Moratorium sweeps in ‘hardworking’ dealers

Friday, October 31, 2003

WASHINGTON - The wheeler dealers in Houston who billed Medicare for thousands of medically unnecessary power wheelchairs were “experts at submitting information” and had no problem securing provider numbers, according to CMS sources.

“The suppliers in question did go through the normal supplier enrollment process as defined by CMS,” according Elaine Myers, assistant vice president of customer service strategies and education at the National Supplier Clearinghouse, which issues Medicare provider numbers. “In the NSC’s evaluation, the suppliers met all 21 supplier standards and provided all of the supporting documentation and licenses.”

Following revelation of the Houston scam in September, CMS began an aggressive scrutiny of all new provider number applications - not just those in Houston. Because of that level of scrutiny, CMS does not expect to issue any new numbers until early 2004.

While the moratorium is intended to keep crooks out, many in the industry, including AAHomecare, think it goes too far.

“It really is sweeping in people who are legitimate and hard working,” said Asela Cuervo, AAHomecare’s senior vice president of government relations. “Right now they are using a sledge hammer on a problem that is more appropriate for a scalpel.”

As of Sept. 24, there were 3,769 HME provider numbers in various stages of the approval process, which takes six to eight weeks, including a site visit. Those 3,769 applications include reactivations, renewals, additional locations for existing providers, reconsiderations and hearings.

“A lot of people are complaining because all they are doing is renewing, but the crooks are renewing too, and we’ve got to make sure the crooks don’t renew,” said a CMS spokesperson. “We’ve got to know who these people are and make sure they are reputable dealers.”

That’s fine said a California provider who expected to receive her provider number by Oct. 1.

“I’ve got no problem with that, but if someone in Texas did fraudulent billing, shut them down,” said the provider, who asked that her name not be used. “Don’t tell me that I can’t when I’m doing it the right way. Now you’ve put my personal life in a compromising situation. I could lose my home.”

To raise the money to start her business, this provider mortgaged her home, “emptied out CDs, savings and cashed out retirement plans.” Now she’s looking at ways to develop non-Medicare business and reduce cash outlays until her provider number arrives.

At the moment, the moratorium doesn’t appear to have affected the industry’s merger’s and acquisition activity.

“We have quite a few deals in the works and not a one of them has had even a semblance of a blip as it relates to this guideline,” said Dexter Braff, president of the Braff Group in Pittsburgh. “But it can be an issue, and we are keeping an eye on it.”

In a typical asset acquisition - the majority of all HME acquisitions - if the buyer plans to operate the new location, rather than close it and roll the patients into an existing branch, he must get a new provider number for it. The moratorium could slow acquisitions where a potential buyer doesn’t have the cash to run a new location until CMS issues him a provider number, said Rick Glass, president of Richard Stevens & Associates, an M&A frim in Tarpon Springs, Fla.

Additionally, if the moratorium continues indefinitely, it could slow the pace of HME start-ups, Glass said.

“Are you going to go out and rent space and hire people and sit in an empty office for an indefinite period?” said Glass. “If you know it was four months you’d build it into your business plan, but if you are told it’s indefinitely, I would think that it would stop a lot of people in their tracks.”

CMS acknowledges the industry’s concerns. There’s even some talk that CMS might expedite applications of chains and other providers that pose little risk to the Medicare program, according AAHomecare.

“Our challenge is to keep the good guys in business and get the bad guys out,” said a CMS official. “Like separating the wheat from the chaff, it is not easy.”
Wheeler dealer update
- Industry questions CMS’s role

- Sen. Grassley weights in

- Provider reaction

- Blame falls to doctors, too

- Mainstream media on fraud