WASHINGTON — At a congressional hearing on health care reform vis-a-vis fraud and abuse, HHS Inspector General Daniel Levinson blasted the HME industry and leveled another shot at already-struggling oxygen providers, recommending a 13-month cap.
"OIG has an extensive body of work identifying Medicare fraud, waste and abuse related to DME. Problems include DME suppliers circumventing enrollment and billing controls, high payment error rates, kickbacks and excessive reimbursement rates for certain DME," Levinson testified Thursday before the House Energy and Commerce Subcommittee on Health.
In a statement submitted to the committee, which held a series of hearings on the House "discussion draft" health reform bill last week, Levinson laid out a litany of his office's previous investigations into power wheelchairs, home oxygen equipment and negative pressure wound therapy devices, among others.
In 2004, Levinson said, OIG estimated that Medicare paid $96 million for PWC claims that did not meet coverage criteria for any type of wheelchair or scooter and "overspent an additional $82 million for claims that could have been billed using a code for a less expensive mobility device."
In 2006, an OIG report found that Medicare had allowed an average $7,215 for rental of an oxygen concentrator "that costs approximately $600 to purchase new … We determined that if home oxygen payments were limited to 13 months rather than the current 36 months, Medicare and its beneficiaries would save $3.2 billion over five years," Leivnson told the committee.
And in March of this year, OIG reported that Medicare reimbursed suppliers for negative pressure wound therapy pumps based on a purchase price of more than $17,000 when "suppliers paid, on average, approximately $3,600 for new models."
"Though the vast majority of health care providers and suppliers are honest and well intended, even a small percentage of providers and suppliers intent on defrauding the programs can have significant detrimental effects," Levinson said, noting previous OIG recommendations to CMS to strengthen enrollment safeguards and "align Medicare reimbursement for DME more closely with widely available market prices."
The scorching testimony couldn't have come at a worse time, according to the American Association for Homecare's Michael Reinemer, vice president, communications and policy. The association is looking for congressional support of an oxygen benefit overhaul, with a bill to come from Reps. Mike Ross, D-Ark., and Kendrick Meek, D-Fla.
But Wall Street analysts reported last week that the Senate Finance Committee, which has yet to unveil its health care reform bill, is considering deep cuts to oxygen as one way to offset health reform costs.
"Two problems with the testimony are first, the data and the conclusions about oxygen are wrong, and second, the timing is terrible," Reinemer said.
"With respect to oxygen, this testimony focuses on the thoroughly discredited 2006 OIG study," he said. That study did not reflect the services involved in providing home oxygen, the association has argued. (See AAHomecare Calls OIG Report Deeply Flawed, HomeCare, October 2006.)
"Further cuts to oxygen are already a looming threat in some quarters on Capitol Hill," Reinemer continued. "This picture of home oxygen therapy — described as merely a piece of equipment — distorts the true character and essential services connected to this Medicare benefit, and it perpetuates the worst myths."
What's more, Reinemer said, "because of its disproportionate focus on pricing and fraud issues connected to the HME sector, this OIG testimony harms the entire HME community including all the good, law-abiding providers of power wheelchairs and medical supplies."