A Medical Device Daily

Life after death is typically discussed as a religious or metaphysical matter, but those engaged in fraud of the Medicare program seem able to bring doctors back to life, more or less.

According to a recent congressional investigation, nearly $100 million in claims have been submitted to the Centers for Medicare & Medicaid Services for durable medical equipment, prescription drugs and other items since 2000 with the use of the personal identity numbers (PINs) of deceased physicians. The scheme is similar to a problem that cropped up at the end of the 1990s when claims were made using the PINs of physicians who had left their practices, but for the most part were still alive.

The problem also focuses yet more attention on the durable medical equipment (DME) program at CMS, given that most of the fraudulent claims were made for DME.

Congressional investigators have identified more than 478,000 claims made in the names of roughly 17,000 physicians since the beginning of the decade. A statement released for yesterday's hearing by Sen. Carl Levin (D-Michigan), the chairman of the Permanent Subcommittee on Investigations (Senate Committee on Homeland Security and Government Affairs), indicates that "nearly half a million payments, totaling about $76 million, went to medical equipment suppliers that had submitted claims using the identification numbers of 17,000 deceased doctors."

Levin also charged that the names of physicians who had passed away "even ten years earlier, were listed on Medicare claims."

At the beginning of the decade, CMS obtained an updated list of physicians who were still in practice and required that its contractors reject any claims with inactive or invalid PIN numbers. CMS recently rolled out completely new provider identification numbers, to the objections of some providers (Medical Device Daily, June 2, 2008), but providers were not forced to use the new number until late May.

The announcement comes on the heels of the GAO report that a number of Medicare providers are in arrears on unpaid tax liabilities (Medical Device Daily, June 25, 2008), and shines a brighter light on the difficulty of tracking the one billion Medicare claims filed each year.

In a statement prepared for the hearing, CMS's deputy administrator Herb Kuhn said CMS reduced the rate of erroneous payments from 5.2% in fiscal 2005 to 3.9% two years later. Kuhn also said the agency's contractors are instructed "to research, update, correct and where necessary, deactivate personal identification numbers (PINs) with invalid addresses and/or no claims activity for one year" and to obtain data every other week from the American Medical Association (Washington) on physicians' dates of death.

Kuhn also said that beginning in October 2006, the agency "initiated a systematic deactivation of PINs where there has been no claims activity for 12 consecutive months," leading to the deactivation of 1.5 million PINs. Any claim filed after that year would force the provider to update their Medicare enrollment prior to reimbursement.

Leavitt not finished on DME bidding

With scant months left until January 2009, the executive branch has little time to complete certain projects, and a recent op-ed in the Wall Street Journal makes clear that the Department of Health and Human Services is the focus of much of those ambitions.

HHS secretary Mike Leavitt said in the opinion piece that Congress will decide this week "if it is serious or not about reining in entitlement spending," citing what he described as "insane rental prices for medical equipment prices far higher than it would cost to purchase the equipment outright."

Leavitt said that a type of oxygen concentrator used by some Medicare beneficiaries "costs about $600 on the open market," but that when Medicare beneficiaries rent the machines, they're stuck with a rental contract that runs 36 months at $198.40 a month, which comes to $7,142. The government's share is a similar amount.

"Even allowing for the costs of setting up equipment, training and fitting the beneficiary, and other things, the rental fee is way out of line," Leavitt said. He noted that competitive bidding brought the price "on average 26% below" the price of $600, but stated that "those who benefit from excessive fees in the current system are now in lobbying overdrive." He said that "killing this competitive-bidding program would cost taxpayers about $1 billion annually, while unjustly overcharging senior citizens."

"If Congress fails to uphold even this modest effort at entitlement reform, there is little reason to believe its members will muster the political courage for the unspeakably harder choices that await them," Leavitt said.

GOP, Dems still at odds on Medicare bill

At press time yesterday, the two parties were still at loggerheads on the Medicare financing bill, with Democrats daring Republicans to refuse to vote for a bill that would restore the 10.6% cuts to doctors under Part B, partly financed by cuts to Medicare Advantage plans, which are very popular with the 10 million or so enrollees.

Senate Democrats were looking for one more vote to invoke cloture and bring their bill, S. 6331 to an up-or-down, and the GOP's candidate for the White House, John McCain (Arizona) has been fingered as a person of interest in this situation.

John Cornyn (R-Texas) is said to have lost support from his state's medical association political action committee over his nay vote, but is said to have offered an alternative. However, Senate majority leader Harry Reid (D-Nevada) has stated flatly that no amendments will be allowed.

Reid, however, could get the additional votes from at least one other GOP senator, Pennsylvania's Arlen Specter who said he would support the bill, but only under the condition that Reid allows amendments.