CMS data inconsistent in showing connection between fraud control and claims decline in Round 1 areas

The Centers for Medicare & Medicaid Services released statistics last week to support its assertion that better control of fraud and waste is causing HME claims to fall dramatically in areas where Round 1 of competitive bidding has been enacted. But an analysis of the data by HomeCare indicates that the numbers are inconsistent with the CMS position.

The supporting data released by Medicare showed that before competitive bidding was implemented spending per beneficiary for DME products in Round 1 areas was much higher than other parts of the county—an indication that fraud and waste were much more prevalent in those areas. Thus, when a report recently issued by economist Peter Cramton showed that claims had declined precipitously in Round 1 areas after competitive bidding was implemented, CMS concluded that the program was eliminating the obvious fraud and waste.

But the data lacks consistency on that point.

For example, CMS found spending per beneficiary for DME in the Miama Round 1 CBA averaged $428.44 before competitive bidding, and spending per beneficiary for DME in the Riverside, Calif., Round 1 CBA averaged $220.93 before competitive bidding. Meanwhile, spending per beneficiary in the Chicago area, which was not included in Round 1, averaged $160.

So, it makes sense, according to CMS, that claims would drop dramatically after competitive bidding controls were implemented—so levels in Round 1 areas like Miami and Riverside would fall to be more in line with places like Chicago. However, it would also make sense that claims—and DME spending—would drop at twice the rate in Miami as in Riverside since spending was twice as high in Miami before the program was implemented. That did not occur, according to Cramton’s report.

On average, claims in seven categories of HME products in Miami dropped 76 percent. In Riverside, the average was 69 percent. So the supporting data indicates that better controls for waste and fraud may be having a small impact, but nothing on the scale indicated by the large declines in the Cramton study.

CMS declined requests from HomeCare for more information or data.

Meanwhile, the National Association of Independent Medical Equipment Providers (NAIMES) on Friday lambasted the CMS for blaming the decline in claims on fraud and waste.

Cramton’s analysis of CMS data found that HME claims declined dramatically in all nine areas where Round 1 was implemented, and Cramton concluded that Medicare beneficiaries in those areas may be losing access to services. Cramton has said his report is preliminary, and he needs more data from CMS.

NAIMES President Wayne Stanfield also called on CMS to release more data, and said an investigation by the Government Accounting Office is warranted to sort out exactly what is happening in Round 1 areas.

“It is time that Congress demands that CMS provide the data to back up their statements,” Stanfield said in a press release issued Friday. “If their statements regarding the fraud and abuse are true, it shows the incompetence of CMS to manage the Medicare program. Not one penny is paid by Medicare to ANY provider or suppliers unless CMS has issued a billing number. Trying to solve a problem they allowed to happen by destroying the lives and jobs of thousands of people who own or work for DME businesses is government ‘out of control.’”

See the full story with CMS statements that triggered the NAIMES response  here.

Dave Parks is editor of HomeCare