Medicare Compliance & Reimbursement

Plus: DME manufacturers and suppliers under scrutiny for partnerships.

The Centers for Medicare and Medicaid Services (CMS) should develop a new approach for allocating funds to the Medicare Integrity Program (MIP) to ensure the money goes toward the most effective activities, the Government Accountability Office (GAO) said in an Oct. 6 report.

Funding for each of the five MIP activities -- which look at payments to and activities of home health agencies and other health care providers -- has increased each year since 1997.

The GAO notes, however, the size of the increases varied by activity. CMS told the GAO that MIP funds historically have been allocated based on past funding levels, and the GAO found that CMS had no qualitative data by which to compare activities' effectiveness relative to funding.

Further, the GAO found that CMS had not assessed whether MIP funds were distributed adequately to MIP contractors for each of the five program areas -- audit, medical review, secondary payer, benefit integrity and provider education.

The GAO is calling on CMS to base future MIP funding allocations on the effectiveness of each of the five MIP activities, on contractors' workload and on Medicare program vulnerabilities.

The GAO's full report is available online at www.gao.gov/new.items/d06813.pdf.

OIG Squelches Manufacturer Partnerships

Durable medical equipment (DME) manufacturers must be wary of partnering too closely with suppliers, says the HHS Office of Inspector General (OIG) in a new advisory opinion.

A DME manufacturer whose identity was not disclosed planned to underwrite advertising and provide free consulting services for suppliers of its products, explains the OIG in an Oct. 10 advisory opinion (No. 6-16).

Such an arrangement poses substantial risk of generating disguised kickbacks for referrals for federally reimbursed products, the agency concludes.

The proposed arrangement clearly would constitute remuneration to DME suppliers, said the OIG in its report. That's because the suppliers are in the position to generate federal health care business for the wheelchair manufacturer who requested the advisory opinion, says the OIG.

The availability and value of the advertising assistance to suppliers would be determined in a way that considered volume and value of the suppliers' past and expected future purchases, the OIG says.

ombined, those elements raise substantial anti-kickback concerns.

The OIG notes that it could, in such a case, impose administrative penalties in connection with the program.

The advisory opinion is available at www.oig.hhs.gov/fraud/docs/advisoryopinions/2006/AdvOpn06-16A.pdf.
 
In Other News...

· It's not only fly-by-night doctors who face fraud charges. The government has charged Turan Itil, a former chairman of the World Health Organization who has written hundreds of scientific articles about Alzheimer's disease, with Medicare fraud. The feds say Itil falsely diagnosed Alzheimer's disease and received payments for unnecessary services. In one case, a patient had only high blood pressure, but Itil allegedly billed for "numerous tests" based on a false Alzheimer's diagnosis, according to the New York Times.

· Southern California physician Aziz Awad will have company in prison. A court found both Awad and his biller, Herman Thomas, guilty of defrauding Medicare and Medicaid. They allegedly billed Medicare $7 million for respiratory therapy services that weren't necessary, performed properly, or performed at all. Prosecutors said Awad and Thomas targeted mentally ill residents of board and care facilities and provided them with respiratory care services whether they needed them or not. Awad will serve 15 years in prison, and Thomas has yet to be sentenced, Lawfuel reports.