OIG Recommends Strengthening Supplier Enrollment Process

WASHINGTON–The HHS Office of Inspector General issued a report
Friday on south Florida HME providers based on results of
unannounced visits to home care companies in Miami-Dade, Broward,
and Palm Beach counties. The counties were targeted for review
based on previous allegations of supplier noncompliance with
Medicare standards.

Working in collaboration with CMS and the National Supplier
Clearinghouse, the OIG inspected 1,581 businesses to assess their
compliance with five specific requirements, which state that
suppliers must: 1) maintain a physical facility; 2) be open and
staffed during business hours; 3) have a visible sign; 4) post
hours of operation; and 5) maintain listed telephone numbers.

During the site visits, OIG found that 45 percent of DMEPOS
suppliers in the three south Florida counties did not comply with
at least one of the five standards reviewed. Thirty-one percent of
suppliers did not comply with the first two requirements of
maintaining a facility at the business addresses that they provided
to Medicare and being open for business during posted hours.
Another 14 percent were open but failed to meet at least one of the
three remaining requirements that OIG reviewed.

“It is clear that Medicare continues to be highly vulnerable to
DMEPOS fraud and abuse,” said Inspector General Daniel Levinson.
“It is vital that we protect Medicare beneficiaries from
unscrupulous suppliers who are gaming the system at the expense of
our nation’s seniors and taxpayers. Our colleagues at CMS share our
goal of ensuring program integrity, and I am pleased that they have
agreed with many of our recommendations.”

Based on the report findings, the OIG recommended that CMS
strengthen the supplier enrollment process to ensure that suppliers
meet the Medicare standards through several actions, including:

–conducting more unannounced site visits and out-of-cycle
inspections;
–performing more rigorous background checks of applicants;
–increasing the prepayment review of DMEPOS claims; and
–deactivating the Medicare billing numbers of suppliers that have
been inactive for a 90-day period.

In a separate report released at the same time, the OIG
documented the results of out-of-cycle visits to 169 DMEPOS
suppliers not located in Florida. “Through our out-of-cycle site
visits, we found that 10 of the 169 DMEPOS suppliers did not
physically exist,” according to the report, which noted that an
additional six existed at their stated business addresses but were
closed during posted hours of operation.

“The 10 absent DMEPOS suppliers billed Medicare almost $393,000
in the two months after we had determined that they were absent,”
the report said. “Of the nearly $393,000 in submitted claims, the
suppliers received almost $197,000 in reimbursements as of Dec. 31,
2005.”

The six suppliers that were closed during business hours
collectively billed Medicare almost $102,000 in the two months
after OIG discovered that they were closed, and received almost
$52,000 in reimbursements as of Dec. 31, 2005.

According to the OIG, its findings suggest that out-of-cycle
visits targeting DMEPOS suppliers “may be warranted in other areas
of the country.”

To view the report on south Florida suppliers, click here.

To view the report on suppliers in other areas, click here.