WASHINGTON - A bill that would give CMS more time to pay claims when fraud is suspected could punish legitimate providers, stakeholders say.

Introduced Nov. 16 by Sen. Charles Grassley, R-Iowa, S. 2774 would give the Department of Health and Human Services secretary the discretion to extend its payment window up to 365 calendar days for claims submitted by certain categories of services or suppliers or by suppliers in certain geographic areas.

"The bill is so broad that it could unfairly impact providers who have done nothing wrong," said industry attorney Asela Cuervo. "CMS could apply a payment delay to entire product lines or an entire state."

The bill's lack of specific details--what constitutes a "category" for example--could leave thousands of providers at risk for delayed payments.

"If I happen to be in Miami doing power chairs does that mean they won't pay me for a year?" said Wayne Stanfield, president of the National Association of Independent Medical Equipment Suppliers (NAIMES). "That could have a devastating effect on the industry."

However well intentioned, the bill doesn't get at the heart of Medicare's fraud problem: It's too easy for crooks to game the system, say industry watchers.

"They need to focus on CMS and why they or their contractors are continuing to provide Medicare numbers to companies that are not meeting current requirements (for obtaining billing numbers)," said Seth Johnson, vice president of government affairs for Pride Mobility. "That is blatant fraud. There are significant signs of waste that could be taken out of the program if they utilized and enforced the requirements that are currently mandated."

News reports surfaced last week that CMS ignored warnings from its own inspectors about potential fraud cases. In response, Secretary Kathleen Sebelius has said her office is implementing a new system for tracking "red flags."

"How is she going to do anything when, a year into the president's term, they don't even have a director of CMS," said John Gallagher, vice president of government relations for VGM.

Another bill aimed at Medicare fraud was introduced on Oct. 30. Sponsored by Sen. George LeMieux, R-Fla., it seeks to establish an office dedicated to Medicare fraud prevention. The bill, S. 2128, would also require background checks for new Medicare suppliers, as well as site visits during the enrollment process and unannounced site visits during the re-enrollment process.

As the health care reform debate rages on, stakeholders expect Medicare fraud to continue to be a hot topic.

"When major initiatives are put forth, they want to make sure the programs are operating in the most efficient manner," said Walt Gorski, vice president of government affairs for AAHomecare. "If you are looking to find every (health care) nickel and somebody is saying here is $60 billion in (fraud, waste and abuse) it behooves everyone to focus attention on that."