Medical Device Daily Washington Editor

Durable medical equipment continues to be the focus of much anti-fraud work on the part of federal authorities, and a recent report by the Office of Inspector General (OIG) at the Department of Health and Human Services indicates that as much as $100 million in billings for lower limb prostheses in 2009 was for claims that should not have been paid.

According to the August OIG report, Medicare paid $43 million in 2009 for claims that were either misleading or lacked information needed to determine necessity, but which OIG states could have been sniffed out with claims processing edits. Among the types of billing problems detailed here were claims “that incorrectly billed for prostheses for both the right and left limbs using two claims rather than one.“ This, OIG states, “allows suppliers to appear to be billing for only one limb when in fact they are billing for both.“

Another problem in this area, the report notes, is that some claims lacked information on potential function level when required, as well as claims that were not necessary given the patient's potential function level.

Regarding the group of $61 million in claims that lacked a prescription, OIG states that the billings were for patients who had not seen a physician in the five years prior to the date of the claim. OIG perhaps understates the case in remarking that such a scenario raises the question of whether the physician ever evaluated the patient and “whether these devices were medically necessary.“

Among the fixes needed to clear up such billings, the report says, is a willingness on the part of the Center for Medicare & Medicaid Services to instruct administrative contractors (ACs) “to implement claims processing edits based on all the local coverage determination requirements,“ but the OIG report also recommended that CMS require that the prescribing physician document a face-to-face encounter with the patient. A third recommendation is that CMS “consider denying as medically unnecessary certain combinations of prostheses“ in response to the separate billing of prosthetics.

CMS agreed to these recommendations, but made the case that it might lack authority to require documentation of a face-to-face encounter between doctor and patient. However, the agency declined to go along with OIG's recommendation to “enhance screening for currently enrolled suppliers,“ stating that the agency believes it “has in place sufficient tools“ to keep an eye on existing suppliers, thanks to a tracking system that triggers an alert when certain conditions are met.

Two KY hospitals agree to pay $8.9M

Anti-fraud and other enforcement work by federal and state authorities continues even when a lot of people are on vacation as indicated by a statement indicating that two hospitals in Kentucky have agreed to pay a total of nearly $9 million to settle allegations of improper billing to Medicare.

According to an Aug. 11 statement at the website for the U.S. Attorney's Office for the Western District of Kentucky, Baptist Healthcare (Louisville, Kentucky) and Hardin Memorial (Elizabethtown, Kentucky) have agreed to pay $5.7 million and $3.1 million respectively “to resolve claims that the company improperly billed Medicare.“

Government attorneys alleged that Baptist and Hardin submitted claims for a number of diagnostic-related group codes that “resulted in higher reimbursement rates than warranted by the actual condition of patients treated.“ Among the purportedly violative claims were those related to respiratory problems, including infections and inflammations, as well as pulmonary edema. However, none of the alleged billings are of particularly recent vintage. The statement notes that the billings all took place between Jan. 1, 2001, and Dec. 31, 2006.

The statement indicates that the claims constituted “payment by mistake and unjust enrichment,“ and the two hospital chains “made no admission of liability.“

Derrick Jackson, a special agent in the Atlanta office of the Office of Inspector General at the Department of Health and Human Services said in the statement, “this settlement will return a significant amount of money back to the Medicare Trust Fund that should never have been paid out,“ adding that protecting the Medicare Part A trust fund “remains a top priority for the Inspector General and U.S. Attorneys' Offices.“

Bayou foursome convicted of wheelchair fraud

The day that durable medical equipment is no longer the object of Medicare fraud might be the day Western civilization comes to an end, or so the persistence of such fraud seems to suggest. According to an Aug. 17 statement at the website for the U.S. Department of Justice, federal authorities along with the Louisiana Attorney General's Office obtained convictions for four members of a DME provider in Baton Rouge, Louisiana, for $4.7 million in fraudulent Medicare billings.

The statement notes that a two-week trial led to convictions for Nnanta Felix Ngari, Sofjan Lamid, MD, Henry Lamont Jones and Ernest Payne for one count each of conspiracy to commit health care fraud and one count each “to defraud the United States and to pay and receive illegal healthcare kickbacks.“ Their operation, Unique Medical Solution, commenced operations in 2003 when Ngari allegedly “paid recruiters, including Jones and Payne, to locate and solicit Medicare beneficiaries to attend health fairs hosted by Jones and Payne at “churches and other locations.“ This was the means by which the team of fraudsters obtained names and Medicare ID numbers to file the claims. Medicare is said to have paid Unique roughly $2.5 million for those claims. DoJ states that both conspiracy counts “carry a maximum penalty of 10 years in prison and a $250,000 fine.“

PTO: patent backlog down to less than 700k

Inventors in the U.S. may be weary of waiting for the U.S. Patent and Trademark Office to review patent applications, but according to a recent entry at the PTO blog, the backlog of new patent applications has fallen to less than 700,000. This development was reported the same day that PTO announced it had recently reached the milestone of eight million approved patents.

PTO's commissioner of patents Bob Stoll said in the Aug. 16 blog posting that the backlog of initial patent applications had dipped to roughly 690,000, although first-action pendency had notched up slightly, from 27.2 months to 27.8 months. In times gone by, the typical delay to first action had been pegged at 36 months.

Still, Stoll can be forgiven for crowing about the metrics he reported. He noted that more than 410,000 new applications had arrived at PTO to date this fiscal year, a noticeable uptick over the 397,000 or so patents that were filed at the same point in fiscal 2010.

Regarding the issuance of patent number eight million, PTO's Aug. 16 statement remarks that inventors needed 75 years to get to one million, a level achieved in August 1911. To cover the ground between seven million and eight million, however, took less than six years. PTO director David Kappos will formally award this patent, which is for a miniature video camera to supplant the function of the eye, Sept. 8 at the Smithsonian American Art Museum.

Mark McCarty, 703-268-5690