Getting Rid of Fraud

As the new Democratic Congress began examining Medicare and Medicaid issues after the Bush administration unveiled its 2008 proposed budget, some ugly fraud and abuse stories were highlighted at House and Senate hearings held to examine issues in these programs. And yes, those stories included our HME industry, particularly the Miami area.

As an industry, we cannot afford to be the subject of any further smearing on Capitol Hill. The few friends and supporters we have will disappear, and our problems will be far greater than they are currently. So here’s what I recommend that we, as an industry and as individual businesses, need to do.

We must first publicly declare that we are committed to working with the government to help eliminate fraud and abuse in the Medicare program. We must make it clear that any level of intentional fraud is unacceptable, and that we are outraged at the allegations regarding the level of fraud and abuse that appears to be occurring in the Miami area.

At the same time, it is important for policymakers to understand that Medicare’s rules, regulations, requirements and paperwork associated with billing the program are extremely arduous. For example, rules and regulations change frequently, and often a seemingly minor change — such as the recent conversion from one DMEPOS Program Safeguard Contractor administrator to another — can result in a number of misunderstandings or misapplication of existing regulations.

Even a Government Accountability Office report last year acknowledged that a certain percentage of what it characterizes as “improper payments” actually result from honest mistakes, typographical errors or other administrative issues associated with billing rather than from intentional and overt fraud and abuse.

Another critical point for legislators is that the industry has for many years been asking CMS and Congress to require more stringent Medicare supplier standards to ensure that only legitimate entities are able to receive a supplier number and bill the Medicare program. We continue to believe that the current requirements, while generally stringent, can be strengthened in terms of both the way in which new provider numbers are granted by the National Supplier Clearinghouse and the subsequent pre- and post-payment audit sampling methods that are used to identify potential fraud and abuse.

In the fight to eradicate fraud and abuse, however, CMS must continue to ensure that beneficiaries are able to receive medically necessary items that their licensed physicians prescribe for them. We must caution policymakers not to lose sight of ensuring that seniors and people with disabilities have access to medically necessary items that enable them to maintain their independence, dignity and quality of life within their homes, and that avoid more expensive institutional costs.

Standards for Medicare currently include a requirement that, before being issued a supplier number, the government (or its contractor) must conduct physical on-site inspections to ensure that the supplier meets all of the requirements.

The objective is to have the government review documentation that proves compliance with the standards and enables the inspector to view hours of operation, inventory, patient records and other documentation that demonstrates the entity’s legitimacy. If these inspections are being conducted appropriately, then entities such as those reported in Miami should not pass a physical site inspection.

In addition, Medicare’s Program Integrity Unit is dedicated to analyzing claims data and other information that helps to identify potentially fraudulent or abusive billing activities after the supplier is granted a supplier number. Today, the unit tends to sample the larger claims volume providers disproportionately in terms of both frequency and audit volume.

Thus, we must support the recommendations of the GAO report, which urge Medicare to take a fresh look at the way in which it audits new or rapidly growing suppliers, since today they are largely not audited by the Unit or the PSCs. It is the fly-by-night operators such as those reported in Miami that can easily fly under this radar screen.

A specialist in health care legislation, regulations and government relations, Cara C. Bachenheimer is vice president, government relations, for Invacare Corp., Elyria, Ohio. Bachenheimer previously worked at the law firm of Epstein, Becker & Green in Washington, D.C., and at the American Association for Homecare and the Health Industry Distributors Association. You can reach her by phone at 440/329-6226 or by e-mail at [email protected].