Wheeler dealers

Tuesday, September 30, 2003

BALTIMORE - A huge Medicare scandal in Houston has prompted CMS to roll out a 10-point plan to halt the wheeling and dealing of power wheelchairs by unscrupulous doctors and suppliers.

The power wheelchair business, particularly in Harris County (Houston) Texas, “has turned into an unenforced, unregulated pocket of free taxpayer money to people who are taking advantage of it,” CMS Admistrator Tom Scully said. “And we have every intention in the world of coming down unbelievably hard on them.”

As part of Operation Wheeler Dealer, CMS is setting new national policies for the provision of power wheelchairs. Doctors must now see a patient before writing a prescription for power wheelchairs.

Scully said no new DMEPOS suppliers numbers are likely to be issued while CMS applies a new, aggressive level of scrutiny to all new applications for supplier numbers. He also declared that power wheelchairs would be the first target of inherent reasonableness.

The scam, first reported in the June issue of HME News and in the Aug. 17 issue of the Houston Chronicle, involved dealers who were billing for power wheelchairs they never delivered and doctors who signed off on staggering numbers of claims.

The Chronicle reported that one doctor, Lewis Gottlieb, filed more than 25,000 claims for Medicare reimbursement in 2002 - some for psychiatry and others for power wheelchairs.

Between Aug. 2001 and Jan. 2003, a group of five doctors signed CMNs for 2,700 Medicare claims, the Chronicle reported.

In Harris County, Texas alone, Medicare paid for more than 31,000 power wheelchairs, or 19.5% of the 159,000 power chairs Medicare paid for nationally in 2002. In 2001, Medicare paid for 3,000 chairs in Harris County.

Although the OIG has prosecuted major DME scams in Florida, Michigan, Georgia, California and Pennsylvania in recent months, industry observers say none come near the egregious levels reached in Harris County.

“This is just incredible,” said Dan Meuser, president of Pride Mobility products. “We have a high level of market intelligence, and we have not one scintilla of reason to believe that even one-tenth of this situation exists anywhere else.”

Both Pride and Invacare say they began informing CMS of the anomalous Harris County situation earlier this year. Each company reports that it turned down overtures to do business with dealers now implicated in the scam.

The nation’s largest power wheelchair supplier, The Scooter Store, first noticed an alarming rise of power wheelchair claims in Region C in the HME News Databank late last year. The company’s CEO, Doug Harrison, said he alerted Invacare and Pride to the “mind-boggling” growth, partly to let them know The Scooter Store was not driving it.

“From 2001, 02, 03, we’ve been on a three-year decline in the entire greater Harris County area,” Harrison said. “This year, our volume in Region C as a whole is down more than 35% from last year.”

Hoveround, the nation’s second largest power wheelchair supplier, also distanced itself from the scandal with revelations of its business in Harris County. In 2001, Hoveround filed claims for 29 units; in 2002, it was 79.

Invacare and The Scooter Store issued press releases supporting CMS’s 10-point plan. Pride’s Meuser said the company also firmly supports CMS’s actions.

The high rate of utilization in the K0011 power wheelchair category is a sore spot for many companies in the HME industry. The Harris County scandal confirms what many believe to be true about excesses in the K0011 category.

“It’s very important that we not confuse the growth and utilization issue with fraud,” said Invacare CEO Mal Mixon. “Fraud is fraud. This in Harris County is not about utilization. It’s about catching crooks.”

CMS’s Scully faulted Medicare’s existing infrastructure for creating a loophole that allowed nearly 20% of the Medicare programs expenditures for power wheelchairs to go to dealers serving a single county.

“We run a very large, very fast check-paying system, which has very little oversight, very little utilization control,” he said. “And because none of the contractors have money at risk, you get, I believe, horrible performance for your tax dollars.”

If Blue Cross of Texas had been managing power chair distribution in Texas, Scully said he believed the scandal would not have happened.

The Region C DMERC is administered by Palmetto GBA, a division of Blue Cross Blue Shield of South Carolina. Scully said Palmetto was considered one of the bet three or four of Medicare’s 47 contractors.

As a result of the scandal, he said Palmetto would get more resources. “They are going to be spending a lot more time focusing on this (power chair claims),” he said.
CMS’s 10-point plan to reduce PWC fraud:
1. CMS will immediately begin aggressively scrutinizing all new applications for supplier numbers

2. CMS will publish regulations that will enhance the ability to screen new supplier applications to identify and prevent inappropriate enrollment of suppliers by providing a more detailed screening process,

3. All payments for PWCs in Harris County, Texas will be individually approved by CMS staff on a special task force.

4. All wheelchair suppliers in Harris County must attend training on wheelchair coverage and medical review policies.

5. CMS will finalize regulations revising coverage policy for motorized wheelchairs and scooters to assure that national policy accurately defines the conditions under which Medicare will cover mobility products.

6. DMERCs will immediately adopt Local Medical Review Policies (LMRP) that accurately portray the clinical conditions for which mobility products are reasonable and necessary.

7. The DMERCs will adopt a consistent approach to medical review so that when national billing and utilization trends are identified.

8. Motorized wheelchairs will be the first item analyzed for potential inherent reasonableness adjustments.

9. CMS will work with physicians to clarify prescribing responsibilities, and with beneficiaries, to explain coverage criteria.

10. The OIG will continuing its investigation of suspicious providers.