Deal out wheeler dealers

Tuesday, September 30, 2003

Editor, HME News

Let’s cut to the chase about the current power wheelchair fiasco in Houston: First, and most importantly, this is not an HME industry problem. This is a Medicare problem, and this is a DMERC problem.

Say what you will about the marketing strategies of the geriatric mobility suppliers across the country but first, what do you say to this: 31,000 claims for power wheelchair reimbursement, or just about one-fifth of the 159,000 claims filed last year, come out of a single county in Texas; there’s no real clampdown on this issue until the industry alerts CMS Administrator Tom Scully to the magnitude of the problem; and the Houston Chronicle blows the lid off the scandal with a front-page story.

Scully credited Invacare as the entity that brought this problem to his attention. And there’s no doubt that the Chronicle’s coverage precipitated a swift response that we see in the 10-point plan. But where were the internal safeguards that should have preceded the industry’s whistle-blowing?

In a conference call with CMS Administrator Scully, the first question from the press asked how this could have happened. Scully’s ready response: “You’re not going to like this answer.”

The more involved explanation is this: Medicare will spend $1.2 billion of $280 billion on power wheelchairs this year, so power wheelchairs are not blipping anywhere near the center of Medicare’s radar screen. That’s partly why no one noticed the Harris County, Texas surge.

Another part of the problem, according to Scully, is this: While roughly 9% of a private payor’s costs are administrative, only 0.5% of Medicare’s costs go to administrative expenditures. What that means is that there’s very little money devoted to oversight.

Scully also blamed a lack of financial incentive for the carriers to catch this sort of thing. “Because none of the contractors have money at risk, you get, I believe, horrible performance for your tax dollars,” he said. “I don’t believe this would happen if Blue Cross of Texas was paying for it.”

But there are some flaws in this reasoning. First, remember that Palmetto GBA is a division of Blue Cross and Blue Shield of South Carolina, a private payer. Does BCBS of South Carolina care so little about its Medicare contract that it cannot set up a system to stop a Medicare scam before it costs taxpayers more than 100 million?

Although power wheelchairs may be a drop in the bucket for Medicare overall, it is not a drop in the bucket for Palmetto GBA. There are 47 contractors processing claims for Medicare. Four of them, including Palmetto GBA, focus on DME. Power wheelchairs, after home oxygen, is the most significant Medicare DME expenditure. If power chairs are not at the center of Palmetto’s radar screen, what is?

Palmetto’s vice president of Medicare integrity program, Sue Pearcy, told HME News that the carrier did catch the escalation toward the end of last year. While they fielded just 120 complaints from Medicare beneficiaries last year, this year that number has exploded to more than 1,500.

Palmetto has recouped $5 million based on those complaints. Palmetto has suspended 64 suppliers. They’ve denied $15.9 million in claims from a network that’s filed $16 million claims over a recent reporting period.

So, the enforcement gears are turning. The only problem is that this is all after-action, and that flags weren’t flying before taxpayers forked over tens of millions of dollars to a bunch of bandits.

CMS is implementing a series of steps to keep this from happening in the future. Good. This industry’s been the beneficiary of too much grief at the hands of those, from outside the industry, who know DMEPOS is easy picking.

“When you have a system where you can get a provider number any time you want, send a bill to Medicare and get $5,500, you tend to draw the most illegitimate people in the U.S. pretty quickly, and that seems to be what’s happened here,” said Scully.

The first two-points of his 10-point plan to curb fraud and abuse involve putting restraints on new suppliers. That’s welcome news all over.

Dan Meuser, president of Pride Mobility Products for one, would like Medicare to make it much tougher to start billing the program.

“I don’t think people understand the level of responsibility it takes to be a provider until they’re in this business for five years,” he said. “You get some new provider firing away at 30% over his costs, and he has no idea that 30% of his real costs are service.”

If this industry ever wanted a reason to get behind mandatory accreditation for HME, here it is.