Some HMEs 'don't get it'

Saturday, April 30, 2005

YARMOUTH, Maine -- Today's hyper-competitive environment has encouraged an increasing number of desperate HMEs to engage in questionable and potentially fraudulent marketing tactics as a way to buck up their flagging revenues, say industry attorneys.
Additionally, with Medicare and Medicaid slashing reimbursement for durable medical equipment, the temptation has increased for some providers to engage in schemes they wouldn't consider in rosier times, attorneies say.
"Greed doesn't tend to come out until money starts tightening," said Neil Caesar, president of the Health Law Center in Greenville, S. C. "This is not a short term phenomenon nor has it peaked."
In his practice, Caesar has seen a resurgence in providers looking to concoct relationships with doctors that are poorly disguised attempts to pay them for referrals.
"They want to offer 20 guys 20 different (medical director) contracts on the theory that if they are getting money they are going to focus all of their loyalty on that supplier," Caesar said.
He's also seen some "strange" lease agreements between doctors and providers. An HME, for example, might be paying too much for office space he doesn't use or full price for space he shares. In one instance, Caesar said, a provider leased desktop space from a doctor for equipment storage.
With DME fraud having been so well publicized over the past five to 10 years, it seems unbelievable that providers would pay doctors for referrals and engage in other such well know verboten activities. But almost on a daily basis, said healthcare attorney Elizabeth Hogue, "we find all sorts of misconceptions about these issues."
"It sure seems like when we start feeling comfortable that the industry gets it, then there is a whole new generation of DME providers who are clueless," added Jeff Baird, a healthcare attorney with Brown & Fortunato in Amarillo, Texas.
Hogue called competition among today's HMEs "as fierce as I've ever seen it." To survive and thrive, providers need to market aggressively, but they also need to know the rules, she said.
"I don't know why it is so hard for people to understand that you can't do things in the healthcare industry like you can in other industries," Hogue said. "There are special rules. Whenever you think about a marketing strategy the first thing that should pop into your head is: What are the legal implications."