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American Association for Homecare Applauds Efforts to Eliminate Fraud in Medicare

WASHINGTON, April 4, 2012 /PRNewswire-USNewswire/ -- The American Association for Homecare reports that most of its 13-point anti-fraud plan that it proposed to Congress early in 2009 has been adopted by Medicare or incorporated into legislation.  The Association continues to urge Congress and the Centers for Medicare and Medicaid Services (CMS) to take effective steps to root out waste, fraud, and abuse in Medicare and preserve patient access to cost-effective care, including home medical equipment and services (HME), or durable medical equipment.

Medicare spending for home medical equipment and services represents 1.4 percent of total Medicare spending and is growing less than one percent annually, according to CMS.

"As we have stated for many years, the home medical equipment and service sector has zero tolerance for illegal activity," said Tyler J. Wilson, president of the American Association for Homecare. "This is why we proposed to Congress early in 2009 an aggressive, comprehensive 13-point anti-fraud plan.  Most provisions of that plan have been incorporated into legislation and Medicare policy, and the reduction of fraud related to home medical equipment in recent years is a tangible demonstration of our commitment to stopping fraud and abuse in Medicare." 

"We were pleased that the HHS Office of Inspector General testified before Congress in June 2010 that criminals have shifted away from the durable medical equipment sector. We can be thankful that improved Medicare policies, better enforcement of existing laws, and support from our sector have had a positive impact."

Specific Anti-Fraud Measures Proposed by American Association for Homecare, and Status: 

The American Association for Homecare proposed the following 13 specific recommendations:

1.      Mandate Site Inspections for All New HME Providers. A July 2008 GAO report underscored the need for CMS to ensure that its contractors are conducting effective site inspections for all new applicants for a Medicare supplier number. 

Status: Under its final rule implementing provider screening requirements in Section 6401 of the Patient Protection and Affordable Care Act (ACA), CMS requires that the National Supplier Clearinghouse (NSC) conduct a site visit for all newly enrolling HME providers.

2.      Require Site Inspections for All HME Provider Renewals. All renewal applications should require an in-person visit by the National Supplier Clearinghouse.

Status: Under its final rule for Section 6401 of ACA, CMS requires that NSC conduct a site visit for all HME providers upon revalidation of enrollment, which occurs every three years.

3.      Improve Validation of New Homecare Providers. Additional validation of new providers should be included in a comprehensive and effective application process for obtaining a Medicare supplier number. 

Status: Under its final rule for Section 6401 of ACA, CMS set up three risk categories for providers. Newly enrolling HME providers are in the "high risk" category, which requires that they undergo additional screening, including fingerprinting and background checks.

4.      Require Two Additional Random, Unannounced Site Visits for All New Providers. Two unannounced site visits should be conducted by the NSC during the first year of operation for new HME providers.

Status: Currently, the NSC must conduct at least one site visit. Agencies that accredit HME providers serving Medicare beneficiaries also must conduct a site visit as a part of accreditation. 

5.      Require a Six-Month Trial Period for New Providers. The NSC should issue a provisional, non-permanent supplier number to new HME providers for a six-month trial period.  After six months of demonstrated compliance, the provider would receive a "regular" supplier number.

Status: H.R. 4872, the reconciliation bill passed along with ACA, contains a requirement in Sec. 1305 for a 90-day period of enhanced oversight for initial claims of HME providers. It requires a 90-day period to withhold payment and conduct enhanced oversight in cases where the HHS Secretary identifies a significant risk of fraud.

6.      Establish an Anti-Fraud Office at Medicare. CMS should establish an office with the sole mandate of coordinating detection and deterrence of fraud and improper payments across the Medicare and Medicaid programs. 

Status: In 2010, CMS created a new Center for Program Integrity, which serves as the focal point for fraud and abuse activities for national and state-level Medicare, Medicaid, and CHIP program integrity activities.

7.      Ensure Proper Federal Funding for Fraud Prevention. Increase federal funding to ensure that the NSC completes site inspection and other anti-fraud measures.

Status: Anti-fraud efforts by Medicare and the Department of Justice have dramatically expanded and accelerated.  Congress has granted increased funding for CMS program integrity activities many times over the past three years.

8.      Require Post-Payment Audit Reviews for All New Providers. Medicare's program safeguard contractors should conduct post-payment sample reviews for six months' worth of claims submitted to Medicare by new providers. 

Status: The Durable Medical Equipment Medicare Administrative Contractors (DME MACs) now conduct post-payment audits.

9.      Conduct Real-Time Claims Analysis and a Refocus on Audit Resources. Medicare must analyze billings of new and existing providers in real time to identify aberrant billing patterns more quickly.

Status: The Small Business Jobs Act of 2010, H.R. 5297, required CMS to implement a predictive modeling system similar to those used by credit card companies to track unusual billing patterns for Medicare claims. The CMS predictive modeling system went live on June 30, 2011, for all Medicare Part A and Part B claims.

10.  Ensure All Providers Are Qualified to Offer the Services They Bill. A cross-check system within Medicare databases should ensure that homecare providers are qualified and accredited for the specific equipment and services for which they are billing. 

Status:  CMS now has the ability to identify claims if the provider submitting the claim is not on file as qualified or accredited to provide the specific item or service.

11.  Establish Due Process Procedures for Suppliers. CMS should develop written due process procedures for the Medicare supplier number process, including issuance, denial and revocation of the Medicare supplier number.  The procedures must include, for example, an administrative appeals process and timelines.

12.  Increase Penalties and Fines for Fraud. Congress should establish more severe penalties for instances of buying or stealing beneficiaries' Medicare numbers or physicians' provider numbers that may be used to defraud the government.

Status: Sections 6402 and 6408 of ACA include additional penalties for fraud.

13.  Establish More Rigorous Quality Standards. Ensure that all accrediting bodies are applying the same set of rigorous standards and degree of inspection to their clients.

Status: AAHomecare has proposed specific quality standards for negative pressure wound therapy items provided under Medicare.

In recent years, the American Association for Homecare has endorsed anti-fraud legislation such as the Prevent Health Care Fraud Act of 2009 (S. 2128), and its companion bill in the House, H.R. 4222, which contained a number of key recommendations from AAHomecare's anti-fraud proposals including implementation of real-time data monitoring technologies to detect fraudulent claims, increasing site inspections to ensure that Medicare allows only legitimate providers to file claims, and a dedicated office at the federal government level to combat Medicare fraud. 

In 2011, the Association endorsed H.R. 3399, the Medicare and Medicaid Fighting Fraud and Abuse to Save Taxpayers' Dollars Act (FAST Act), which would establish a workable prior-authorization program for power wheelchairs.

The American Association for Homecare represents providers of home medical or durable medical equipment and services who serve the needs of millions of Americans who require prescribed oxygen therapy, wheelchairs, enteral feeding, and other medical equipment, services, and supplies at home. Visit

SOURCE American Association for Homecare
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