interact. This latest OIG fraud directive completely misconstrues
fraud controls that are already in place and misunderstands how the
typical Medicare beneficiary expects to receive home medical
equipment.”

Industry attorney Jeff Baird agreed, calling the OIG alert
“illogical, overreaching and unfair to beneficiaries, physicians
and HME companies.

“The clear intent behind the telephone solicitation statute is
to prevent HME companies from cold-calling Medicare beneficiaries
for the purpose of selling Medicare-covered items to them,”
commented Baird, chairman of the Health Care Group at Brown &
Fortunato, Amarillo, Texas.

“Over the years, the OIG and CMS have hammered home their
position that ordering DME should be physician-driven, and
not supplier-driven. The physician has a position of trust
with the patient; the physician speaks for the patient. If the
physician orders an item and sends the order to the supplier, then
the physician is doing so on behalf of the patient. It is a matter
of convenience for the patient for the supplier, upon receipt of
the physician’s order, to call the patient and arrange for
delivery. This scenario comes nowhere close to the ‘unsolicited
telemarketing’ concerns raised by the OIG.”

Noting the fraud alert could have “severe repercussions and
unintended consequences” for providers, AAHomecare’s Walt Gorski,
vice president for government affairs, said the association has
requested a meeting with CMS about the fraud alert and is
developing a response to be sent to CMS and the OIG.

“We also contacted the OIG to express our shock and dismay for
their lack of understanding of how HME is provided to patients,”
Gorski said.

In the meantime, warned attorney Neil Caesar, president of The
Health Law Center, Greenville, S.C., “The OIG only issues these
alerts when they are aware of abuses, intend to pursue
investigations and prosecutions and want to eliminate anyone’s
ability to claim confusion or ignorance. So this is not a
theoretical communication.”

Caesar said he thinks providers can “expect scrutiny not only
for phone calls but also for Internet activities. And in-person
solicitations are also problematic — for example in an
assisted-living community.”

Read the two-page OIG report at http://www.oig.hhs.gov/fraud/docs/alertsandbulletins/fraudalert_telemarketing.pdf.