CMS OKs sham HMEs, charges GAO report

Sunday, August 31, 2008

WASHINGTON--The Government Accountability Office (GAO) released a report in August that gives credence to the industry’s long-standing argument that CMS is partly to blame for the fraud and abuse that plagues the HME industry.

Earlier this year, the GAO set up two sham HME companies as part of a continuing investigation into CMS’s enrollment and inspection process. The GAO was able to get the companies approved for Medicare billing privileges, even though they didn’t have clients or inventory.

“This report captures everything that the HME industry has been talking about for nearly a decade,” said Walt Gorski, vice president of government affairs for AAHomecare. “There are lax controls that allow the criminal element to enter the HME industry, tarnishing the reputation of all providers.”

In 2005, the GAO found that CMS’s efforts to verify compliance with enrollment standards were insufficient due to weaknesses in its ability to check state licenses and conduct on-site inspections. CMS promised to beef up its verification process-not enough, the GAO says.

The HME industry’s response: We told you so.

“This is good for the industry to have,” said Seth Johnson, vice president of government affairs for Pride Mobility. “When we continue to get hit by CMS and Congress on fraud, we now have this report that, at a minimum, shows CMS shares a significant portion of the blame.”

Industry stakeholders plan to use the report as a launching pad to have conversations with CMS and legislators about how to fix the enrollment and inspection process, as well as what role the industry can play in helping them do that.

“We need to step up to the plate,” said Cara Bachenheimer, senior vice president of government relations for Invacare. “That may not be a popular sentiment. Some people will say, ‘It’s not our job,’ but it is our job. This issue is not going away.”

In its response to the GAO report, CMS pointed to accreditation as one way it’s already improving the enrollment and inspection process. All providers who bill Medicare must become accredited by Sept. 30, 2009.

Accreditation’s a good start, industry sources say. But they’d also like to see CMS create a more formal system for reporting fraud and abuse. Right now, if providers see fraud happening, they call a general fraud hotline, which has been “sort of like a black hole,” one source said. Moreover, they’d like to see CMS use technology to determine aberrations in spending in real-time, much like credit card companies do.

All those who play a part in improving the enrollment and inspection process have their work cut out for them, industry sources acknowledge.

“From the beginning, CMS took a very laissez faire attitude toward this part of the Medicare benefit, because they thought, ‘Well, they’re vendors; they can’t be credentialed the way that other providers in the Medicare program can be credentialed,’” said industry attorney Asela Cuervo.

For the full report: <a target="_blank" href="">www.gao.