Home Consumer New Federal Rule Targets Medical Equipment Often Subject To Fraud

New Federal Rule Targets Medical Equipment Often Subject To Fraud

Federal Rules changed for Medicare
Durable medical equipment, such as wheelchairs, are subject to the new rule from the Centers for Medicare and Medicaid Services. (Photo: USA TODAY Sports)

By Laura Ungar, USAToday, SouthFloridaReporter.com, Jan. 1, 2016 – A federal rule issued Tuesday requires prior authorization before Medicare will pay for certain wheelchairs, prosthetics, orthotics and other medical equipment — sources of Medicare fraudand improper payments for years.

The rule could save Medicare $10 million the first year, $200 million in five years and $580 million over a decade, says Aaron Albright, spokesman for the U.S. Centers for Medicare and Medicaid Services. He says the expected savings would come from reductions in fraud, waste, abuse, non-fraudulent improper payments and unnecessary use of so-called “durable medical equipment.”

And the new rule doesn’t create new documentation requirements for doctors, he says; it simply means documents must be submitted earlier in the claims payment process.

But some groups argue prior authorization can be cumbersome for medical providers and lead to delays for senior citizens and disabled people who need medical equipment quickly.

“We have some concerns to make sure access is not delayed for (Medicare) beneficiaries for sure,” says Kathy Holt, associate director of the Center for Medicare Advocacy, a law firm working for access to Medicare. Some patients may need certain types of wheelchairs just to get out of bed, she says, and delays in getting such items “could create quality-of-life issues for people.”

Medicare spent about $6.3 billion on durable medical equipment in 2014, down from $7.4 billion the previous year, according to the Medicare Payment Advisory Commission, or MedPAC.

CMS officials say the new rule grew out of longstanding concerns about improper payments for such equipment. Reports by the U.S. Department of Health and Human Services’ Office of the Inspector General and the U.S. Government Accountability Office question billing practices of suppliers, inappropriate payments and unnecessary use of these items. CMS officials say they responded to these reports with a competitive bidding program and greater screening of suppliers.

The government also launched large-scale stings. In 2011, federal investigators charged 91 people in eight cities with attempting to bilk Medicare out of $295 million. The cases included two people in Houston charged with $62 million in false billings for home health care and durable medical equipment.

But despite the crackdowns, the problems have persisted. An October report by the non-profit Council for Medicare Integrity found that billing for durable medical equipment “has consistently had an incredibly high rate of billing errors, frequently billed incorrectly at a higher rate, causing an overpayment.”

In the 2014 fiscal year, the report said, the error rate among durable medical equipment billing was 53.1%, which accounted for $5 billion in improper payments that year.

Holt points out that not all documentation problems reflect fraud, however; some are perfectly innocent. For example, she says, documents might get sent back to a doctor because a date isn’t legible. “You have to dot every ‘i’ and cross every ‘t,’” she says.

Wanda Moebius, a spokeswoman for AdvaMed, the Advanced Medical Technology Association, says her organization plans to monitor how CMS implements its new rule over the coming months “to ensure that Medicare beneficiary access to needed care is not compromised …”

AdvaMed supports the goal of reducing improper Medicare payments, wrote Don May, its executive vice president for health care delivery policy, in a letter to CMS. But “Prior authorization programs by their very nature question the medical expertise and judgment of the treating physician …” he wrote. “They remove the decision-making process about appropriate care from patients and their physicians and turn it over to administrators who have no firsthand experience with the patient’s condition.”