OIG Fraud Report Hits Just Days Before Industry Takes to Capitol Hill
WASHINGTON–Once again, stories of DME fraud and abuse showed up
in headline news last week following the release of a report by the
HHS Office of Inspector General, which found that, in Los Angeles
County alone, 115 of 905 suppliers (13 percent) did not maintain
physical facilities or were not open during unannounced site
visits.
The report, released just days before the industry took to
Capitol Hill during AAHomecare’s Washington Legislative Conference
Thursday, was reported by The Associated Press and also
detailed in a March 3 story in the Los Angeles Times. It
added to the string of negative press reports on fraud in the
industry, which has received recent drubbings from the New York
Times, National Public Radio and “NBC Nightly News with Brian
Williams.” (See
HomeCare Monday, Dec. 17, 2007.)
But while the mainstream press continues to focus on fraud, HME
advocates are asking tougher questions, namely “Why are the good
providers never recognized?” and “Where was the National Supplier
Clearinghouse in all of this?”
“The frustration we have as an industry is where was the NSC for
all of these years?” questioned consultant Mary Ellen Conway,
president of Capital Healthcare Group, Bethesda, Md. “You get your
Medicare supplier number from the NSC, and they are required to pay
a site visit and ensure you are a legitimate business–so where
have they been?”
John Gallagher, vice president of government relations for
Waterloo, Iowa-based VGM Group, echoed similar questions about the
NSC’s role in preventing fraud, and wondered why it is that fraud
reports always seem to surface when the industry is taking steps
toward action.
“It is not by coincidence that this story comes out at this
time,” Gallagher said. “You may recall last year prior to
[Congress’] vote on the ‘doc fix’ that a fraud story came out at
that time. Each time when crucial activity is happening on the Hill
and DME is in the sights by Congress for offset [funding], out
comes a fraud-and-abuse story in some paper with no names, just
sources from HHS or CMS or ‘congressional staff.’”
Wayne Stanfield, president and CEO of the National Association
of Independent Medical Equipment Suppliers (NAIMES), responded with
a letter to LA Times writer Molly Hennessy-Fiske outlining
the industry’s position. In the letter, Stanfield states:
“While we totally support any actions to rid the industry of
fraud and abuse in any form, it is the criminals such as you talk
about that tarnish the good name of the tens of thousands of
quality suppliers.
“The piece of the puzzle left out of your article is that NO
company can bill Medicare for anything until Medicare and their
contractors approved them and issues the suppliers numbers allowing
them to bill. If there are fraudulent companies doing fraudulent
billing, it is because CMS does not hold its own contractors
accountable for their actions. The OIG has routinely reported
problems [in] the oversight of Medicare with little results from
such reports. Creating more barriers for entry will not resolve the
problem, but enforcement of the existing standards and policy
will.
“The timing of articles such as yours always seems coincide with
efforts by the true suppliers, caring for the millions of Medicare
beneficiaries, to raise awareness and affect change to policy
through lobby efforts. This article just happens to precede the
industry Legislative Conference in Washington this week.”
While coverage of the OIG report was mostly negative, one quote
from CMS Program Integrity Director Kimberly Brandt shows the
industry’s message about legitimate providers has not gone
completely unheard. When asked about the fraudulent providers,
Brandt told the AP, “These aren’t real medical
suppliers.”
For its report, the OIG focused on four requirements: 1)
suppliers must maintain physical facilities; 2) be accessible
during business hours; 3) have visible signs; and 4) post hours of
operation. Suppliers’ billing patterns also were analyzed.
The report stated 30 of the investigated suppliers did not
maintain physical facilities, and 85 were not accessible during
business hours. The OIG said Medicare allowed $21 million in the 12
months beginning July 1, 2006, for these suppliers’ claims.
In addition to the findings on vacant facilities and unmanned
offices, another 79 suppliers (9 percent) were open but did not
meet at least one of the two additional requirements: 78 suppliers
did not post hours of operation, and five suppliers did not post
signs indicating a business name. Four suppliers did not meet
either requirement.
An additional 124 suppliers (14 percent) met the requirements,
but the OIG noted their claims had in common an “atypical”
characteristic: More than half of the Medicare beneficiaries for
these companies did not receive other Medicare services (such as an
office visit) from the ordering physician within a six-month period
preceding the claim.
Even though CMS is requiring all DMEPOS suppliers in the Los
Angeles and South Florida areas to re-enroll with the NSC as part
of a two-year anti-fraud demonstration, both Conway and AAHomecare
Vice President Michael Reinemer said the recent report findings
mean that California can expect a deluge of scrutiny in the
future.
“There has been a serious, well-known fraud problem in Los
Angeles where criminals have posed as legitimate DME providers, so
this story about the OIG action is no surprise,” Reinemer
explained. “Similar steps have been taken in South Florida.”
“They’re targeting California and South Florida as high-fraud
areas,” said Conway, noting that seven of the 70 MSAs selected for
round two of competitive bidding are located in California. She
added that findings such as those in the OIG report are what’s
fueling CMS’ push toward new and revised supplier standards.
“This reinforces what they are trying to establish in the new
supplier standards. This is why: One in eight [of the investigated
companies] weren’t even present for their review,” she said.
“Little teeny providers now have to do more because of these
incidences. When someone screws up, now everyone’s going to pay for
the rest of the life of their business.”
OUR DIGITAL PARTNERS