Government singles out HME again

Friday, August 31, 2007

Is there fraud in the HME industry? Of course. Is there fraud in the physician profession? Absolutely. Is there fraud in the hospital industry? You bet. Is there fraud in the pharmacy profession? No doubt. In fact, there is fraud in every walk of life: governmental agencies, church ministries, the widget industry and the legal profession (I know, I is hard to believe).
CMS recently announced a two-year initiative designed to prevent fraud by HME companies in Los Angeles and Miami. Thousands of HME suppliers will be required to reapply for Medicare supplier numbers within 30 days of receiving notice from CMS to re-enroll. I guess I missed it, but surely there is another CMS anti-fraud initiative that requires physicians in New York and Texas to reapply to be Medicare providers. Doing so will uncover a number of fraudulent physicians in these two states. And what about the initiative that requires hospitals in Pennsylvania and New Jersey to reapply for provider status? Certainly, such an initiative will reveal that a number of those hospitals have been billing Medicare improperly. Why stop with anti-fraud initiatives? If competitive bidding is good for the HME industry, it will be equally good for physicians and hospitals. However, the last time I checked, there are no competitive bidding proposals rattling around Capitol Hill or within the bowels of CMS that apply to physicians and hospitals.
In a cynical way, what I am saying is that once again the HME industry is being singled out by CMS. From a percentage standpoint, are there more fraudulent players in the HME industry than in the physician profession and the hospital industry? I doubt it. Certainly, dollars paid by CMS for fraudulent claims submitted by HME suppliers pale next to the money CMS pays for fraudulent claims submitted by hospitals and physicians. Unfortunately, the HME industry is an easy target for CMS--low-hanging fruit. The HME industry is small and very young. AAHomecare and the state HME associations are doing a masterful job in educating politicians and governmental agencies on the merits of HME suppliers, particularly the costs Medicare saves by keeping patients in their homes. But let's face it. AAHomecare and the state associations do not have the size, money and political clout of the AMA and AHA. While it would be a daunting challenge (and probably a loser) for CMS to take on the AMA and AHA, it is relatively easy for CMS to hammer the HME industry--again, the low-hanging fruit doctrine.
Are there fraudulent HME suppliers in Los Angeles and Miami? Of course there are. However, most of these fraudulent players can be dealt with by mandatory accreditation and increased scrutiny by the NSC and the Program Safeguard Contractors (PSCs).
I am all for mandatory accreditation for every HME supplier that bills Medicare. This, by itself, will weed out many of the dishonest and/or incompetent companies. CMS needs to issue a clear rule that by a specified date all HME companies throughout the country that bill Medicare must be accredited by one of the CMS-approved organizations. The date must be far enough out to allow companies to complete the accreditation process.
The NSC can enhance its role in eliminating fraudulent players by increasing its focus on three areas. First, the NSC needs to carefully examine first-time applicants for supplier numbers. Its site inspections should be more thorough than they are now. Second, the NSC needs to be equally thorough when an HME company's supplier number comes up for renewal. Lastly, the frequency and thoroughness of unannounced site inspections should be increased dramatically. If a site inspector determines that an HME supplier is materially noncompliant with the supplier standards, then the NSC can revoke the company's supplier number. Indeed, in remarks made by Secretary Leavitt on July 17, 2007, before the Budget Committee, he pointed out the importance of unannounced site inspections and the success that CMS and the NSC have had in revoking supplier numbers of HME companies that did not pass the site inspections. The PSCs need to continue to refine their tools to identify problematic claims and claims trends. Increased NSC and PSC involvement, coupled with mandatory accreditation, will substantially decrease the number of unsavory players.
The vast majority of HME companies are committed to their patients and to honest business practices. This is true for physicians, hospitals, ministers and any other person or business that serves the public. It is patently unfair for the HME industry to be singled out. Fairness would dictate that CMS work with the HME industry in the same way that it works with physicians, hospitals, pharmacies, labs and other healthcare providers.
It is time for CMS's punitive, guilty-until-proven-innocent approach to the HME industry to stop.
Jeff Baird chairs the Health Care Group at Brown & Fortunato, a law firm in Amarillo, Texas. He can be reached at (806) 345-6320 or