Q. What is the likelihood that I could be investigated for fraud and abuse?
A. According to government and industry sources, investigations of DMEs are increasing. Consider this from a report dated November 2009 on CMS's Comprehensive Error Rate Testing (CERT) program: "Detecting and reducing Medicare waste, fraud and abuse is one of HHS's highest priorities to ensure that the program remains strong for current Medicare beneficiaries and future generations. To this end, CMS has significantly revised and improved the way that it calculates the Medicare fee-for-service error rate."
The CERT program compiled statistics of claims submitted and found that the DME MAC error rate was a whopping 51.9%, representing $5.4 billion dollars in claims erroneously processed. The report was quick to point out that "the error rate is not a measure of fraud; however, it may be an indication of a program weakness that requires more oversight and diligence by CMS." Indeed, the report goes on to say, "The CERT program does not, and cannot, label a claim fraudulent."
The investigators seemed to go out of their way to explain that a change in research methodologies was largely responsible for the high number. CERT analysts, for example, strictly enforced the requirement that documents contain legible signatures of the authorizing physician--and signature stamps are not acceptable. Claims not meeting these criteria were judged "erroneously paid." The national paid claims error rate in the Medicare FFS program for this reporting period was 7.8%, which equates to $24.1 billion.
Although the DME portion of the Medicare Trust Fund amounts to only 4%, the perception of fraud, abuse and waste will likely be inescapable.
My failure to take CMS documentation requirements seriously resulted in the loss of my company and my freedom when I was sentenced to five months in a federal prison camp. CMS is determined to evaluate all claims more closely and the ease of a conviction over even a relatively small amount will surprise you. In my case, $77,000 was in question and ultimately recouped. The value of being organized, well-documented and proactive cannot be overestimated.
Frank Margulis is president of Margin Consultants LLC. Reach him at www.MarginConsultants.com.