Providers lament Palmetto GBA audits

Wednesday, July 31, 2002

YARMOUTH, Maine - Paul Smith is not alone (See story).

A handful of providers in Region C have also been stung by what they describe as the "Gestapo tactics" of the region's carrier, Palmetto GBA. Two of those providers, who asked that their names not be used, also shared their stories with HME News recently.


One of those providers, unlike Smith, has managed to stay afloat, even though Palmetto is holding on to $1.5 million of his money. It hasn't been easy but the provider says his company, which took in about $18 million in revenues and employed 150 when it was audited in 1999, had enough capital to withstand the blow. Luckily, the audit also closely coincided with the provider's decision to go online, making it easier for him to jettison six-offices and all but four of its employees.

"We no longer do business with Medicare or any other insurer, though," said the provider, who's been in business since the early 1980s. "If you buy from us, you pay us up front."

While Palmetto's claiming the company provided power wheelchairs without medical necessity, the provider says the carrier's trying to decrease the number of claims it pays out by auditing the most profitable providers in the region and forcing them to close their doors.

"They audit with malice," he said. "Their intent is to shut you down, whether you've done something wrong or not."

The provider says his case is currently in the hands of a U.S. district attorney's office. He says the office is trying to negotiate a settlement, where Palmetto will give him some but not all of his money, but he won't budge. The provider, who's already spent $200,000 in attorney fees, says the FBI has cleared him of any criminal charges.


For another provider, like Smith, the audit by Palmetto rang the death knell for her company. Only this provider had been in business for less than a year and had racked up revenues of only $300,000 when the audits arrived in 1999.

"I've been told they target providers who are successful but also small enough to be put out," said the provider, who's worked in HME for 10 years.

Palmetto claims this provider, too, provided power wheelchairs that are not medically necessary. The carrier's holding on to $200,000 of her money, and because it extrapolated her claims, it's demanding a total of $500,000 back, the provider says.

The provider denies the lack of medical necessity, however, saying all her referrals came from physicians and were well documented. She says the FBI has cleared her of any criminal charges, too.

Palmetto's case against this provider is currently before an administrative law judge. The provider says it's her "last step," because she can't afford to go any further. She's already sold her house. HME