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Home Health & Hospice Week

Fraud & Abuse:

Suppliers Blast OIG For 'Unworkable' Telemarketing Fraud Alert

Published on Fri Jan 22, 2010

Feds show lack of understanding in interpretation, industry says.

You may have to change the whole way you do business if the feds stick by a new interpretation of telemarketing fraud for durable medical equipment.

In a special fraud alert published in the Jan. 14 Federal Register, the HHS Office of Inspector General warns suppliers that they should not contact a Medicare beneficiary by phone based solely on a physician's verbal or written order for durable medical equipment.

New twist: Suppliers can initially contact beneficiaries via phone only with express written consent, the OIG reminds suppliers in the alert that is based on an original 2003 alert. But the new part is the OIG's interpretation of consent: "A physician's preliminary written or verbal order is not a substitute for the requisite written consent of a Medicare beneficiary," the OIG insists.

Industry trade groups were immediately up in arms over the new interpretation. "The new policy announced in the fraud alert leaves virtually every Medicare-enrolled DME provider open to liability for false claims," says the American Association for Homecare in a release. "Requiring DME providers to have a beneficiary's written authorization before contacting the beneficiary to deliver DME ordered by his physician is ... impractical and unworkable."

The alert "will cause DME suppliers to break the law every time they call a patient to arrange for delivery of physician ordered DME services," stresses the National Association of Independent Medical Equipment Suppliers in a message to members. "The prohibition ... will cause every supplier who calls the patient based on his verbal/faxed [order] to violate this interpretation of the statute, despite that being the normal operating practice for DME."

"We ... contacted the OIG to express our shock and dismay for their lack of understanding of how HME is provided to patients," AAHomecare's Walt Gorski says.

"It seems clear that [the Centers for Medicare & Medicaid Services] and the OIG have no clue how the providers serving patients actually do business," notes NAIMES' Wayne Stanfield. The federal watchdog's interpretation is "overly strict."

"It is one thing for the federal government to be vigilant in making sure Medicare claims are properly paid," AAHomecare's Tyler Wilson says.

"It is another thing for federal DMEPOS officials to fail to grasp, time after time, how home medical equipment and related services are actually provided to Medicare beneficiaries."

How it works: Most HME items furnished in benes' homes result from a written or verbal order communicated initially by the physician to the HME provider, who then contacts the beneficiary to arrange for delivery of the item, AAHomecare explains. Telephone contact with a beneficiary based on a physician's order is different from the telemarketing activities that Congress prohibited, AHomecare argues. The law "was targeting a specific abusive marketing practice that was prevalent at the time, and which Congress believed increased Medicare spending for medically unnecessary medical equipment," the trade group says. "In contrast, longstanding Medicare policy recognizes and permits providers to dispense HME in response to a physician's verbal order for the item."

Plus: The new alert also reminds suppliers that they cannot hire an outside marketing firm to conduct prohibited telemarketing to beneficiaries.

Note: The special fraud alert is at http://oig.hhs.gov/fraud/fraudalerts.asp -- scroll down to the Jan. 13 entry.

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