A Medical Device Daily

Fraudulent billings have plagued the Medicare program for decades, and with the thousands of entities that bill the Centers for Medicare & Medicaid Services , the task of tracking them all is nearly Herculean. Thus it came as no surprise when the Secretary of the Department of Health & Human Services announced a new crackdown on fraudulent Medicare billing for durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) that will zero in on areas of high growth in two states, Florida and California.

In a joint effort with the U.S. Department of Justice (DOJ), HHS will roll out the Medicare Fraud Strike Force that will use investigators from federal, state and local jurisdictions to tamp down Medicare fraud.

The impetus behind this effort is a contract investigation conducted by the National Supplier Clearinghouse (Columbia, South Carolina), which last year visited nearly 1,500 suppliers operating in south Florida and resulting in the revocation of the licenses of more than 600 suppliers. The effort is said to have saved the Medicare program $317 million, at a cost of about $3 million, yielding a return-on-investment of more than 100 to 1.

Among the products that were the subjects of fraudulent charges were motorized wheelchairs — the subject of an earlier effort to combat fraud — artificial limbs and wound therapy treatments. The results of that investigation encouraged officials at HHS to ramp up efforts to bring suppliers in line in areas that have shown conspicuous levels of growth in billings.

A similar effort conducted in southern California reviewed the records of 2,000 suppliers and resulted in the revocation of licenses of 770 suppliers. The announcement noted that “like South Florida, Los Angeles has become a hotbed of fraudulent activity.”

The project will now require suppliers in these two areas to resubmit their applications for supplier status for DMEPOS equipment and supplies within 30 days of receiving a notice from CMS. Suppliers who fail to notify the agency of changes in ownership or address, will lose their billing privileges. Any suppliers who fail to inform the agency of any owners or management employees who have been convicted of felonies in the previous decade will also lose their billing privileges.

HHS Secretary Michael Leavitt said in a press release that eliminating fraudulent suppliers enhances the quality of care and that “this initiative is aimed at doing just that: stopping durable medical equipment fraud before it happens.”

Acting CMS administrator Leslie Norwalk stated that the concept “is straightforward and will be effective,” adding that the agency “hopes to expand this effort nationwide.”

According to CMS, the number of suppliers in Florida’s Miami-Dade County dropped slightly from 1,349 in 2002 to 1,245 in April 2007, but the volume of billings more than doubled, from roughly $470 million in 2002 to almost $995 million in April. Total billings in the Sunshine State during that same period rose from $2.4 billion to $2.7 billion. Miami-Dade also led the state in the number of revocations, accounting for 619 of the 743 total.

Over the past three months, the preliminary effort is said to have resulted in charges of fraud being filed against 56 individuals who collectively billed nearly $260 million in fraudulent charges.

Medicare beneficiaries can also get into the act via the Senior Medicare Patrol program, which is run by the Agency on Aging at HHS and offers a toll-free number to the HHS Office of Inspector General.

The effort has garnered the support of industry, with the American Association for Homecare (AAH; Arlington, Virginia), weighing in on the action.

Tyler Wilson, president/CEO of AAH, said that the projects are consistent with the types of front-end Medicare enforcement that the American Association for Homecare has advocated for years, such as more frequent site visits and accreditation.” Wilson also remarked that that nonetheless, “it’s important to carefully separate fraud and abuse issues from Medicare policy decisions governing home medical equipment, services, and therapies.”

AAH penned an open letter to Congress last month that appeared in the Capitol Hill newspaper Roll Call that stated that while AAH’s “call for tighter controls over the years has gone largely unheeded, we applaud the federal government’s recent efforts to crack down on Medicare fraud.” The letter also stated that “Medicare and its private contractors have failed to shoulder the proper responsibility to effectively exercise their already-existing authority to combat fraudulent activity.”

NY Senate passes lung cancer bill

The Senate of the State of New York recently passed a bill that will boost efforts to detect and treat lung cancer at its earliest stages for at-risk populations, and the move won the praise of the Lung Cancer Alliance (LCA; Washington), which hailed the move as “a benchmark to build upon in the days and months ahead,” according to Phyllis Goldstein, the co-chair of the New York chapter of LCA and a resident of the state capital of Albany.

S. 5369 won the unanimous approval of the New York Senate, which will fund a lung-detection research pilot program that will focus on early disease management as well as detection. Pam Hicks, the other co-chair of the state chapter of LCA, said that “we are losing too many lungs to late-stage diagnosis,” and thanked Sen. Betty Little (R,C,I-Queensbury) and Owen Johnson (R-Babylon) for steering the bill along.

“We are also grateful for Senate Majority Leader, Joe Bruno’s (R-Rensselaer) interest in and support of this bill, Hicks said.