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Medicare Anti-Fraud Measures are Way Overdue, Says Durable Medical Equipment Industry

Statement by the American Association for Homecare

ARLINGTON, Va., Jan. 8 /PRNewswire-USNewswire/ -- The American Association for Homecare welcomes and supports efforts to crack down on Medicare fraud announced today in another of a series of press conferences held by the Centers for Medicare and Medicaid Services (CMS) on the same subject. The Association continues to work with federal agencies and Congress to prevent fraudulent activity in the durable medical equipment (DME) sector. At the same time, it's important to note that Medicare has failed to effectively exercise its already ample authority to combat fraud and abuse. It is time for CMS to shine a spotlight on its own processes with respect to its ability to ensure the integrity of Medicare.

Since the early 1990's, the durable medical equipment industry has been pushing Congress and Medicare to impose provider accreditation requirements for durable medical equipment suppliers. Accreditation is one time-tested way of distinguishing legitimate businesses from fraudulent entities. While it took Congress until 2003 to pass a law mandating accreditation, it wasn't until several weeks ago that Medicare actually indicated the date by which DME suppliers must be accredited--and that date is not until September 30, 2009. Moreover, in 2006, the American Association for Homecare recommended that CMS adopt quality standards for DME that were far more stringent than those the agency actually adopted in its final standards issued in November 2006.

The Association questions why it has taken Medicare so long to impose effective measures to prevent fraud.

Even before the Medicare program initiated new quality standards and accreditation requirements under the Medicare Modernization Act of 2003, the Medicare program was supposed to conduct an unannounced facility site visit before granting a Medicare supplier number to providers of durable medical equipment. The Medicare program also was supposed to conduct an unannounced site visit at least once every three years in order for the supplier to have its supplier number renewed.

A site visit is supposed to be more than a perfunctory glance at a company's operations. An inspector conducting a site visit has a number of requirements that he or she should be looking for such as verifying delivery slips and checking to make sure there is a complaint file. The inspector should also be looking at the suppliers' patient files. An inspector would be able to spot forgeries.

CMS has the ability, through its private contractors, to monitor utilization data from claims. A spike in utilization for a specific DME item should trigger closer examination. Unfortunately, Medicare does not seem to do this on a regular basis and when they do, it may be a long period of time after the initial aberrations are seen.

Several questions should be asked of Medicare officials:

-- What is Medicare's accountability in the program's inability to prevent bad actors from obtaining a Medicare supplier number and the program's inability to identify billing irregularities?

-- Why has Medicare failed to protect taxpayer dollars by enforcing its current mandates?

-- How many fraudulent suppliers have been caught in their first year or are turned away when applying for a supplier number in Medicare?

Medicare and its private sector contractors must do a better job of insisting on standards and other up-front controls that will deny illegitimate operators any chance of taking advantage of the Medicare program.

The American Association for Homecare has been at the forefront of efforts to prevent fraud, which is why the homecare industry supports accreditation, quality standards, and other measures to help stem illegal activity. Medicare has failed to enforce critical up-front controls that would curb the opportunity for fly-by-night operators to rip off Medicare.

The vast majority of homecare companies are owned and operated by law-abiding individuals. In many cases, these firms are family operations involving multiple generations, who are dedicated to providing the best possible therapies and medical equipment to treat and improve medical conditions for patients at fair prices. Homecare providers serve patients who suffer from a variety of conditions ranging from multiple sclerosis and congestive heart disease to chronic obstructive pulmonary disease (COPD).

U.S. Department of Health and Human Services Secretary Michael Leavitt has called for greater use of home- and community-based health care because "it's not only where people want to be served, but it's radically more efficient."

The durable medical equipment or homecare sector represents less than two percent of the total $400 billion-plus Medicare budget. DME is also the slowest growing sector: 2.3 percent DME spending growth from 2005 to 2006. Total Medicare spending grew 19 percent during that same period. Moreover, Americans overwhelmingly prefer home-based care nursing homes and other forms of institutional care.

The American Association for Homecare (AAHomecare) represents providers of durable medical equipment and related services and supplies as well as equipment manufacturers. AAHomecare members serve the medical needs of millions of Americans who require home oxygen equipment, wheelchairs and other mobility products, hospital beds, medical supplies, inhalation drug therapy, home infusion, and other medical equipment, therapies, services, and supplies delivered in the patient's home. AAHomecare's provider members operate more than 3,000 homecare locations in all 50 states. See

CONTACT: Michael Reinemer, 703-535-1881 or 703-966-9574 (cell); or Tilly Gambill, 703-535-1896;

SOURCE American Association for Homecare
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