CMS unveils fraud prevention measures

Sunday, October 12, 2008

WASHINGTON - CMS plans "aggressive new steps" in its battle against Medicare fraud and abuse, the agency announced Oct. 6. One of those steps: a national recovery audit contractor (RAC) program.

The RACS would be paid "contingency fees" on under- and overpayments, a system stakeholders liken to "bounty hunting."

"They are geared toward finding fraud and have had a tendency to nitpick small issues," said Andrea Stark, a Medicare Consultant with MiraVista. "It can have its place, but it's not really driving at the heart of the matter."

The RACs, which will begin provider outreach this month, are:
* Jurisdiction A: Diversified Collection Services of Livermore, Calif.
* Jurisdiction B: CGI Technologies and Solutions of Fairfax, Va.
* Jurisdiction C: Connolly Consulting Associates of Wilton, Conn.
* Jurisdiction D: HealthDataInsights of Las Vegas, Nev.

CMS also said it plans to look at trends and patterns through its new program integrity contractors to focus on suppliers with higher than average billings; and work directly with beneficiaries to ensure that billed-for DME was received and medically necessary.

That's all well and good--if there are workable policies and procedures in place at CMS, said Stark.

"They need to be able to take inquiries, funnel the information and then do something about it," she said. "They need to listen to hotline complaints and make reporting fraud more accessible."

Other things Medicare will do to help reduce fraud and abuse include:
* Conduct more stringent reviews of new DMEPOS suppliers' applications, including background checks to ensure that a principal, owner or managing owner has not been suspended by Medicare;
* Make unannounced site visits to double check that suppliers and home health agencies are actually in business;
* Implement extensive pre- and post-payment review of claims submitted by suppliers, home health agencies and ordering or referring physicians;
* Validate claims submitted by physicians who order a high number of certain items or services by sending follow-up letters to these physicians;
* Verify the relationship between physicians who order a large volume of DMEPOS equipment or supplies or home health visits and the beneficiaries for whom they ordered these services;
* Identify and visit high risk beneficiaries to ensure they are appropriately receiving the items and services for which Medicare is being billed.
CMS will consolidate its program safety contractors (PSCs) with new Zone Program Integrity Contractors (ZPICs). Eventually, those new contractors will be responsible for ensuring the integrity of all Medicare claims, Parts A, B, C and D.

While CMS seems to be embracing a more proactive approach to fighting fraud, it's important that the HME industry gets a seat at the table, said Walt Gorski, AAHomecare's vice president of government affairs.

"We want to talk with CMS to share our ideas, to hear what works and what hasn't," he said. "We need to get a lay of the land as to what CMS's capabilities are on these issues. For past efforts that have not gone far enough, is it a manpower issue? A financial issue?"

In order for any fraud effort to work, it's important to ensure CMS has the resources it needs, agreed Michael Reinemer, vice president of communications and policy for AAHomecare.

"Congress, CMS, law enforcement agencies, states and patient advocacy groups need to work shoulder to shoulder to nip this in the bud," he said.