Fraud hearing reopens old wounds

Thursday, June 17, 2010

WASHINGTON - In the wake of last week's hearing on Medicare fraud, the HME industry is, once again, on the defensive.

At the June 15 hearing, conducted jointly by the Ways and Means subcommittees on Health and Oversight, officials with the Government Accountability Office (GAO) and Office of Inspector General (OIG) suggested that national competitive bidding might be an effective tool to prevent fraud.

In a release, AAHomecare President Tyler Wilson responded: "To characterize the bidding program as a mechanism for stemming fraud is extremely misleading. The real solution to keeping criminals out of Medicare is better screening, real-time claims audits and better enforcement mechanisms."

AAHomecare proposed a 13-point plan to combat fraud last year that suggests using tools like real-time claims audits. So do current bills in the Senate and House (S. 2128 and H.R. 4222).

Additionally, AAHomecare points out that there are two provisions already in place to help combat fraud: accreditation and surety bonds, which both went into effect last fall.

OIG chief counsel Lewis Morris also suggested that Medicare pays too much for home oxygen therapy. He stated: "In 2006, Medicare allowed approximately $7,200 in rental payments over 36 months for an oxygen concentrator that cost approximately $600 to purchase. Beneficiary coinsurance alone for renting an oxygen concentrator for 36 months exceeded $1,400 (more than double purchase price)."

The VGM Group, in a bulletin to members, responded that Morris failed to mention that a study conducted by Morrison Informatics suggests that the average cost of providing equipment, supplies and service for an oxygen patient exceeds $200 per month.

To read Morris' full testimony:

To read the testimony of Kathleen King, director of health care, GAO: