Fifty-nine OIG agents dog power chair fraud

Sunday, November 30, 2003

WASHINGTON - When it comes to power wheelchairs and fraud, Acting Principal Deputy Inspector General Dara Corrigan has plenty to say and will soon have more. This spring, look for an OIG report that examines whether the price for K0011 wheelchairs is “fair or whether they are so high that they can be exploited,” said Corrigan, who took over the department’s top spot in June, and is in the running to replace Janet Rehnquist, who resigned. While she’s not prepared to say what the report may indicate, “a lot of kickbacks” can be paid out of Medicare’s current reimbursement for K0011 wheelchairs, she said. If you are wondering just how serious the OIG views fraud, consider this: The department had dedicated 59 agents to rooting it out. Last month, Corrigan sat down with HME News and discussed the Wheeler Dealer power wheelchair scam in Harris County, Texas, which came to light in September, and related issues.

HME News: Over the past year, power wheelchair fraud ran rampant in Harris County. Is that area an aberration or is power chair fraud more pervasive?

Dara Corrigan: I’d like to say it was an aberration in Harris County, but, unfortunately, I don’t think it is. While I do think the numbers in Harris County are unique and unusual, we are investigating in 23 states, and we have 50 open investigations, which can encompass more than one provider, so it isn’t confined to Harris County.

HME News: We’re not seeing the kinds of utilization spikes in other DMERC regions that we saw over the past year in Region C, where Harris County is located. That seems to indicate fraud in other parts of the country may not be so drastic.

D.C.: I think you’re right that it is not as drastic as Harris County. It’s hard to imagine how anything could be as drastic as Harris County.

HME News: Is there a flaw in the Medicare system that lets fraudulent cases blossom?

DC: I would say there is a flaw in human beings that allows this to happen. We do have a system that is based on trust. If the paperwork looks appropriate and the item is covered and it is necessary for the treatment of the beneficiary, Medicare pays. If someone lies about all of that, it’s a real problem. And it isn’t something that is going to be picked up by most people unless there is an investigation, or unless a beneficiary gives us a tip or there is a whistleblower.

HME: Are you working on ways to change the system so that it is more resistant to fraud?

DC: In the area of pricing for DME and in particular wheelchairs, we have been concerned for a long time that the prices are inflated. If you have prices that are not fair, then that item is ripe for fraud. Kickbacks can be paid, and easy money can be made. It is incumbent on our office to look at pricing. We’ve been looking at pricing in the arena of drugs, and durable medical equipment. We will have a pricing study that will come out in the spring that will examine whether or not the price for K0011 wheelchairs are fair or whether they are so high that they can be exploited. The past has shown they can be.

HME: Of course, the crooks aren’t providing the assessment and services legitimate HMEs provide. That means fraudulent profits will be higher. If you decreased reimbursement on power chairs, it could hurt legitimate rehab providers who by all accounts make low to modest profits.

DC: We have no interest in harming legitimate providers. We are trying to take an independent look at pricing and factor in some of the things that you are talking about like services, and how much that increases the cost. I think it’s important for the program to be sound so that we can pay for these types of items. I want to reserve judgment on whether the prices are inappropriate. But I will say our examination so far has shown that a lot of kick backs can be paid out of the money we are currently paying for power wheelchairs.

HME: How do you evaluate pricing?

DC: You try and get as many prices as you can on the open market. You go to Veterans Affairs, which is different from Medicare but can still provide a baseline. You go on the Internet and buy wheelchairs and see what kind of service is provided. You see if you can get wholesale prices.

HME: The HME industry has never been able to shake the perception that its rife with fraud and abuse. Is there something about the industry that perpetuates this perception?

DC: A lot of suppliers are not established, regulated entities. You can view a physician or hospital as a regulated entity. They have to be licensed. They are surveyed and evaluated in ways that DME providers are not. So unfortunately the industry is in a tough spot.

HME: Would mandatory accreditation raise the status of the industry in the eyes of regulators and other healthcare professionals?

DC: I think it would help. If CMS decided that those types of credentials would help them sift through the good and the bad providers, I think it would be to everyone’s benefit. I think it would help enhance reputation for suppliers who are operating appropriately.

HME: Beyond CMS’s new 10-point plan to combat fraud, has the OIG identified any obvious loopholes in the system that should be closed?

DC: I think the 10-point plan hits the loopholes. In terms of identifying the problems, it does a great job. Whether or not CMS will be able to implement fixes for all those problems is really the test.

HME: Should we see an immediate drop-off in K0011 claims in areas where there was abuse?

DC: You should because CMS is reviewing each claim individually now in Harris County and there is an education effort in Harris county. So if there isn’t a drop off, something is wrong.

HME: Should someone at Region C or at CMS have picked up sooner on the skyrocketing utilization of K0011s in Harris County?

DC: It’s easy to be a Monday morning quarterback. But if you have a system where Medicare is relying on people to tell the truth and people don’t tell the truth, that isn’t going come across in the claims they review. That being said, when there is a 450% increase in over a year, it’s incumbent upon everyone in the government to get on the stick and do something, which I think is what is happening here.

HME: If Medicare is a system based on telling the truth, what can be done to decrease fraud?

DC: In some ways, people have to know that they are going to get caught. It may not be today, and it may not be tomorrow, but they need to know that special agents are out there. We have 59 (OIG) agents out there looking specifically at power wheelchair fraud. I think the deterrent effect of successful prosecution, where people are put in jail for this type of fraud, which we have, is going to be one of the best deterrents.