ATLANTA — The media heat is back on. This time it is the venerable news magazine "60 Minutes," which ran a segment on Oct. 25 focusing on DME fraud in South Florida and Los Angeles. But this time there's also a twist, industry proponents say: The finger of blame points at Medicare for not stopping it.
Complete with a recently convicted criminal named "Tony" in disguise, the 15-minute vignette ended with this memorable exchange in reference to equipment suppliers in South Florida:
Commentator Steve Kroft: "If I went to the phone book and looked under medical equipment suppliers, 95 percent of the companies would be phony?"
Convicted criminal: "Yes, sir."
Reaction to the story ranged from outrage to relief that the focus was largely on obvious criminals who never had an interest in serving patients.
"This story, while not reflecting very well on suppliers, did not show a legitimate supplier who was committing fraud, only crooks who entered the business solely to make easy money," said Wayne Stanfield, president and CEO of the National Association of Independent Medical Equipment Suppliers. "Only CMS can end the fraud by holding contractors accountable for their actions and making significant changes to the inspection and oversight process for suppliers."
"I've already had a couple conversations with the people at '60 Minutes' to straighten out some of the misleading statements made in that piece, which chiefly focused on the failure of Medicare to keep criminals out of the business," said Michael Reinemer, vice president, communications and policy, for the American Association for Homecare.
"AAHomecare has been all over the fraud issue for many years. We've worked hard to get out in front in the media and on Capitol Hill with our own 13-point anti-fraud plan.
"To frame this story," Reinemer continued, "it's worth noting that [AAHomecare President] Tyler Wilson has been on the Fox Business channel discussing our efforts to stop fraud. One of our board members, Joel Marx, spent 30 minutes on C-SPAN talking about the value of home care last month. AAHomecare was quoted on the front page of USA Today saying that the federal government has done a terrible job of keeping criminals out of Medicare."
On the positive side, provider Tim Pederson pointed out that the story exposed problems with CMS and supplier numbers.
"I think the AAHomecare 13-point plan would address many of these issues," said Pederson, CEO of WestMed Rehab, Rapid City, S.D. "When I compare my last [National Supplier Clearinghouse] site visit to the complete lack of oversight documented on the news story, I can only shrug. When the NSC came to my business, they did so unannounced, and they conducted a thorough evaluation complete with pictures and a review of medical records and inventory.
"Instead of focusing on catching the real criminals, CMS continues to spend resources to make it more difficult for legitimate providers to conduct business," added Pederson. "The real criminals don't care how difficult it is for legitimate suppliers because, rather than provide services to beneficiaries, they merely send a bill to Medicare for items not provided. In this day and age, the existence of these crime rings is unacceptable."
With CMS and law enforcement officials expressing exasperation on camera, it only begged the question: Why not do what industry advocates have been suggesting for years?
"We as an industry have been trying to raise the barriers to entry for years, and we have laid out points to CMS regarding the so called pay-and-chase policy," said Tom Ryan, president and CEO of Homecare Concepts, Farmingdale, NY. "We have said to do site visits on any new provider before a number is given, but make sure the NSC contracted agent knows what to look for. We have suggested prepay audits on new providers, and certainly the ability to data mine real-time to see these aberrations of going from $30,000 one month to $800,000 the next month — these would set off some red flags to freeze payment and audit the claims."
Indeed, AAHomecare has put its 13-point plan to curb fraud in front of Congress several times, once in 2008, again in February this year, and again yesterday with a statement applauding Health and Human Services Deputy Secretary William Corr's statement to the Senate Judiciary Committee that the federal government is committed to "stop fraud before it happens."
"The association has zero tolerance for fraud and remains committed to eliminating fraud and abuse in the Medicare program. We are eager to work with Congress, the White House, the Centers for Medicare and Medicaid Services (CMS), and federal law enforcement agencies in efforts to ensure the integrity of the Medicare program. To that end, we continue to offer suggestions for additional fraud and abuse prevention strategies over and above existing laws," AAHomecare said.
"Our legislative action plan is designed to protect these patients and their families — as well as the American taxpayers — by stopping fraud and abuse in the Medicare system at the front end of the payment system rather than after the fact. The plan targets fraud and abuse at the source through proposed policies that will ensure that providers who participate in Medicare are legitimate businesses and that disreputable actors are locked out of the system. Among the provisions detailed in the legislative proposal are more rigorous quality standards, increased penalties for fraud, mandated site inspections for new providers, and real-time claims analysis."
The 13 specific recommendations in the plan include:
1) Mandate Site Inspections for All New Home Medical Equipment Providers. A July 2008 GAO report underscored the need for CMS to ensure that its contractors are conducting effective site inspections for all new applicants for a Medicare provider number.
2) Require Site Inspections for All HME Provider Renewals. All renewal applications should require an in-person visit by the National Supplier Clearinghouse (NSC), the contractor that CMS uses to ensure integrity in the Medicare program.
3) Improve Validation of New Homecare Providers. Additional validation of new providers should be included in a comprehensive and effective application process for obtaining a Medicare provider number.
4) Require Two Additional Random, Unannounced Site Visits for All New Providers. Two unannounced site visits should be conducted by NSC during the first year of operation for new HME providers.
5) Require a Six-Month Trial Period for New Providers. The NSC should issue a provisional, non-permanent supplier number to new suppliers for a six-month trial period. After six months of demonstrated compliance, the provider would receive a "regular" supplier number.
6) Establish an Anti-Fraud Office at Medicare. CMS should establish an office with the sole mandate of coordinating detection and deterrence of fraud and improper payments across the Medicare and Medicaid programs.
7) Ensure Proper Federal Funding for Fraud Prevention. Increase federal funding to ensure that NSC completes site inspection and other anti-fraud measures.
8) Require Post-Payment Audit Reviews for All New Providers. Medicare's program safeguard contractors should conduct post-payment sample reviews for six months' worth of claims submitted to Medicare by new providers.
9) Conduct Real-Time Claims Analysis and a Refocus on Audit Resources. Medicare must analyze billings of new and existing providers in real time to identify aberrant billing patterns more quickly.
10) Ensure All Providers Are Qualified to Offer the Services They Bill. A cross-check system within Medicare databases should ensure that homecare providers are qualified and accredited for the specific equipment and services for which they are billing.
11) Establish Due Process Procedures for Providers. CMS should develop written due process procedures for the Medicare provider number process, including issuance, denial and revocation of the Medicare supplier number. The procedures must include, for example, an administrative appeals process and timelines.
12) Increase Penalties and Fines for Fraud. Congress should establish more severe penalties for instances of buying or stealing beneficiaries' Medicare numbers or physicians' provider numbers that may be used to defraud the government.
13) Establish More Rigorous Quality Standards. Ensure that all accrediting bodies are applying the same set of rigorous standards and degree of inspection to their clients.
According to Reinemer, "The key thing is for every HME provider and every state association to get involved and work with their local media. There is no silver bullet that is going to make this story go away since we can't fix the fraud problem — Medicare has to do that. It's going to require real work for a sustained period by everyone in the HME sector."
Reinemer noted the association's ongoing Stand Up for Homecare PR offensive. "We are trying to make it easy for everyone to pitch in to get accurate media coverage for home care," he said.
Read AAHomecare's response to "60 Minutes."
Check out the "60 Minutes" story.
For more information on the Stand Up for Homecare campaign, see www.aahomecare.org/standupforhomecare.
To report Medicare fraud, the Office of the Inspector General
maintains a confidential hotline:
Phone: 800/HHS-TIPS (800/447-8477)
Fax: 800/223-8164
Email: HHSTips@oig.hhs.gov
Mail: Office of the Inspector General, HHS TIPS Hotline, P.O. Box
23489, Washington, DC 20026
