Federal Officials To Announce Nationwide Crackdown On Fraudulent Medicare Billing By Equipment Suppliers

Main Category: Litigation / Medical Malpractice
Also Included In: Medical Devices / Diagnostics
Article Date: 09 Jan 2008 - 5:00 PDT

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Federal officials on Tuesday are expected to announce a nationwide effort to combat fraudulent Medicare billing by medical equipment suppliers, the Los Angeles Times reports. CMS last year began requiring suppliers to renew their applications to the program every three years and to submit to more frequent inspections. Previously, suppliers usually were screened and inspected only once, when they applied to participate in Medicare. However, many suppliers continued to pose as legitimate businesses while billing Medicare for products that were never needed by beneficiaries or that were never delivered, according to the Times.

"It's relatively easy for people to present the façade of meeting all those (federal) standards," Medicare Director of Program Integrity Kimberly Brandt said, adding, "They know when the inspector is going to come, they know what he's looking for, so they can make it look like they meet all of those things."

As part of efforts to stop such fraud, HHS officials plan to require that medical equipment suppliers participating in Medicare be certified by one of 10 approved accrediting agencies. The accreditation process includes stricter background checks and more frequent inspections with short notice. If the investigation yields any suspicion of fraud, the supplier could be removed from the program. Suppliers also would have to set their prices through a competitive bidding process. The rules will take effect in 70 urban areas this spring, and federal officials previously announced that the rules will be imposed in an additional 10 cities.

According to acting CMS Administrator Kerry Weems, "This saves the government money; it saves the beneficiaries money, and they're assured of quality and access."

Some medical equipment suppliers criticized the rules as too strict and said they might stop participating in Medicare (Hennessy-Fiske, Los Angeles Times, 1/8).

Medicare To Revise Payments for Supplies Related to Diabetes
In related news, Medicare is "thinking of trimming its rolls" of companies that provide medical supplies for beneficiaries with diabetes and "changing the way it pays them," the Tennessean reports. In 2006, Medicare and beneficiaries spent $1.24 billion on supplies related to diabetes. According to the Tennessean, the current Medicare reimbursement system involves a "complicated formula to determine what the government pays for supplies and doesn't limit the number of suppliers," which has prompted the program in some cases to pay "more for supplies than some private insurance companies do."

Medicare this summer will test a revised reimbursement system in 10 large metropolitan areas in which the program will pay a "select group of suppliers a flat fee for each item," with suppliers required to "bid on Medicare's business," the Tennessean reports. Medicare later will expand the revised reimbursement system nationwide.

CMS spokesperson Ellen Griffith said, "Medicare should not be paying twice as much for something you could get elsewhere for half as much" (Ward, Tennessean, 1/7).

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