Do federal anti-fraud statutes and supplier standards apply?
by Jeffrey S. Baird
September 17, 2012

There are a number of federal statutes and regulations that govern HME providers. The “big four” are the: 1) Medicare anti-kickback statute; 2) telephone solicitation statute; 3) beneficiary inducement statute and; 4) supplier standards. Do they also apply to state Medicaid and Medicare Advantage patients?

1) Medicaid: The Medicare anti-kickback statute (AKS), 42 U.S.C. § 1320a-7b(b), applies to state Medicaid programs. The AKS states that it applies to “Federal health-care programs,” and that definition includes “any State health-care program.” Id. at § 1320a-7b(f)(2). A “State health-care program” is then defined as being “approved under subchapter XIX” of Title 42, Chapter 7 of the United States Code. Id. at § 1320a-7(h)(1). State Medicaid plans are approved under subchapter XIX and covered by the AKS.

Medicare Advantage: The AKS applies to “Federal health-care programs,” and that definition includes “any plan or program that provides health benefits, whether directly, thorough insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government.” Id. at § 1320a-7b(f)(1). As a federally funded plan or program to provide health benefits, Medicare Advantage is covered by the AKS.

2) Medicaid: The telephone solicitation statute (TSS), 42 U.S.C. § 1395m(a)(17), does not apply to a contact with an individual enrolled in a state Medicaid program unless they are also a Medicare Part B beneficiary. The TSS states that it applies to contacts with individuals “enrolled under this part,” meaning those enrolled in Medicare Part B. Id. at § 1395m(a)(17)(A). There is no indication that contacts with Medicaid beneficiaries are covered by the statute.

Medicare Advantage: The TSS applies here, and to those “enrolled under this part,” meaning Medicare Part B. Id. at § 1395m(a)(17)(A). As a condition of enrolling in Medicare Advantage under Part C, an individual must also be enrolled under Part B. Id. at § 1395w-21(a)(3)(A). Because all such enrollees must also be Medicare Part B enrollees, the statute will apply to all contacts with Medicare Advantage patients.

3) Medicaid: The beneficiary inducement statute (“BIS”), 42 U.S.C. § 1320a-7a(a)(5), applies to remuneration transferred to an individual enrolled in a state Medicaid program. The BIS states that it applies to “any individual eligible for benefits… under a State health care program (as defined in section 1320a-7(h) of this title)…” Id. Therefore, an interaction with an individual enrolled in a state Medicaid plan is subject to the statute.

Medicare Advantage: The BIS applies to “any individual eligible for benefits under subchapter XVIII” of Title 42, Chapter 7 of the United States Code. Id. The Medicare Advantage program falls under Part C of subchapter XVIII. See Id. at §§ 1395w-21-29. Therefore, as a patient eligible for benefits under Part C of subchapter XVIII, the statute applies to remuneration transferred to a Medicare Advantage patient.

4) Medicaid: The DMEPOS Supplier Standards (DSS), 42 C.F.R. § 424.57(c), do not apply to a business by virtue of it serving an individual enrolled in a state Medicaid program. The DSS apply to “DMEPOS suppliers,” and the regulations define that term as “an entity or individual… which sells or rents Part B covered items to Medicare beneficiaries.” Id. at § 424.57(a). There is no language indicating that the DSS apply to suppliers selling items to individuals enrolled in state health care programs.

Medicare Advantage: The DSS apply here. Part C of the statutes states that benefits must be administered by “providers and other persons that meet the applicable requirements” of Title 42 of the United States Code. 42 U.S.C. § 1395w-22(a)(1). Further, the Medicare Program Integrity Manual states that “No provider or supplier shall receive payment for services furnished to a Medicare beneficiary unless the provider or supplier is enrolled in the Medicare program.” Therefore, as a condition of becoming a contracted supplier with a Medicare Advantage organization, a DMEPOS supplier must be enrolled under Part B, which requires compliance with the DSS. When providing services to a Medicare Advantage patient, however, a supplier is not required to comply with the rules that are specific to individual patient interactions unless required by the Medicare Advantage organization contract.