Home Health & Hospice Week

Warning: Your business partner could be who you least expect.

Durable medical equipment suppliers that take pains to abide by Medicare regulations may have already averted a disaster - and not even known it.
 
Here's why: The Federal Bureau of Investigations and the HHS Office of Inspector General are busy fronting as legitimate trading partners to gauge your compliance. A wide-ranging probe of the enteral nutrition industry is forcing one company to cough up more than $7 million to settle related charges.
 
McKesson Corp. unit TBC Products Inc., which distributes enteral therapy products to skilled nursing facilities, was one of several entities to get snagged by "Southern Medical Distributors" - a supplier manned by undercover federal agents. TBC allegedly provided enteral nutrition infusion pumps to Southern for free in return for the supplier's agreement to buy related products.
 
Prosecutors say TBC supplied Southern with fabricated pump rental fee invoices and credit memos, advising the undercover supplier to present the invoices in the event of a Medicare audit.
 
After pleading guilty to obstructing a federal audit, TBC now must pay $4 million in criminal fines. And under the terms of a separate civil settlement, TBC will be permanently excluded from Medicare and Medicaid.
 
The civil settlement, which resolves related false claim allegations, will also bleed parent McKesson out of $3.4 million.
 
"These sales tactics are frequently used as a cover to obstruct Medicare's ability to discover bribes and kickbacks," said U.S. Attorney Ronald Tenpas. "Such arrangements ... prevent Medicare from monitoring the actual costs of durable medical equipment."
 
The settlement is small potatoes compared to the first settlement announced from the enteral products probe, dubbed "Operation Headwaters." In the summer of 2003, Abbot Laboratories agreed to pay a whopping $600 million to settle charges against its sales and marketing practices for the items (see Eli's HCW, Vol. XII, No. 27, p. 213).