WASHINGTON — A letter last month from acting CMS Administrator Charlene Frizzera to House Republicans outlined Medicare's anti-fraud measures. The effort is welcome, according to HME advocates, but it's years late.
In the 13-page letter, Frizzera pointed out that the top three sectors for Medicare fraud are DMEPOS, home health agencies and infusion therapy. She noted that CMS had conducted separate two-year demonstrations in each of the areas "focusing on enrollment-related activities and providers in high-risk areas of the country.
"The demonstrations have enhanced our understanding of these types of providers and have allowed us to test and compare different fraud prevention tools that will assist the agency in eliminating providers that do not meet the requirements of the Medicare program and who potentially pose health and safety risks to Medicare beneficiaries," Frizzera wrote.
She also referenced the Health Care Fraud Prevention and Enforcement Action Team, or "Project HEAT," a partnership formed in May between the Department of Health and Human Services and the Department of Justice to ID fraud and prosecute criminals through interagency strike forces. "These strike forces are being established in areas of the country where organized criminals have caused spikes in the submission of fraudulent Medicare claims," Frizzera said. "Even in the preliminary sage of Project HEAT, our work has already resulted in charges against 103 defendants involving more than $100 million in fraud."
CMS information attached to the letter detailed DMEPOS fraud as "unscrupulous suppliers who bill for services not rendered for medical equipment, such as power wheelchairs, scooters, nutritional products, orthotics, prosthesis and hospital beds; and billing for services not 'medically necessary.'" Those were described as situations where:
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DMEPOS items/supplies are actually delivered but not ordered by a physician;
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Upcoding or swapping, where the supplier bills a high-end or custom-fitted item but delivers a low-end, off-the-shelf item, or the supplier provides a scooter but bills for a more expensive power wheelchair;
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Misrepresentation of the patient's condition where the supplier submits a claim with diagnoses that qualify for payment but are not documented in the patient's medical record; and
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Overutilization, where the supplier bills for more supplies than the doctor ordered or the patient can use, or the supplier drop ships without checking if the patient still needs or uses the supplies.
Citing the two-year DMEPOS demonstration completed in September in South Florida and Southern California, the acting CMS chief said fraud prevention efforts concentrated on strengthening front-end, pre-enrollment security as well as investigating existing enrollees.
As of Jan. 23, 2009, 1,139 suppliers had seen their billing privileges revoked. The FY 2008 improper payment amount for DMEPOS was approximately $700 million.
For FY 2008, the improper payment amount for HHAs was approximately $195 million. CMS is still tallying the amount for infusion services, but during the nine-month period from November 2007 to July 2008, $228 million of infusion services were denied, according to the letter.
The demonstrations used several techniques to minimize fraud, including increased on-site reviews and prepayment claims editing, which compares new claims to previous claims allowing investigators to spot fraud trends in real time.
Barton requested the information from Frizzera shortly after President Obama mentioned "waste" four times in his early September health care reform address to a joint session of Congress. "We've estimated that most of this plan can be paid for by finding savings within the existing health care system, a system that is currently full of waste and abuse," Obama said during the nationally televised speech on Sept. 9. "Reducing the waste and inefficiency in Medicare and Medicaid will pay for most of this plan."
Frizzera's letter, dated Oct. 7, also included statistics on Medicare and Medicaid errors, revealing that there were $10.4 billion in improper Medicare payments in 2008. Medicaid payment errors came to $32.7 billion in 2007, with the federal government's share at $18.6 billion.
CMS has 110 full-time employees devoted to Medicare program integrity, and 100 full-time employees working on Medicaid program integrity. In addition, 23 attorneys within HHS work on Medicare and Medicaid fraud, the letter said.
"Given the amount of investment and staff committed to these efforts, it is amazing that the amount of fraud is still so high," commented rehab provider Gary Gilberti, president of Chesapeake Rehab Equipment, Baltimore, who also serves as president of NCART. "It appears that those who are supposed to identify and stop the fraud still don't know where to look or how to tell who a fraudulent supplier is."
He and others in the industry would welcome what he termed "effective efforts" to curb fraud, Gilberti said. "We hope that future efforts can be carried out in a way that truly roots out fraudulent providers' behavior without causing damage to those who are innocent and who provide quality patient care and positive outcomes every day."
"I have said the pay-and-chase mentality has to stop," added Tom Ryan, president and CEO of Homecare Concepts, Farmingdale, N.Y. "The demonstrations in high-risk areas that include the focus on enrollment of providers should have been in place years ago across the system. Site visits, prepay audits on new providers and data-mining for aberrations in billing should be part of any oversight of the program.
"The fact that organized crime has moved into the DME sector is outrageous," said Ryan, who is treasurer of AAHomecare. "As a taxpayer, I am appalled, and as a legitimate provider painted with a broad brush about the fraud in our sector, I am appalled. Step up the oversight and get rid of the crooks."
Read Frizzera's letter on the House Energy and Commerce Web site.
