Home Health & Hospice Week

GAO criticizes standards compliance.

Suppliers can expect to undergo more thorough inspections from the National Supplier Clearinghouse--at least if the Centers for Medicare & Medicaid Services heeds the recommendations of an independent audit and the demands of a powerful U.S. senator.

NSC's efforts to verify compliance with the 21 supplier standards are inadequate due to weaknesses in state licensure checks and on-site inspections, according to a Government Accountability Office report released this month. Durable medical equipment providers too often are not meeting the requirement to maintain proof of delivery, and the NSC is not checking to see whether suppliers have a real source of inventory or proper state licenses, the GAO found.

The GAO examined DME claims data for 2003 and 2004 in Florida, Illinois, Louisiana and Texas, as well as information from the NSC supplier database, the report says.

As a result, "there will probably be more tightened up regulation of new DME suppliers and more site checking," attorney Gabriel Imperato of Broad & Cassel's Fort Lauderdale, FL office tells Eli.

Grassley Blasts CMS, Demands Action

In response to the GAO's findings, Senate Finance Committee Chair Charles Grassley (R-IA)--the lawmaker who requested the report--wrote a letter to Health & Human Services Secretary Michael Leavitt and CMS Administrator Mark McClellan on Oct. 12 calling for immediate action.

"Complacency by the watchdogs hurts both taxpayers and beneficiaries," Grassley said in a statement on the report. "Money is wasted or lost to fraud, and quality of care can be jeopardized when products and services come from con artists rather than qualified suppliers.

"In April 2004, Grassley held a Senate hearing on Medicare fraud involving power-operated vehicles at which CMS pledged to revise supplier standards to include quality measures. However, CMS allowed suppliers convicted of fraud or violating multiple standards to re-enroll in the Medicare program within an average of three months, the GAO found.

Responding to the GAO's findings, CMS noted that it has already begun conducting ad hoc inspections in areas of the country where fraud has been a problem. The agency will also consider requiring the NSC to routinely compare items requiring licensure for which suppliers bill against items suppliers say they'll provide on their enrollment forms.

Review Draft Quality Standards Now

Grassley presented CMS with a list of 10 questions to answer by Oct. 31. Noting that CMS reviewed less than 0.08 percent of suppliers' enrollment and re-enrollment applications in 2004, he asked CMS to describe its plans for strengthening the vetting process.

He also asked CMS to detail how it would enforce quality standards under the competitive bidding program and ensure standards for suppliers not in the program.

Take action: With Grassley shining the spotlight on supplier quality, now would be the time to take a close look at CMS' proposed quality standards, experts say.

"They're a good indication of what CMS will be looking for in the future," observes attorney Seth Lundy of Fulbright & Jaworski's Washington office. CMS released the standards, developed by Cambridge, MA-based Abt Associates, in September and will take comments on them through Nov. 28.

This would also be a good time for suppliers who haven't already pursued accreditation to do so, Lundy points out. 

Note: The GAO report (GAO-05-656) is online at www.gao.gov, Grassley's letter is at http://finance.senate.gov/press/Gpress/2005/prg101205.pdf and the draft quality standards are online at www.cms.hhs.gov/suppliers/dmepos.