Home Health & Hospice Week

Extensive medical review of DME claims will mean extra work for suppliers all across the nation, and some won't survive the burden.

The Centers for Medicare & Medicaid Services has announced a crackdown on durable medical equipment and home health agency fraud (see related story, p. 282). CMS will step up onsite supplier visits, medical review, and beneficiary visits in seven states: Florida, California, Texas, Illinois, Michigan, North Carolina, and New York.

And don't breathe a sigh of relief if you're not in one of those states. All four DME Medicare Administrative Contractors (DME MACs) will be conducting more review of supplier claims throughout the country, predicts attorney Seth Lundy with King & Spalding in Washington, D.C. The same goes for onsite visits.

But review will be especially intense in those seven states, Lundy says. "There will be consequences for even the most upstanding suppliers," Lundy tells Eli.

New review: There also will be a new layer of review from one of the recently established Recov-ery Audit Contractors. CMS "is implementing further medical review of submitted DMEPOS claims by one of the new RACs," the agency says in a release.

Hospitals and physicians who underwent RAC review in a demonstration project blasted the contractors as bounty hunters who receive financial rewards for claims denials.

The fraud that has plagued the DME program is largely due to CMS's lack of oversight, particularly with the enrollment process, accuses Eric Sokol of the Power Mobility Coalition. The industry is now paying the price for that lapse in terms of reduced payment levels and crackdowns like this one, he says.

Hidden agenda: The unspoken goal of this crackdown and other DME enforcement actions underway is to reduce the number of suppliers participating in the Medicare program, Lundy believes. That reduction would make the program easier for CMS and its contractors to manage and safeguard.

And the crackdown is likely to succeed in that goal, Lundy expects. Some suppliers just won't have the financial wherewithal to withstand extensive medical review and other enforcement activities.

In questionable situations, "CMS will turn off the supplier number and ask questions later," Lundy notes. That will be very costly for suppliers to reverse.

"CMS doesn't work with a scalpel, it's a sledgehammer," Sokol observes.

Another factor: A floundering economy won't help, Sokol adds. Patients' inability to secure credit to pay privately for items like wheelchairs will be a double whammy on top of the federal scrutiny.

Suppliers shouldn't be surprised to see these extreme measures, Lundy says. A string of recent government reports has painted the industry in a bad light.

And suppliers haven't helped matters by responding poorly to requests for medical review in some cases. When there are only a few claims at stake, suppliers often find it cheaper to just take the claims recoupments or denials rather than go through the expensive process of securing medical necessity documentation from difficult-to-work-with physicians, Lundy relates.

This type of behavior results in skewed data that makes DME billing appear fraudulent or abusive, Lundy laments.