Congress: Here's how to stop those crooks

Monday, March 22, 2010

I have felt for several years that the starting point of Medicare fraud and abuse is the NSC letting crooks have a supplier number.

My take on all the various tactics being generated by Congress and CMS to reduce fraud by impacting legitimate suppliers: The HME industry should lobby for legislation to require that the NSC/its parent company acquire a surety bond equivalent to the amount of DME fraud reported/estimated to have occurred the prior year. And if recoupment of fraudulent claims is not possible (due to money being sent overseas or to the front person for a fake DME not having the money paid by Medicare), then the NSC's bond has to pay back the Medicare fund until such time as recoupment is made. The cost of the surety bond premium cannot be passed onto Medicare, just taken off the bottom line of NSC/Palmetto GBA/BCBS of South Carolina.

In addition to the NSC surety bond, I think that a line of credit should be set up for all new HME suppliers. When an HME company sets up an account with an HME manufacturer, we are given a line of credit based on our being a new account of that manufacturer. The same concept would help prevent fraud significantly if applied to Medicare payments to new suppliers. A new supplier would be given, say, a $25,000 line of credit. Any claims in excess of this amount would not be paid until the initial batch is determined to be legitimate. Contracted companies that are set up to do post-payment audits could be tasked with checking the legitimacy of a new supplier if DME MAC personnel are unable to (as they have been in past until it was way too late). Then the line of credit is extended to $50,000. Again, claims in excess would not be paid until the $50,000 batch is determined to be legitimate. And so on.

What crook would want to go through all of this trouble? The line of credit concept also limits exposure to big fraud. How many millions in prosthetic limbs were billed in south Florida that were never delivered? Did we ever hear how much of that money was recouped and what it cost to recoup?

- John Mishasek, BOCpedorthist