Who’s to blame for Wheeler Dealer scam?

Friday, October 31, 2003

COLUMBIA, S.C. - While many industry watchers applauded the aggressive action by CMS to curb fraud and abuse following the Wheel Dealer power wheelchair scam, others are clamoring for accountability at CMS and Palmetto GBA, the DMERC in Region C.

In a commentary published in this issue of HME News, Van Miller, CEO of The VGM Group, asks why CMS Administrator Tom Scully hasn’t terminated the employment of those responsible for not catching the staggering rise of power wheelchair claims in Harris County,Texas.

“It is ironic that we have the very people who are primarily at fault - CMS and their contractors - calling press conferences to blame others,” Miller writes. “They ought to be calling a press conference to announce that they are all resigning.”

Others are asking similar questions about why no one at CMS or Palmetto GBA, which oversees claims for reimbursement in Harris County, stopped the hemorrhaging before the Houston Chronicle shined a national spotlight on Harris County in August.

“Why did it take an article in the Houston Chronicle when for months the industry has been raising these issues and communicating its concerns to the DMERC?” said Ron Kieschnik, owner of Seating Profiles in Houston.

Palmetto GBA, which processed between 24 million and 25 million DMEPOS claims per year, said it identified the Harris County problem late last year and notified CMS, the OIG and the DOJ.

“We put an edit in our medical review department in early spring and began to identify any providers that started billing for [K0011 power wheelchairs] in January,” said Sue Pearcy, vice president of Medicare integrity program at Palmetto GBA. “We identified a network of suppliers in that area and started stopping all of their claims.”

To date, Palmetto GBA has suspended 64 suppliers and denied $15.9 million of $16 million in claims from targeted suppliers.

Pearcy believes the edits and the attention that Palmetto GBA has applied to the fraudulent activity will rein in the tally of K0011 wheelchairs for 2003. The numbers tell a different story.

In 2001, Medicare paid for 3,000 power wheelchairs in Harris County. In 2002, that number grew tenfold to 31,000. Although Palmetto believes that it has got a handle on the growth, utilization over all of Region C grew twice as fast over the first four months of 2003 than it did over the first four months of 2002, according to data obtained through the Freedom of Information Act.

Indeed, CMS believes Medicare will pay for $1.2 billion in power wheelchair claims in 2003. So, despite the revoked supplier numbers, the edits and payment suspensions, the category growth is still hurtling upward.

“It’s just a big network,” said Pearcy. “It has tentacles, and it’s moving into other areas.”

Kieschnik and others are amazed that the DMERCs did not have a mechanism in place to flag the tremendous growth before it soared out of control.

“These are the people writing the checks,” he said. “Where are the safeguards and checks and balances?”

Some, like Administrator Scully, blame the inability to promptly identify fraudulent activity on allocation of resources. While the typical private payor devotes 9% of its budget to administrative costs, Medicare outlays a mere 0.5%

During a September press conference on the power wheelchair scandal, the first question put to Scully, by the Houston Chronicle, queried whether CMS planned to penalize anybody or any entity, such as Palmetto GBA, that had oversight responsibilities for claims now seen to be fraudulent.

“Wild as it may seem, most people would say that Palmetto is one of our three or four best [carriers], if that gives you any idea of what we’re up against here” Scully said. “Palmetto generally does a pretty good job.”

He said CMS would dedicate more resources to Palmetto as a hedge against future fraud.