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Durable Medical Equipment Community Supports Tough Anti-Fraud Measures, Corrects Persistent Myths
Date:9/22/2010

only account for 28 percent of the Medicare payment rate.  The remaining 72 percent is related to service and general and administrative costs.

Payment Rates that Differ from Internet Pricing Do Not Promote Fraud

Criminals out to defraud the Medicare program are intent on stealing.  They do not provide equipment and services and they do not follow Medicare rules and regulations.  However, recently, the OIG stated that because home medical equipment reimbursement rates are often higher than pricing for HME available on the Internet, it inherently leads to fraud and abuse.  The OIG reasons that excess revenues attract criminals who intend to defraud the Medicare program and can be used to promote kick-back arrangements.  This is an unsubstantiated assumption.  AAHomecare is not aware of any federal study conducted by the OIG or the GAO that demonstrates that excessive payment promotes fraud.  The real point is that criminals intent on defrauding Medicare are not suppliers and have no intention of providing items and services to Medicare beneficiaries regardless of the payment rate.

There Is Not an Excessive Number of HME Providers

Federal officials frequently point to the need to reduce the number of suppliers that participate with the Medicare program.  What is overlooked is that there are only approximately 15,000 home medical equipment providers nationwide—or about one for every 2,500 Medicare beneficiaries. Even CMS cites the statistic that only 20 percent of suppliers in the round one areas of competitive bidding bill more than $10,000 to the Medicare program annually.  The vast majority of entities that have supplier numbers are pharmacies like CVS or Rite Aid, physical therapists, physicians, ophthalmologists, prosthetists, neurosurgeons, dentists, and other similar providers.  Moreover, some policymakers have stated that the DMEPOS fee schedule is outdated.  
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SOURCE American Association for Homecare
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