Medical Device Daily Washington Editor

The Department of Justice and the Department of Health and Human Services (HHS) have announced a plan to boost efforts to combat Medicare and Medicaid fraud, concentrating the effort "among a group of key stakeholders at the highest levels of DoJ and HHS," according to May 20 comments by Attorney General Eric Holder.

Fraud has been the bane of Medicare and Medicaid for a number of years, and the Office of Inspector General (OIG) at HHS has put substantial resources into the problem. All the same, the thousands of providers of durable medical equipment and the antiquated nature of much of the information technology infrastructure at the Centers for Medicare & Medicaid Services has made it difficult for authorities to chase down and prosecute fraudulent billings.

Holder described the program as "part of the administration's ongoing commitment to fiscal responsibility and accountability," and noted that since 1997, "when Congress established the Health Care Fraud and Abuse Control program, our departments have returned more than $14.3 billion to the federal government."

HHS and DoJ, Holder said, are "launching a new effort with increased tools, resources and a sustained focus by senior-level leadership" in the form of a task force dubbed the Health Care Fraud Prevention & Enforcement Action Team (HEAT), that is geared toward improving coordination and data sharing between the two departments' investigators and prosecutors. However, HHS will have to keep DoJ up to date on approvals and indications for drugs and devices in order to properly leverage planned boosts to information technology and employee training.

Holder mentioned that inter-department coordination in the form of Medicare fraud strike forces have cleaned up things in the state of Florida substantially. He said that efforts in the Sunshine State allowed prosecutors in Miami, Florida, to file 87 indictments for 159 defendants in 2007. This, Holder said, led to a drop in billing for durable medical equipment of $1.75 billion in claims and $334 million in payments, adding that the action has had a deterrent effect. A similar effort the following year in California led to indictments of 37 alleged perpetrators of fraud.

Holder said the HEAT group will consult with the FBI and the Office of Inspector General at HHS in addition to state offices of attorneys general.

HHS secretary Kathleen Sibelius said at the press conference held on the task force announcement that the federal government is "turning up the heat on perpetrators who steal from the taxpayers and threaten the future of Medicare and Medicaid," adding that "we cannot and will not allow billions of dollars to be stolen from Medicare and Medicaid through fraud, waste and serious abuse of the system." She said that the improvements to the IT base in pursuit of fraud will "bring the fight . . . into the 21st century and put the resources on the streets and out into the community to protect the American taxpayers and lower the cost of healthcare."

In a May 20 statement, Tyler J. Wilson, president of the American Association for Homecare (AAHomecare; Arlington, Virginia), said the association supports "expanded and more effective government efforts to stamp out fraud," but noted that such discussions "obscure several facts: home-based care is vastly more cost-effective than institutional care; durable medical equipment represents about 1.6% of Medicare spending; and spending growth in this sector is a mere 0.75%, according to federal National Health Expenditure data."

Joe Antos, a healthcare policy scholar at the American Enterprise Institute (Washington), told Medical Device Daily that "the only time we saw a decline in Medicare spending" was in 1997, when the anti-fraud legislation referred to by Holder was passed. "There's no doubt that this kind of aggressive public policy" works to cut down on fraud and erroneous billing, the line between which he said was quite thin at times. He said that the "net result (of the 1997 law) was that healthcare execs got marched" into court and hit with fines and prison sentences.

OIG: Palmetto's CERT audits faulty

At the behest of the Senate Finance Committee, the Office of Inspector General at HHS recently examined the efforts by Medicare's carrier for durable medical equipment, Palmetto GBA (Columbia, South Carolina) to keep a lid on erroneous billing, but in a May 12 report, OIG said that an auditing contractor hired by Palmetto is falling short of the mark.

OIG's report says that the contractor's audits "did not provide assurance that the [fiscal year] 2008 DME error rate was accurate, alleging that the comprehensive error rate testing (CERT) obtained by the contractor understated the problem by a substantial number. OIG asserts that "Palmetto found that 175 of the 250 sampled claims were in error, significantly exceeding the 23 errors found by the CERT contractor." The contractor was said to have conceded the point on 17 of Palmetto's findings, but held ground on the remaining 135 determinations. According to OIG, Palmetto's determinations were based on lack of documentation to establish medical necessity.

OIG recommended that the CERT contractor put together a corrective action plan to cut down on the number of incorrect determinations and put more effort into obtaining the pertinent medical records from providers used to determine medical necessity. CMS is said to have agreed with the findings.

FDA: White Oak move may delay apps

FDA's move from it's campus in Rockville, Maryland, to nearby Silver Spring does a lot of things, including confirm a suspicion long held by the transient American worker: moving across town is almost as much trouble as moving across the country.

However, FDA posted a notice in the May 21 edition of the Federal Register informing the reader that as the various offices of the Centers for Devices and Radiological Health make the move, those staffers will not be able to access any submissions on the Friday preceding or the Monday following a move. Although the notice does not specify snail-mail, the agency notes that incoming items "will be logged on a staggered basis to preserve equity in the order of receipt. FDA urges interested parties to keep track of the move by logging on to: