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Former Medical Director Speaks Out About Medicare Fraud

LOUDON, Tenn., Feb. 11 /PRNewswire/ -- Dr. Doran Edwards is the former Medical Director of the Statistical Analysis Durable Medical Equipment Regional Carrier (SADMERC), the division of Medicare that oversaw durable medical equipment until August of 2008. He believes that Medicare is an outstanding program that truly can help reduce the cost of our nation's healthcare by preventing and or transferring medical expenses to the less costly home environment. Unfortunately, the prevalence of fraud in the Medicare system has been so great that SADMERC determined in some categories as much as 40% of the funds spent annually on durable medical equipment and prosthetic devices (DMEPOS) were paid directly to fraudulent suppliers. Some DMEPOS manufacturers have contributed to the problem by outsourcing production, reducing standards and lowering quality in order to maximize profits.

CMS is clearly addressing fraud with new provider accreditation requirements that go into effect this year, but the issue of abuse by companies who make and market defective equipment is not being dealt with as urgently as it is needed. In a few years there will be a 3 to 4 fold increase in Baby Boomers of Medicare age. Without definitive action, the Medicare Trust Fund could be depleted as early as 2012 or as late as 2020. If action is not taken now, we may not have the opportunity to realize the true potential of the unparalleled healthcare delivery system that Medicare represents.

Medicare can save billions in healthcare cost every year by closing coding loopholes that allow inferior and unregulated products to be sold as if they were approved "durable medical equipment". CMS contractors and law enforcement agencies need greater authority and the resources to crack down on deceptive marketing practices, adulterated products, false claims made by manufacturers and fraudulent suppliers. Unfortunately, Medicare's current product approval process rarely allows companies to be caught or penalized if they misrepresent their products.

Funding of fraud detection has always proven to be a good investment. Medicare's policies are based on belief in the basic honesty of suppliers and providers. That philosophy has been an easy target from its inception, but now the stakes are too high and the need too great to allow criminals and unscrupulous suppliers to bilk the system. Better coordination between CMS and the FDA will also enhance Medicare's ability to stop paying for products the FDA deems to be unsafe and a risk to patients (i.e. certain brands of electric heating pads). Presently there is no communication between CMS and the FDA regarding product safety issues.

Another solution is a robust HCPCS coding system which accurately defines products and services. Pricing, policies and coverage can be more precisely based on accurate coding. At present, a surprising number of codes for services and equipment are vague, making them prime targets for fraud and abuse. Frequently a code created for good quality FDA regulated equipment becomes filled with low quality goods. Unfortunately the problem is usually not caught until beneficiaries are harmed or auditors notice dramatic spikes in code utilization. Even then the abusive practice can be difficult to stop because the poorly defined code may technically allow the inferior products to use that code. All of this highlights the need for a combined approach with better policies, better code descriptions and strict enforcement on the front end of all Medicare approvals.

Doctor Edwards is a Medicare consultant assisting companies with all aspects of government relations including clinical and technical issues. He can be reached at Advanced Healthcare Consulting, 9353 Two Notch Rd., Suite B, Columbia, SC 29223. Ph 803.865.9225, E-mail

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Doran Edwards

SOURCE Advanced Healthcare Consulting
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