CMS says it has launched new steps to identify and cut Medicare waste, fraud and abuse. Specifically, the agency says it will increase its oversight of medical equipment providers and home health agencies; work more closely with beneficiaries and providers; consolidate its fraud detection;  and launch a new national recovery audit contractor (RAC) program.

CMS will consolidate its efforts with new program integrity contractors that will look at billing trends and patterns across Medicare, and focus on companies and individuals whose billings for Medicare services are higher than the majority of providers and suppliers in the community.  

CMS also will work directly with beneficiaries to ensure they received the HME or home health services for which Medicare was billed, and that those items or services were medically necessary.  

In terms of regional enforcement, CMS will specifically target its anti-fraud efforts toward home health agencies in Florida and DMEPOS providers in Florida, California, Texas, Illinois, Michigan, North Carolina and New York. Those efforts will include:

• More stringent reviews of new DMEPOS providers’ applications including background checks to ensure that a principal, owner or managing owner has not been suspended by Medicare.
• Unannounced site visits to check that providers and home health agencies are actually in business.
• Implementing pre- and post-payment review of claims submitted by providers, home health agencies and ordering or referring physicians.
• Validating claims submitted by physicians who order a high number of certain items or services by sending follow-up letters to these physicians.
• Verifying the relationship between physicians who order a large volume of DME or supplies or home health visits and the beneficiaries for whom they ordered these services.
• Identifying and visiting high-risk beneficiaries to ensure they are appropriately receiving the items and services for which Medicare is being billed.  

For claims not reviewed before payment is made, CMS says it will implement further medical review of submitted DMEPOS claims by one of the new RACs. The RACs review paid claims for all Medicare Part A and B providers to ensure their claims meet Medicare statutory, regulatory and policy requirements and regulations. If an RAC finds that a claim was paid improperly, it will then request repayment from the provider if an overpayment was found or request that the provider is repaid if the claim was underpaid.

A list of the new RACs can be found at www.cms.hhs.gov/RAC.

More information the CMS RAC program can be downloaded at www.cms.hhs.gov/RAC/Downloads/RAC%20Expansion%20Schedule%20Web.pdf.

Industry Reaction

AAHomecare responded to CMS’s news by saying it supported CMS’s new efforts, but added even more must be done. The association reasserted that it has been urging Congress and CMS to put tougher, up-front controls and real-time HME claims monitoring in place.

The association recommended various anti-fraud measure that were incorporated into the Seniors and Taxpayers Obligation Protection (STOP) Act of 2008, S. 3164, which was introduced into the Senate on June 19. Specifically the association has lobbied for:

• Real-time monitoring of claims.
• Require the National Supplier Clearinghouse (NSC) to conduct an additional, unannounced site visit within the first six months of a new HME provider’s operation.
• Apply a Medicare surety bond requirement (authorized by Congress in 1997) to new HME providers, but exempting those that have achieved accreditation from organizations approved by the government. 

“It has been too easy for criminals, operating at the fringes, to obtain supplier numbers that allow them to participate in Medicare,” said AAHomecare President and CEO Tyler Wilson, in a prepared statement. “We recommend that the federal government improve its poor enforcement track record by stopping fraud at the front-end of the Medicare claims process.”

The association added that the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), passed by Congress in July, made clear the mandate that all HME providers be accredited by Sept. 30, 2009, thus closing a loophole that would have let non-accredited providers continue to provide services to Medicare beneficiaries.