Senate zeroes in on fraud

Sunday, August 31, 2008

In a sign that 2009 may be just as tough as 2008 for the HME industry, two senators promised in late July to fix in the next Congress a healthcare system riddled with Medicare fraud.

At a July 28 meeting of the Senate Republican Conference, Sens. Mel Martinez, R-Fla., and John Cornyn, R-Texas, discussed plans to improve fraud prevention and detection, increase penalties by promoting zero tolerance and devote more resources toward prosecution. While their intentions are broad, HME will be a focus. A graphic circulated at the meeting asked: How much have American taxpayers paid for a wheelchair? $345; $400; $5 million; all of the above. The checked answer: All of the above.

“Authorities estimate that healthcare fraud within Medicare costs taxpayers more than $60 billion every year,” Martinez said at the meeting. “This fraud diverts resources that are supposed to finance healthcare for 43 million seniors and the disabled. This hurts recipients, the legitimate businesses trying to serve patients, as well as every taxpayer across the country.

“No state has contributed more to Medicare fraud than my state of Florida, with some of the most egregious cases discovered in South Florida,” Martinez continued.

At the meeting, the senators also discussed their new bill, the Seniors and Taxpayers Obligation Protection Act or the STOP Act. The bill, S. 3164, would, among other things, require “carriers, prior to paying a claim for (DMEPOS), to confirm with the National Supplier Clearinghouse that the Medicare identification number of the supplier is active and the item or service for which the claim is submitted was properly identified on the CMS-855S Medicare enrollment application.”

Other measures: a tracking system for certain DME with labels bearing unique identifiers or serial numbers; and a surety bond requirement.

Prior to the meeting, AAHomecare distributed a press release that asked the senators to place “appropriate attention on DME fraud but not excessive attention,” said Walt Gorksi, vice president of government affairs. DME is responsible for about 1% of total Medicare fraud.

“What we tried to do is, not deflect attention away from DME, but make it clear that, if the fraud problem is $60 billion in Medicare, DME is only a fraction of that,” Gorski said. “Where else is the fraud?”

AAHomecare also pointed out that CMS contractors, including Palmetto GBA, have let their guard down. CMS in July renewed its National Supplier Clearinghouse contract with Palmetto.

“We want to flush out the fraud in the DME industry more than anyone else,” said John Gallagher, vice president of government relations for The VGM Group. “But it’s also the ineptness of CMS, as magnified by its recent rehire of Palmetto. It’s like rehiring the bank guard after you’ve been robbed five times in a row.”

The $5 million wheelchair referenced in the hearing was clearly a billing error, Gorski said.

With Congress in recess for the whole month of August, industry stakeholders encouraged providers to contact their senators to discuss Medicare fraud.