I am all for getting rid of Medicare fraud and abuse. I understand what a problem it is across every part of the program. (Some time ago I ran across a scheme that involved fraudulent brain surgeries even.) I know that the scammers who bilk the system are costing us money when we don't have any to spare. And I'm glad the government has finally caught on that it's time to do something about the situation.
On the other hand, going after the criminals in the HME sector shouldn't include forcing small providers to the brink of bankruptcy.
A couple of months ago, I heard from one small Florida company that had received 90 denial letters from SafeGuard Services, the Zone 7 ZPIC auditor, on Feb. 1. That was just the beginning.
"Every single day the agency contracted by Medicare to carry out the audit sends us letters automatically denying the claims for payment submitted by our firm until all documentation is provided to them within 30 days, and then we must wait for 90 to 120 days for payment," according to Carolina Ferreiro-Diaz, the owner of Pharma-Express in Miami. "We firmly believe that this 100 percent [prepay audit] that stops payments to our company so radically is with the intention to put an economic strain on us, as well as on all of the other providers, and make our business impossible to operate, thus serving Medicare's goal of having less providers.
"All of this is without any prior history on our part of any fraud or anything of that sort," she said. Ferreiro-Diaz has written her senator and hired an attorney. At press time, the company was "still hanging on," said DME billing clerk Kevin Cabrera, "but it's getting close."
I recently got a note that paints the same picture from another small Florida provider.
"We are caught in the middle of a ZPIC," he wrote. "It continues and is getting worse. Our audits have been going on for six months now, and we have nothing other than the letters of denial based on such things as 'not medically necessary' for clients who have been getting [diabetic shoes and inserts] for years and years … We have denials based on 'not receiving' doctors' notes in a timely fashion, yet we have proof of delivery from the United States Postal Service. We have doctors' chart notes returned to our office because they were not stapled correctly.
"Denials for 'not medically necessary' seem to be popular, yet the doctors' chart notes we submitted clearly indicate 'medically necessary.' This requires us to send [the claim] back to redetermination and wait another 90 days for payment on top of the 90 days it took to receive the initial denial. On and on it goes.
"Our small company is compliant with every regulation out there. Six months of providing products only to be denied payment is bringing us closer to bankruptcy …
"Here is the interesting part of all this. I personally emailed HHSTips 24 months ago regarding what I considered to be a fraudulent DME provider. An investigator interviewed both myself and my wife regarding this fraudulent organization. The investigator sat in my dining room for the better part of Dec. 31, 2009, taking notes and asking questions.
"My small DME is in the throes of a ZPIC, and the company that I emailed HHSTips about is still in business (they have billed $15 million dollars worth). And we are being told these audits are to catch fraud. Something needs to be done."
Ninety letters on one day? Not stapled correctly? Come on, now.
Clearly, something must be done to stop fraud. But what's being done to small providers like these is creating a whole other kind of Medicare nightmare.
