WASHINGTON — A 111-page final rule expanding the power of the Department of Health and Human Services to fight fraud could bring significant changes to HME providers.
And those changes, said Neil Caesar of the Health Law Center in Greenville, S.C., could depend on where your business is in the country, as well as your history.
On Feb. 2, CMS and the Office of Inspector General published the final rule encompassing additional screening requirements, application fees, temporary enrollment moratoria, payment suspensions and compliance plans. Effective March 25, 2011, the new rule implements provisions of the Affordable Care Act and applies to a variety of entities in addition to HME, including veteran's hospitals, occupational and physical therapists, physicians, health care agencies and hospitals.
"Thanks to the new law, CMS now has additional resources to help detect fraud and stop criminals from getting into the system in the first place," acting CMS Administrator Donald Berwick, M.D., said in an HHS release. "The Affordable Care Act's new authorities allow us to develop sophisticated, new systems of monitoring and oversight to not only help us crack down on fraudulent activity scamming these programs, but also help us to prevent the loss of taxpayer dollars across the board for millions of American health care consumers."
The ACA also provides an additional $350 million to ramp up the anti-fraud efforts.
Caesar said it might take a while before the full impact of the new rule is realized. "It's hard to anticipate at this point how invasive this power will be," he said, adding that in "finding the right parameters for this new initiative, there are going to be some excesses and some hyper-strictness that will create some burdens."
The new rule empowers CMS, among other things, to:
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Create a rigorous screening process for providers and suppliers enrolling in Medicare, Medicaid and the Children's Health Insurance Program to keep fraudulent providers out. "Types of providers and suppliers that have been identified in the past as posing a higher risk of fraud, for example, durable medical equipment suppliers, will be subject to a more thorough screening process," according to an HHS fact sheet.
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Establish a new enrollment process for Medicaid and CHIP providers. States will have to screen providers who order and refer to Medicaid beneficiaries to determine if they have a history of defrauding government. Those that have been kicked out of Medicare or another state's Medicaid or CHIP will be barred from all Medicaid and CHIP programs.
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Temporarily stop enrollment of new providers and suppliers. "Medicare and state agencies will be on the lookout for trends that may indicate health care fraud — including using advanced predictive modeling software, such as that used to detect credit card fraud," HHS said. "If a trend is identified in a category of providers or geographic area, the program can temporarily stop enrollment as long as that will not impact access to care for patients."
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Temporarily stop payments to providers and suppliers in cases of suspected fraud. Under the new rules, if there has been a credible fraud allegation, payments can be suspended while an action or investigation is under way.
Know Your History
Stakeholders cautiously embraced parts of CMS' rule when it was proposed in September, believing that some elements would go far in keeping fraudulent companies from entering the system. However, while industry leaders were still digesting the lengthy rule on Friday — the American Association for Homecare's Regulatory Council is analyzing the new rule, said Stacey Harms, manager of government affairs — they said providers do need to be wary of some of its final provisions.
"It is tied to all providers, not just [durable medical equipment providers]," said Caesar. "DME is going to likely lead the way for the pilot project — which quite possibly means that [implementation] will be geographically focused."
In other words, he said, providers in Florida, New York, Illinois, Texas and California — what Caesar calls "the big five" areas previously targeted by the government as hotbeds for fraud — could be the first to be affected by the rules. "During the pilot program and probably after, suppliers located in an area with a history of fraud will be scrutinized more frequently," he predicted.
Others who could face rigorous scrutiny, according to Caesar:
- Providers with a bankruptcy in their history;
- Providers who have been subject to government investigation;
- Providers who have had a significant number of problems with the National Supplier Clearinghouse;
- Providers with overpayments.
"It is likely that history will matter," Caesar said. "I also think that product lines are going to matter. Diabetic providers will be under more scrutiny than an orthotist or prosthetist, power mobility providers under more scrutiny than [those who carry] commodes and crutches and so forth."
He added that savvy HME owners planning to grow might need to consider whether it is worth it to expand into a category that places them in the line of fire. "Are you going to expand to a market of increased scrutiny?" Caesar asked.
Expanding to anything could be a problem.
Under the final rule, current providers opening new locations could be prevented from doing so under the "stop enrollment" provision, which allows CMS to halt enrollment to new providers if fraud is indicated within either a category of providers or a geographic area — and "new providers" includes established providers opening new locations.
Also under the final rule, providers would be assigned to one of three "fraud risk" categories: limited risk, moderate risk and high risk. The range of screening tools such as license verifications, database checks, fingerprinting, criminal background checks and unscheduled or unannounced site visits escalates according to the category.
CMS places enrolled DME providers in the moderate-risk category, while new enrollees are designated as high-risk. In addition to all current screening procedures, the latter would demand fingerprinting and background checks on owners, authorized officials or managing employees. Currently enrolled providers opening new locations are also included in that "high" tier.
AAHomecare took issue with that provision when the rule was proposed. "One important concern we have is that CMS proposes to lump together new locations of currently enrolled, compliant providers and newly enrolling providers with no enrollment history as a Medicare provider and that may truly pose high risks for the program," the association said in comments to CMS. "We believe that new locations of currently enrolled Medicare DMEPOS providers should be distinguished from other providers that do not have an established record with the Medicare program."
However, CMS said in its final rule, "We disagree. As previously stated, the addition of a new location is considered an initial enrollment. Consequently, a new DMEPOS location will be subject to the 'high' level of categorical screening."
Another issue that could be troublesome, according to Caesar, is CMS' new power to stop payments if there is a "credible fraud allegation." But exactly what is that?
Under the final rule, a "credible" allegation of fraud could come from any source, including fraud hotline complaints, claims data mining or patterns identified through audits or other investigations. "A patient complaint on questionable billing could certainly be 'credible' to them," Caesar said. "[Currently, CMS] goes quickly to prepayment review. So the standard to date for credible fraud is a pretty low standard … It's a very low threshold for investigators to cross."
Caesar's advice to providers is to try to be as perfect as possible by submitting clean claims, incorporating the costs of government scrutiny into their business plans — that is, budgeting for such things as audits — and improving their documentation.
"Clearly, part of this mandate is that they are pushing for people to demonstrate appropriateness quickly and thoroughly," Caesar said. "Documentation needs to be in place. It is good that they are also talking about this in the context of physicians needing to have documentation on hand."
That could help providers, he said, by making it easier to get the documentation they need.
View the final rule in the Feb. 2 Federal Register.
Read an HHS fact sheet on the new rules.
