A Medical Device Daily

A new book released by the SCAN Foundation (Long Beach, California) suggests that the Medicare system, which does not cover long-term care, may actually be filling a need for long-term care among the nation's elderly by paying for post-acute-care services that are similar to long-term care.

The book notes that in 2007 long-term care accounted for nearly one-third of the $312 billion in overall Medicaid spending, with an additional $350 billion in unpaid care being provided by families and other private sources.

Joint reform efforts that address the full spectrum of acute and long-term care needs could produce innovative financing and delivery systems that result in more efficient and higher quality care. The study was conducted by Avalere Health (Washington), an advisory company focused on business strategy and public policy.

"The Avalere chart book indicates that although Medicare was never designed to address long-term care, which is an integral and growing factor of any healthcare reform proposal, there is still a need for long-term care services among the Medicare population," said Dr. Bruce Chernof, president/CEO of the SCAN Foundation.

He added, "We may have sufficient funding in the system now, but we are not using it efficiently. Families, nonprofits, and state agencies are taking the lead in developing new ways to provide and pay for services, but they are hobbled by Medicare models designed to pay for acute and post-acute care and lack of integration between Medicare and Medicaid."

Chernof said, "We need flexibility based on the recognition that America's seniors want to stay independent as long as possible."

Maintaining that long-term care that combines healthcare and social services, with the goal of helping seniors remain independent longer, advocates have argued that a continuum of care produces better health outcomes.

It is also more cost-effective than the traditional acute fee-for-service healthcare model that relies on expensive nursing home and hospital stays.

The SCAN Foundation said the long-term healthcare revolution "is being driven by the surging growth and longevity of America's senior population." The 65 and over population is expected to increase from about 40 million to 70 million between 2010 and 2040. Seniors over age 85 utilize more long-term care, and by 2050 their numbers are expected to account for the largest percentage increase in the senior population.

The independent nonprofit foundation is dedicated to advancing the development of a sustainable continuum of quality care for seniors that integrates medical treatment and human services in the settings most appropriate to their needs and with the greatest likelihood of a healthy, independent life.

It was created through a contribution by SCAN Health Plan, a nonprofit Medicare Advantage organization based in Long Beach.

CMS requires bond from DME firms

The Centers for Medicare & Medicaid Services (CMS) has reported that it is requiring certain durable medical equipment (DME) suppliers to post a surety bond. It also is revoking billing privileges to a large number of Medicare suppliers in Miami-Dade County, Florida, as part of its broad fraud-prevention program.

"We know the majority of medical equipment suppliers and healthcare providers want to improve the health of Medicare beneficiaries, but we also know there are those who look for any opportunity to take advantage of beneficiaries and Medicare," said CMS Acting Administrator Kerry Weems. "The steps we are taking . . . provide us with additional oversight of the suppliers who furnish medical equipment to Medicare beneficiaries and those who provide home health services in South Florida."

CMS issued a final surety bond regulation, required by the Balanced Budget Act of 1997, that makes certain suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) post a $50,000 surety bond.

Existing suppliers must comply with this requirement by Oct. 2, 2009, while newly enrolling suppliers must meet the requirement by May 4.

CMS said this requirement was due in part to the large number of improper and potentially fraudulent payments to medical equipment suppliers for furnishing medical equipment and devices to people with Medicare. It said the 2007 Medicare error rate report found approximately $1 billion in improper payments for medical equipment and supplies.

The surety bond requirement is designed to limit the Medicare program risk from fraudulent equipment suppliers and help to ensure that only those suppliers who remain in the program furnish items to Medicare beneficiaries that are considered reasonable and necessary from legitimate DME suppliers.

Suppliers who have had certain adverse legal actions imposed against them in the past may also be required to post a higher bond amount. Some companies or organizations that supply these items are exempt from the surety bond requirement, including certain physicians and non-physician practitioners, physical and occupational therapists, state-licensed orthotic and prosthetic personnel, and government-owned suppliers.

As part of its fraud-prevention program, CMS has revoked billing privileges of 1,139 DMEPOS suppliers as part of the DMEPOS High-Risk Suppliers Demonstration. This project began in October 2007 and focuses on DMEPOS suppliers in South Florida and the Los Angeles metropolitan area.

These suppliers, who were paid a combined total of $265 million between calendar years 2005 and 2007, lost their billing privileges for not re-enrolling in the Medicare program and not meeting Medicare's supplier standards.