Feds Crack Down on Power Wheelchair Fraud

Washington and Baltimore

On Sept. 9, the Centers for Medicare and Medicaid Services took drastic action to clean up billing fraud in the durable medical equipment industry. At the same time, the Department of Health and Human Services Office of Inspector General (OIG) said it is investigating the proliferation of DME fraud cases.

Responding to a surge in Medicare claims for power wheelchairs — and in the wake of a massive alleged fraud scheme in Houston revolving around the expensive equipment — CMS issued a 10-point initiative dubbed “Operation Wheeler Dealer” aimed at curbing fraud and abuse of the Medicare power wheelchair benefit. The federal campaign includes aggressive scrutiny of all new supplier-number applications and collaboration between CMS, DMERCs and law enforcement agencies to process fraud cases.

CMS will revise coverage policy for motorized wheelchairs to require — for the first time — that physicians see patients before prescribing a power wheelchair. The agency will also develop inherent reasonableness review guidelines, with motorized wheelchairs to be the first item analyzed for potential adjustments.

“Spending on power wheelchairs has increased nearly 450 percent over the last four years, an unprecedented growth in this benefit,” said CMS Administrator Tom Scully. “While many of these wheelchairs are provided by ethical suppliers and go to beneficiaries in need, we know that a great number of unscrupulous suppliers are promising free wheelchairs to beneficiaries who don’t need them. We are taking immediate action to stop these scams.”

According to CMS, Medicare costs for motorized wheelchairs are expected to reach $1.2 billion this year, growing from $289 million in 1999. In contrast, overall Medicare benefit payments rose only 11 percent during that same period. The number of Medicare beneficiaries with at least one claim for a motorized wheelchair rose from 55,000 in 1999 to almost 159,000 in 2002. The overall Medicare population rose only 1 percent per year during that same time frame.

CMS said its action will allow Medicare “to support honest providers and target those who are exploiting the program.” Acting Principal Deputy Inspector General Dara Corrigan warned that wayward suppliers are in for severe punishment. “The perpetrators of these fraudulent schemes face serious consequences, including fines, jail time and exclusion from doing business with Medicare and other federal health programs,” Corrigan said.

Some of the initiative’s mandates could mean that honest suppliers will also come under close examination. According to the plan, CMS will immediately begin “aggressively scrutinizing” all new applications for supplier numbers. The detailed screening will halt the issuance of any new supplier numbers until sometime in “early 2004,” CMS said. The intense review process affects all DME number applications, which “unfortunately … do not differentiate between providers who sell wheelchairs from those who sell only crutches or [incontinence supplies],” a CMS spokesperson said.

“While we hope to find a way to expedite the non-wheelchair applications, right now it applies to all DME all over America,” the spokesperson continued. “People should still submit the applications but understand it may take longer. It’s like a wreck on the highway: Eventually they’ll clear the road and you’ll get through, but there’s a backup in the meantime.”

In addition, claims for power wheelchairs will undergo special federal scrutiny from CMS clinicians before payment is made. Other provisions in the plan include a requirement that DME regional carriers immediately adopt local medical review policies, and formation of consistent national medical review policies by DMERCs.

CMS plans to start the clean-up in Texas, where investigators recently froze at least $6 million in assets belonging to Houston-based HME providers and doctors who allegedly participated in a scheme to bill Medicare a total of $32 million for unnecessary power wheelchairs, according to Michael Shelby, U.S. Attorney for the Southern District of Texas. In Harris County, Texas, alone (where Houston is located), Medicare and Medicaid paid for more than 31,000 power wheelchairs in 2002, a dramatic increase over the 3,000 claims for the same items in 2001, CMS said.

Specifically addressed as part of “Wheeler Dealer’s” 10-point plan, payments for power wheelchairs in Harris County will have to be “personally and individually approved” by CMS staffers on a special task force. Existing power wheelchair suppliers in the market will be required to attend mandatory training on wheelchair coverage and medical review policies.

Industry response to the action in general favors CMS’ tough stance. According to Kay Cox, president and CEO of the Alexandria, Va.-based American Association for Homecare, “AAHomecare and its members join CMS in refusing to tolerate the theft of taxpayers’ hard-earned dollars set aside for the care of Medicare beneficiaries.

At the same time, we urge caution in implementing this new initiative. Law-abiding providers work hard to serve Medicare beneficiaries in their communities, and they should not be unfairly penalized.”

To combat fraud and abuse, AAHomecare recommends the use of medical necessity documentation giving providers clear guidelines on the documentation needed to support Medicare claims for power wheelchairs. The association also supports implementing coding and coverage policies that would allow appropriate payment for products while “preserving Medicare beneficiaries’ access to the appropriate power wheelchair for their conditions.”

For a copy of the full CMS action, go to www.cms.gov and type “Wheeler Dealer” in the search bar.

For breaking news, go to www.homecaremonday.com, the electronic news service of the home medical equipment industry.