Hello, OIG?

A collective industry gasp could be heard across the country after the Office of Inspector General issued its “Updated Special Fraud Alert on Telemarketing by Durable Medical Equipment (DME) Providers” in January.

It’s not that anyone disagrees with the original intent of the telemarketing prohibition that Congress put in statute in the early 1990s. The problem stems from the OIG’s statement that DME providers who contact beneficiaries to carry out a physician’s verbal or written order violate this prohibition and expose themselves to possible exclusion from the Medicare program, as well as to potential liability for false claims, if they submit claims arising from those contacts.

The telemarketing prohibition, added to the Social Security Act by Congress in 1992, was directed at unsolicited telemarketing practices. These “cold calls” involved unscrupulous actors who would obtain lists of beneficiaries and call them in an attempt to have the beneficiaries go to their doctor and ask them for a prescription for DME items they did not need. Congress was concerned that this practice inappropriately increased Medicare spending for medically unnecessary medical equipment.

The OIG’s fraud alert states that DME providers would have to have the beneficiary’s written authorization before contacting the beneficiary to deliver DME ordered by the physician, since written beneficiary authorization is one of three exceptions to the overall telemarketing prohibition. The OIG is stating that calling the beneficiary as a follow-up to a physician verbal order is akin to unsolicited telemarketing.

There are multiple problems with both the OIG’s analysis and its conclusion about what is an entirely ethical and pragmatic practice. At best, the OIG has an extremely limited understanding of how physicians order DME items for their patients — and how physicians expect DME providers to fulfill those orders. Moreover, this normal medical practice should not violate the telemarketing prohibition because the DME provider’s telephone contact has been solicited from the prescribing physician, who has determined that the beneficiary has a medical need for the item. The telephone contact is, therefore, implicitly authorized by the beneficiary, and is explicitly authorized by the prescribing physician. This should not fall into the category of unauthorized telemarketing.

The OIG should understand that the DME provider’s telephone contact with a beneficiary, based on a physician’s order, is fundamentally different from the telemarketing activities that Congress addressed when it enacted the telemarketing prohibition. When the physician communicates the order directly to the DME provider, he has already determined that the item is medically necessary. That physician-to-DME provider communication is the critical link, in most instances, to ensuring that the beneficiary receives the item the physician has ordered.

Further, the beneficiary relies upon the physician to make that contact with the DME provider to ensure access. This practice is for the benefit of the consumer, who often is too frail or sick to provide some kind of written authorization from the DME provider first to coordinate delivery.

Many DME items are prescribed when the beneficiary is being discharged from the hospital and that beneficiary has a medical need for a hospital-type bed and/or oxygen. The hospital discharge planner expects the items to be delivered within hours of when the order is placed to ensure timely discharge. The physician expects the items to be delivered in a timely manner to ensure that his patient has access to them. The beneficiary relies on the team of medical professionals, including the DME provider, to get the items the physician has ordered.

Long-standing Medicare policy has explicitly recognized and allowed DME providers to dispense most items in response to a physician’s verbal order. In these instances, the physician communicates the order directly to the provider who, in turn, conducts the intake and assessment based on a written confirmation of the physician’s verbal order, later ratified by the physician’s signature and date. The communication between the provider and the physician’s office ensures that the order is accurately conveyed to the DME provider and promotes the timely delivery of services consistent with the beneficiary’s medical need.

Because DME providers may not bill Medicare for the item until they have a written order from the physician, the Medicare program is protected from any improper utilization or other abusive practices.

This practice is fundamentally different from the clearly inappropriate mass telemarketing practices with which Congress was concerned. The legitimate practice we are concerned about is ensuring that, after the physician has determined that a beneficiary has a medical need for the item, beneficiaries receive items the physician has ordered in a timely fashion.

Industry groups such as the American Association for Homecare are actively communicating with the OIG and CMS to rescind or clarify this OIG special fraud alert. Stay tuned for updates.

The OIG’s Special Fraud Alert was published in the Federal Register on Jan. 14.

Read more Washington Wit & Wisdom columns.

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 at 440/329-6226 or [email protected].