Cheap products fuel fraud

Thursday, April 30, 2009

Dr. Doran Edwards is on a “crusade” to encourage CMS to crack down on manufacturers who help fuel DME fraud and abuse. The former SADMERC medical director turned Medicare consultant contends that “some DMEPOS manufacturers have contributed to the problem by outsourcing production, reducing standards and lowering quality in order to maximize profits.” These low cost, low quality products appeal to crooks, looking to make a quick buck off Medicare and then disappear. The result: Beneficiaries get stuck with junky equipment, which often breaks and/or leads to injury; and Medicare ends up spending more money on repairs and medical care, Edwards said.

HME News: First, let’s be clear, there are plenty of companies that outsource manufacturing to take advantage of lower labor costs  - not to cut corners and be a low-cost provider.

Dr. Doran Edwards: That is true, and usually it’s the manufacturers of the better quality products.

HME: Nevertheless, you really think a lot of manufacturers go overseas to produce cheap, inferior equipment?

Edwards: (Laughter.) I think there is a huge amount of fraud and abuse in the system because we have created a situation that is not police-able. It is not enforceable.

HME: What do you mean by that?

Edwards: HCPCS codes describe a complete unit ready for service to the beneficiary. But it is also a bucket for similar products that do approximately the same job. So you have widely divergent products with widely different prices, widely different functions in some cases, in the same code. It makes policy writing, and coverage and payment crazy, and it creates a loophole for fraud and abuse. You need to get at the root of the problem by defining the codes, so they are not vague; so there are clear definitions and (product) standards that are enforceable. And at the moment, for the most part, that does not exist.

HME: I don’t see how CMS can continue to cut reimbursement and expect manufacturers to innovate and produce high quality products.

Edwards: Correct. At some point, there is going to have to be a cooperative effort between industry and the government to come to some kind of agreement on this, and I would hope they don’t forget the beneficiary in the process. My whole purpose for doing this is to make sure beneficiaries get quality products that someone can make enough money on the products to stay in business.

HME: Are you working with CMS on this issue?

Edwards: Right now I’m just a voice in the wilderness asking them to keep moving forward.