Home Health & Hospice Week

DMERCs accused of illegal post-pay review tactics.

After getting slapped with a lawsuit filed by The Scooter Store, the government has slapped back- and the entire durable medical equipment industry could feel the sting of reduced utilization rates if TSS is right about the motivation for the feds' action.

The U.S. Department of Justice April 29 filed a counterclaim in U.S. District Court for the Western District of Texas in San Antonio against the nation's largest provider of power mobility equipment. The government accuses TSS of making false statements and claims to Medicare and Medicaid in connection with reimbursement for motorized wheelchairs.

Filed on behalf of the Department of Health & Human Services, the counterclaim alleges that New Braunfels, TX-based TSS violated the federal False Claims Act and seeks treble damages.

"This lawsuit demonstrates our continued commitment to pursuing vigorously allegations of fraud and abuse in Medicare," says Peter Keisler, assistant attorney general for the DOJ's Civil Division.

The counterclaim comes in response to a lawsuit TSS filed in January against former HHS Secretary Tommy Thompson seeking payment for 101 power wheelchairs and scooters the company sold to Medicare beneficiaries (see HCW, Vol. XIV, No. 6). The suit says TSS was denied reimbursement for equipment delivered to patients after doctors prescribed the motorized wheelchairs and signed certificates of medical necessity.

The government takes a different view, however: TSS engaged in a mass marketing campaign to sell power scooters to Medicare beneficiaries by assuring them the program would pay for the scooters, the DOJ alleges. But TSS employees falsely told interested beneficiaries that Medicare would pay only for a more expensive power wheelchair, according to the counterclaim.

Though the dollar amount of damages has not yet been determined, TSS has billed Medicare for claims worth more than $400 million since 1997.

Feds Are Second-Guessing Docs, TSS Charges

The counterclaim did not take TSS officials by surprise - or cause them to back down from their position that the government is wrongfully denying claims for power mobility equipment.

"This procedural action was expected and was necessary for the government to retain its options," says TSS President Mike Pfister. "Unfortunately, this action ... indicates that some officials appear more interested in second-guessing the conclusions reached by doctors than they are in making sure that qualified Medicare beneficiaries have access to the medical equipment their doctors say they need."

TSS has hired a heavy-hitter to go to bat for it against the government: Marc Racicot, attorney with the Washington office of Bracewell & Giuliani, former governor of Montana and chair of President George Bush's recent re-election campaign. Racicot strongly criticized the government's action against TSS in a May 4 letter to Centers for Medicare & Medicaid Services Administrator Mark McClellan.

"His letters get read," Bracewell & Giuliani spokesperson Ricardo Reyes tells Eli.

Durable medical equipment regional carriers' post-pay review information collections are "burdensome and illegal," according to Racicot, who notes that suppliers cannot force physicians to turn over chart notes. Further, the DOJ counterclaims' allegations against the company are "baseless," he says.

"The barrage of punitive actions taken against TSS over the past two months lead inescapably to one conclusion: that the federal government is targeting TSS as a high-volume supplier of power mobility equipment in order to drive down utilization," states the letter.

"It is time to clarify the rules and regulations surrounding the power mobility benefit, stop the illegal collections of information, and end the senseless litigation," Racicot writes.

All power mobility providers should be concerned about the allegations the DOJ is making in this case, Eric Sokol of the Washington-based Power Mobility Coalition tells Eli. "It's the Medicare program that steers beneficiaries toward the higher cost wheelchairs, not the suppliers," he observes.

For example, beneficiaries who want a scooter have to demonstrate some upper arm dexterity and also need an occupational or physical therapist's evaluation beyond a physician's exam, Sokol notes. Furthermore, scooters generally don't operate as effectively as power chairs in private homes - an important consideration given the continuing in-home restriction on the power mobility benefit.