WASHINGTON--In a Senate conference on Monday, Sens. Mel Martinez, R-Fla., and John Cornyn, R-Texas, discussed the need for the federal government to shift its policies regarding Medicare fraud.
In June, the senators introduced the Seniors and Taxpayers Obligation Protection Act of 2008 (S.3164), or STOP Act, which they said will give federal agencies the tools they need to crack down on fraud before it occurs.
“Our bill will give agencies the tools to stop fraud at the front end rather than having the Department of Justice get involved at the back end after the fraud has occurred,” said Martinez. “Instead of continuing the current practice of pay and chase, the federal government needs to shift to a policy of detect and prevent.”
The bill would help to improve HHS' detection methods and place billing statements under increased scrutiny, the senators said.
While HME stakeholders said the proposal could be promising in curbing Medicare fraud in general, some worried that the senators' frontal attack might focus only on DME. (See “Combating Fraud and Abuse” in this issue.) A statement from Martinez about the legislation singled out the sector, noting that “items such as durable medical equipment are notoriously known to be falsely billed at taxpayer expense--often to fake companies with nothing more than a P.O. Box.”
Under the measure, HHS would identify the 50 counties most vulnerable to fraud based on the degree of county-specific reimbursement and analysis of payment trends. These counties would be designated as “high-risk areas.”
In addition, the legislation would:
--Require monthly verification of the accuracy of charges for Part B claims from physicians in high-risk areas. At the end of each month, HHS would provide physicians and group practices with a detailed list of claims that were submitted to review and verify.
--Require HHS to implement prepayment fraud detection methods in high-risk areas, including:
- Pre-enrollment site visits for providers with “the highest probability” of committing fraud;
- Data analysis to establish prepayment claim edits to target claims for items or services that “are most likely to be fraudulent;” and
- Prepayment benefit integrity reviews for claims for items or services that are suspended as a result of such edits.
--Require HHS to conduct a study on the use of technology (similar to that used in the analysis of credit card charging patterns) to provide real-time data analysis of claims to identify and investigate unusual billing or order practices that could indicate fraud or abuse. The study would address whether such technology could be used to identify unusual billing or order practices by an individual supplier or for a certain HCPCS code in a particular area without alerting potentially fraudulent providers and allowing them to escape. The study would also look at how such technology could provide for the timely review of claim logs.
--Require HHS to require carriers, prior to paying a DMEPOS claim, to confirm with the National Supplier Clearinghouse that the Medicare identification number of the supplier is active. HHS would establish an online database similar to that used for the National Provider Identifier “to enable providers of services, accreditors, carriers and the NSC to view information on specialties and the types of items and services each supplier has indicated on the CMS-855S Medicare enrollment application submitted by the supplier.”
--Require that HHS establish a tracking system for certain DME with the label of such equipment to bear a unique identifier, or serial number. After issuing an item to a supplier, manufacturers (or wholesalers) would develop a product description for the item including its unique identifier, HCPCS code, the name of the supplier the item was shipped to and the supplier's Medicare identification number. HHS would set up and maintain a database with these unique product identifiers, and manufacturers would submit the product descriptions they developed to HHS for storage in the database.
--Direct HHS to put the surety bond requirement for suppliers enacted under the Balanced Budget Act of 1997 in place within six months of the enactment of S. 3164.
In February, Martinez, Cornyn and several other senators proposed upping a surety bond requirement for DMEPOS providers to $500,000. But after an outcry from industry groups saying the measure would cause undue hardships on small providers, the senators quickly said they would reconsider.
A section of the BBA requires a $50,000 surety bond for DME providers as a deterrent to fraud and abuse. However, the government never implemented the requirement, and in July of last year, CMS proposed a $65,000 bond be required. The agency said that amount was an inflation-adjusted figure from the $50,000 amount included in the 1997 law. (See HomeCare Monday, Feb. 25.)
The STOP Act also requires HHS to change the current system of using Social Security numbers as the Medicare Beneficiary Identifier used on Medicare cards.
“This will lead to less fraud and greatly reduce identity theft among our seniors,” said Martinez. “It will also allow seniors and the government to easily take a Medicare recipient's number out of circulation when fraud is detected.”
“Our bill represents a first step in fighting Medicare fraud, and will put us on the right track to saving taxpayer money and protecting our seniors,” Cornyn said. “I hope that everyone will notice the urgency of this issue and make it a top priority. Our seniors, our providers and our taxpayers deserve better accountability from Medicare.”
The bill has been referred to the Senate Finance Committee, which oversees Medicare.
For the full text of the Seniors and Taxpayers Obligation Protection Act of 2008, go to http://thomas.loc.gov and enter “S. 3164” in the search bar.