Fraud demo: 'It's part of doing business with Medicare'

Sunday, July 8, 2007

WASHINGTON – In the days following the launch of a new two-year demo to crack down on home medical equipment fraud in the Los Angeles area and south Florida, providers appeared unruffled.

“I agree with what they’re doing,” said Steven Nelson, CEO and president of Okeechobee Discount Drugs in Okeechobee, Fla., near Orlando. “If CMS would have enforced its rules from the beginning, we might not be facing competitive bidding right now.”

In the next few months, CMS will ask about 5,000 providers in the Los Angeles area and about 2,700 providers in south Florida to reapply for their billing numbers. The agency will then review applications and conduct multiple unannounced site visits to determine whether providers can continue billing Medicare.

Providers like Raul Lopez say they don’t fear CMS’s latest attempt to put the DME industry under a microscope, as long as the agency conducts the demo fairly—and “I stress fairly.”

“It won’t be pleasant and it will mean increased paperwork, but anything that CMS can do to reduce and eliminate fraud, I’m for it,” said Lopez, director of operations for Bayshore Dura Medical in Miami Lakes, Fla., and president of the Florida Association of Medical Equipment Services (FAMES). “People don’t realize the hurdles that we, as legitimate providers, have to jump over to get claims through.”

To conduct the demo “fairly,” CMS must not penalize providers for hiccups like their insurance running out in the time that it takes the agency to review their applications, Lopez said.

Rob Brant, general manager of City Medical Services in Miami Beach, Fla., agreed.

“Say they show up (at a provider’s location) and the door is locked, because it’s not the best neighborhood,” he said. “If there’s a sign with a phone number and hours, like there should be, call and say, ‘Hey, we’re outside your door.’ I feel bad for some of the legitimate providers who get written up.”

Overall, providers see the demo as another opportunity to separate the good, the bad and the ugly.

“Unfortunately, there are still companies out there giving us a black eye,” Brant said.

Rich King, CEO and president of ProMed DME in Los Alamitos, Calif., summed up the sentiments of several providers: “It’s part of doing business with Medicare. The extra paperwork and site visits—we get them anyway. It’s not a big deal.”

Providers, in Florida at least, weren’t surprised by the demo. They pointed out that the Office of Inspector General (OIG) recommended in a recent report on compliance in south Florida that CMS “strengthen the supplier enrollment process.”

For a fact sheet on the demo from the Department of Health and Human Services, go to