In brief: Gov’t announces historic takedown, GAO finds fragmented oversight of Medicaid

Friday, June 19, 2015

WASHINGTON – A nationwide sweep led by the Medicare Fraud Strike Force has resulted in charges against 243 individuals, including 46 doctors, nurses and other licensed medical professionals.

The individuals have been charged for their alleged participation in Medicare fraud schemes involving about $712 million in false billings, the Department of Health and Human Services announced last week.

“This action represents the largest criminal health care fraud takedown in the history of the Department of Justice, and it adds to an already remarkable record of enforcement,” said Attorney General Loretta Lynch. “The defendants charged include doctors, patient recruiters, home health care providers, pharmacy owners, and others. They billed for equipment that wasn’t provided, for care that wasn’t needed, and for services that weren’t rendered.”  

The defendants are charged with various healthcare fraud-related crimes, including conspiracy to commit healthcare fraud, violations of anti-kickback statutes, money laundering and aggravated identify theft. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services, including home health care, psychotherapy, physical and occupational therapy, DME and pharmacy fraud.

In one case in Los Angeles, for example, a doctor is charged with causing almost $23 million in losses to Medicare through his own fraudulent billing and referrals for DME, including more than 1,000 expensive power wheelchairs and home health services that were not medically necessary and often not provided.

Including this week’s enforcement actions, nearly 900 individuals have been charged in national takedown operations, involving more than $2.5 billion in fraudulent billings. 

The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since their inception in March 2007, Strike Force operations in nine locations have charged more than 2,300 defendants who collectively have falsely billed the Medicare program for over $7 billion.

GAO finds fragmented oversight of Medicaid

WASHINGTON – CMS needs to do a better job overseeing Medicaid managed care, the Government Accountability Office says in a report public released June 18.

The GAO found that the program integrity units of five states and the Medicaid Fraud Control Units of seven states that were included in its review focus their efforts on Medicaid fee-for-service payments, not Medicaid managed care payments. This, the GAO points out, despite the fact that Medicaid managed care is growing at a faster rate than fee-for-service.

Moreover, while CMS has delegated oversight of Medicaid managed care to states, it does not require them to audit these payments. 

“Unless CMS takes a larger role in holding states accountable, and provides guidance and support to states to ensure adequate program integrity efforts in Medicaid managed care, the gap between state and federal efforts to monitor managed care program integrity will leave a growing portion of federal Medicaid dollars vulnerable to improper payments,” the GAO stated in its report.

Of the $431.1 billion that the government spent on Medicaid in fiscal year 2013, $14.4 billion or 5.8% were improper payments, according to the GAO.

The GAO recommends that CMS increase its oversight by:

1. requiring states to audit payment to and by managed care organizations; 

2. updating its guidance on Medicaid managed care program integrity; and 

3. providing states additional support for managed care oversight, such as audit assistance from existing contractors.

CMS asked for clarification on the first recommendation, and concurred with the second and third recommendations.

On the first recommendation, the GAO said it would like to see CMS take the added step of requiring states to audit the appropriateness of payments to and by managed care organizations to better ensure Medicaid program integrity.

Hospitals take up CMS on offer. Will HME providers get their chance?

WASHINGTON – Recent settlements of pending appealed claims between CMS and hospitals have given stakeholders hope that a settlement with HME providers is also possible.

As of June 1, CMS has paid $1.3 billion from the Medicare Trust Fund to settle 300,000 pending appealed claims from more than 1,900 hospitals, according to an update.

Back in August, CMS offered “an administrative agreement to any acute-care hospital or critical access hospital willing to resolve their pending appeals (or waive their right to request an appeal) in exchange for timely partial payment (68% of the net payable amount).”

CMS made the offer to help break a logjam at the Office of Medicare Hearings and Appeals.

Stakeholders have been in talks with OMHA on settlement options more geared toward HME providers.

“The current settlement options offered by OMHA are not appealing to the DMEPOS industry based on strict criteria that OMHA has established to be eligible,” AAHomecare stated in a bulletin this week.

Stakeholders hope options for HME providers will be a talking point during an OMHA conference call on June 25 to discuss updates on its initiatives. 

Heritage Valley offers infusion patients more choices

BEAVER, Pa. – Heritage Valley Health Systems has teamed up with Chartwell Pennsylvania to offer home infusion therapy, according to a story in the Beaver County Times. The partnership will give patients more choices when it comes to care, Bryan Randall, CFO of Heritage Valley, an integrated healthcare delivery network, told the newspaper. “We don’t have to create anything from scratch,” he said. “In some cases, it’s better to partner with an organization that’s already been successful in that field.” Based in Crafton, Pa., Chartwell offers infusion therapy and specialty pharmacy services in Pennsylvania, West Virginia and Ohio.

Sleep portal seeks users

WASHINGTON – Web-based community portal is recruiting patients, caregivers and those at risk for sleep apnea to share information, support and research about the disease. Initially, researchers will focus on questions and results that are most important, practical, and empowering to those impacted by sleep apnea. “By having large amounts of data provided by and for us, we can now drive the research agenda,” said Kathy Page, who has sleep apnea and is a member of’s Patient Engagement Panel. “This is a way to democratize research—to generate understanding on the part of the researchers and patients together.” is the public face of the Sleep Apnea Patient Centered Outcomes Network.

Noridian publishes review results for enteral nutrition, oxygen, test strips

FARGO, N.D. – Noridian Healthcare Solutions, the Jurisdiction D DME MAC has published the results of prepayment reviews for a number of products from January through April 2015. Parenteral nutrition (B4185 and B4197) had error rates of 92% and 98%, respectively. Oxygen (E0434 and E0439) had error rates of 51% and 63%, respectively. Blood glucose test strips (A4253) had an error rate of 87%.

NHIA to Boehner: Don’t use ASP for home infusion drugs

WASHINGTON – The National Home Infusion Association has asked House Speaker John Boehner to drop a provision in H.R. 2570 that would change the payment structure for infusion drugs under the Part B DME benefit to an average sales price methodology. The provision is a “pay-for” in “The VBID for Better Care Act of 2015.” “The payment change for these drugs as set out in H.R. 2570 will make it very difficult, if not impossible, for home infusion providers to provide these drugs and the necessary services to Medicare beneficiaries,” the NHIA stated in a June 15 letter. “Beneficiaries without access to home infusion would most likely need to receive their care in more expensive institutional settings.” Instead, the NHIA asks that Congress pass its “Medicare Home Infusion Site of Care Act,” a bill that would require Medicare to pay for home infusion services and related supplies under Medicare Part B. H.R. 2570 also includes a provision prohibiting Part B DMEPOS drugs from being included in the competitive bidding program. “NHIA does support the prohibition,” the association stated in the letter. “However, it must be noted that while this provision may prevent the drug reimbursement under DMEPOS from being driven even lower, the issue of a service payment for home infusion professional services remains paramount to the industry and the industry cannot support an ASP pricing methodology without home infusion services being reflected.”

Universal Software Solutions completes expansion

DAVISON, Mich. – Universal Software Solutions has completed the renovation and expansion of its corporate headquarters to accommodate growth, the company announced June 15. The software company has reconstructed the upper floor of its building into useable office space and a reorganized customer service department. “(This) will provide the necessary space for additional staff members,” the company stated in a press release. Universal Software says it is looking to hire developers, software trainers and sales account executives “at an aggressive rate.” The company provides a fully integrated practice management solution called Healthcare Data Management System for the DME, home infusion, pharmacy and mail-order supplies markets. It offers both premise-based and hosted solutions.

VMI launches commercial division

PHOENIX – VMI has launched a new division to provide wheelchair accessible vehicles to commercial customers in North America. “Over the past 18 months, VMI has invested in product quality and manufacturing,” said Doug Eaton, president and CEO, in a release. “We are now well positioned to expand our retail strengths to the commercial market.” Hugh Palmer, director of product management, will head the new division. The launch of VMI’s first commercial wheelchair accessible vehicle is scheduled for July, and full-scale production and delivery is scheduled for August.

Short takes: Stratice Healthcare, Breathe Technologies and more

Stratice Healthcare has appointed Carmen Davies executive vice president and chief compliance officer. In this role, Davies will lead all aspects of the electronic order generation from the EHR/physician. Davies will also work with a number of industry stakeholders toward order standardization measures for CMS and other payers. Previously, Davies served as regional vice president of respiratory operations at Walgreens Infusion and Respiratory Services…Breathe Technologies has received 510(k) clearance from the Food and Drug Administration for its Life2000 ventilation system. The system is for adult patients who require positive pressure ventilation delivered invasively or non-invasively. It’s suitable for use in the home and institutional settings…101 Mobility of Boston now offers Philips Lifeline, which enables seniors and others to call for help in the event of a fall or other emergency. Offering the product makes 101 Mobility a one-stop shop for customers, the company says…Community Medical Products now offers the Melio Self-Emptying Leg Bag System. The Prairie du Sac, Wis.-based provider has a self-pay option for the product…American Medical Sales and Chart Industries have partnered to donate a new SeQual eQuinox portable oxygen concentrator to 6-year-old Cooper Anglemyer after Medicaid refused to pay for it. Anglemyer suffers from chronic lung disease and requires constant oxygen and a full-time nurse to monitor his oxygen levels…Invacare will be a national host sponsor and the official wheelchair of the 35th National Veterans Wheelchair Games. Presented by Paralyzed Veterans of America and the Department of Veterans Affairs, more than 600 veterans are expected to compete in the games, scheduled for June 21-26 in Dallas.