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Taxpayers footing fraud bills Medicare, Medicaid programs in Mississippi taking a high-dollar hit

American taxpayers are footing the bill for billions of dollars in health-care fraud, which in Mississippi has included the delivery of artificial limbs to people who didn't need them.

Earlier this month, Dr. Cassandra Faye Thomas, owner of Central Mississippi Physical Medicine Inc., was arrested on charges of fraudulently billing the government for $16 million for in-home physical therapy services. She has pleaded innocent to conspiracy, health-care fraud, making false statements, theft of public money and wire fraud charges. "To the common man, that's a lot of money," said Assistant U.S. Attorney John Dowdy of Jackson. "To the taxpayer, that's a lot of money."

Since 2004, the Office of Inspector General for the U.S. Department of Health and Human Services along with the U.S. attorney's office in Jackson has uncovered pervasive health-care fraud in Mississippi, finding more than $60 million in fraud in physical therapy services alone. "The Office of Inspector General will continue to aggressively pursue those who defraud the Medicare and Medicaid programs," Lewis Morris, chief counsel to the inspector general, said in a statement. "Violations of the law will simply not be tolerated."

Medicare, a federal health insurance program for the elderly, reimburses for physical therapy performed by doctors or supervised by them. In 2007, that totalled $1.5 billion nationally. In April 2007, federal prosecutors sought help from the OIG's counsel to help prosecute these physical therapy fraud cases because resources were stretched thin from the pursuit of fraud cases related to Hurricane Katrina. Mississippi has seen six felony convictions in fraud cases involving physical therapy, and courts have ordered nearly $5.7 million in restitution. In each case, the clinics were accused of using unlicensed employees to practice physical therapy on patients whose claims were filed for reimbursement with Medicare. OIG officials say they're continuing to review physical therapy services in Mississippi and hope to pursue more prosecutions. The latest charge came against Thomas, who was originally charged in 2005. "There were some technical issues with that case that resulted in us doing further investigation," Dowdy said. "That indictment was ultimately dismissed." New charges now have been filed against Thomas, he said. She could not be reached for comment. In Mississippi, cases have gone beyond physical therapy as well.

Last week, U.S. District Judge Dan Jordan sentenced Nelson Wilson Jr., who operated BMW Prosthetics and Orthotics in Jackson, to 47 months in prison and ordered him to pay $441,305 in restitution after he pleaded guilty to Medicare fraud and fraudulently concealing assets from bankruptcy. According to court documents, the 54-year-old businessman concealed $100,000 in personal loans, an 8-acre farm in Ridgeland, a house, 17 pacer and quarter horses, jewelry and two ATVs - together valued at $202,500.

Assistant U.S. Attorney Jack Lacy told the judge Wilson would sometimes make artificial limbs for people who hadn't requested them or couldn't use them. In other cases, the prostheses weren't authorized by a doctor or fitted by qualified people. "Sometimes he would provide artificial limbs for people who didn't need them and leave them on the doorstep and the guy would say, 'What's this?' " Lacy said.

The feds aren't releasing the names of any of the victims because of the federal privacy act. Over a four-year period, Wilson billed Medicare for $15 million. Back in 2003, Wilson drew headlines for paying for the education of a Delta State University aviation student in exchange for the student agreeing to later fly the company's corporate planes. But Wilson's dream of a fleet of corporate planes vanished when his bankruptcy and conviction became a reality.

Medicare Issues Final Rule Requiring Surety Bonds for DMEPOS Suppliers and Takes Next Step in Fighting Home Health Fraud

CMS Strengthens Efforts to Fight Medicare Waste, Fraud and Abuse

(CMS Message 2008-12-29)

The Centers for Medicare & Medicaid Services (CMS) today announced it is requiring certain durable medical equipment suppliers to post a surety bond. In addition, CMS is announcing that it has revoked the billing privileges of more than 1,100 medical equipment suppliers in south Florida and southern California and suspending payments to home health agencies in the Miami-Dade, Fla. area.

"We know the majority of medical equipment suppliers and health care providers want to improve the health of Medicare beneficiaries, but we also know there are those who look for any opportunity to take advantage of beneficiaries and Medicare," said CMS Acting Administrator Kerry Weems. "The steps we are taking today provide us with additional oversight of the suppliers who furnish medical equipment to Medicare beneficiaries and those who provide home health services in South Florida."

CMS today issued a final surety bond regulation, required by the Balanced Budget Act of 1997, that makes certain suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) post a $50,000 surety bond.

Existing suppliers must comply with this requirement by Oct. 2, 2009 while newly enrolling suppliers must meet this requirement by May 4, 2009.

This requirement was due in part to the large number of improper and potentially fraudulent payments to medical equipment suppliers for furnishing medical equipment and devices to people with Medicare. The 2007 Medicare error rate report found approximately $1 billion in improper payments for medical equipment and supplies.

The surety bond requirement is designed to limit the Medicare program risk from fraudulent equipment suppliers and help to ensure that only those suppliers who remain in the program furnish items to Medicare beneficiaries that are considered reasonable and necessary from legitimate DME suppliers.

Suppliers who have had certain adverse legal actions imposed against them in the past may also be required to post a higher bond amount. All newly enrolling suppliers that meet the requirements of the rule will be required to have a surety bond before they can enroll in the Medicare program. More information about the new regulation can be found at http://www.cms.hhs.gov/MedicareProviderSupEnroll

While this regulation requires most suppliers to obtain a surety bond, some companies or organizations that supply these items are EXEMPT from the surety bond requirement, including certain physicians and non-physician practitioners, physical and occupational therapists, state-licensed orthotic and prosthetic personnel, and government-owned suppliers.

To prevent fraud, CMS has revoked billing privileges of 1,139 DMEPOS suppliers as part of the DMEPOS High-Risk Suppliers Demonstration. This project began in October 2007 and focuses on DMEPOS suppliers in South Florida and the Los Angeles metropolitan area. These suppliers, who were paid a combined total of $265 million between calendar years 2005 and 2007, lost their billing privileges for not re-enrolling in the Medicare program and not meeting Medicare's supplier standards.

CMS is continuing to fight waste, fraud and abuse by home health suppliers in the Dade County, Fla., area by suspending payments and taking other payment and review actions. On Oct. 6, CMS initiated efforts to address potential waste, fraud and abuse by suspending payments to 10 home health agencies and is continuing to review claims and payments to other agencies as resources allow.

In addition to suspending payment, CMS is:

• Implementing extensive pre- and post-payment review of claims submitted by ordering/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 number of home health services and the beneficiaries for whom they ordered those services; and
• Identifying and visiting high risk beneficiaries to ensure they are appropriately receiving the services for which Medicare is being billed.

O&P Accreditation Update

Orthotists, Prosthetists & Pedorthists are EXEMPT from the mandatory accreditation requirement. As are all “professionals,” i.e. physicians, podiatrists, therapists & O&P practitioners. 

Pharmacy, DME, etc…. still must meet the September 30, 2009 deadline.
Accreditation is not going away.  CMS will write new Quality Standards for “Professionals” by the end of 2009, then will set another mandatory accreditation deadline.

More info

Site visits reveal noncompliance with DMEPOS supplier standards

The Office of Inspector General's (OIG's) unannounced site visits to 905 suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) in Los Angeles County in late 2007 revealed that the suppliers failed to comply with several of the Medicare supplier standards, according to an OIG report issued last month. 

To determine the suppliers' compliance with Medicare standards, the OIG focused on two standards with which compliance could be verified quickly through direct observation. These standards include four specific requirements: 

* The supplier must maintain a physical facility.

* The facility must be accessible during business hours.

* The facility must have a visible sign.

* The supplier's hours of operation must be posted. 

Findings. Three percent of the suppliers (30 of 905) did not maintain appropriate physical facilities. Nine percent of the suppliers (85 of 905) were not open during posted or reasonable business hours on at least two site visits. Another nine percent of the suppliers were open but failed to post signs indicating a business name, hours of operation, or both. 

Fourteen percent of the suppliers met the requirements for the standards that the OIG reviewed, but more than half of the beneficiaries served by these suppliers did not receive other Medicare services from an ordering physician within a six-month period preceding the DMEPOS claim. 

In addition to performing site visits, the OIG analyzed the suppliers' Medicare billing patterns. In the 12 months beginning July 1, 2006, Medicare allowed approximately $245 million for DMEPOS provided in Los   Angeles County, $21 million of which was for suppliers that did not maintain physical facilities or were not open during the unannounced site visits.

 

Recommendations. The OIG recommended that CMS strengthen the DMEPOS supplier enrollment process and ensure that suppliers meet Medicare supplier standards. Specifically, the OIG recommended that CMS:

(1) conduct more unannounced site visits to suppliers;
(2) perform more rigorous background checks of high-risk suppliers;
(3) focus monitoring and enforcement on high-risk suppliers;
(4) increase prepayment review of DMEPOS claims;
(5) require suppliers in high-fraud areas to reenroll more frequently than every three years; and
(6) establish a minimum number of hours of operation and minimum inventory requirements for product and service types.

 

OIG Report, No. OEI09-07-00550, Feb. 1, 2008 Health Care Compliance Reporter p530,659.

Source

Jail Time for O&P Fraudulent Filers

From South Florida Business Journal

Nine get jail time for Medicare Fraud

The U.S. Department of Justice said the owners of several health care companies have been sentenced to prison terms in the past two weeks for filing a total of $56.6 million worth of fraudulent Medicare claims.

Centers for Medicare and Medicaid Services data shows that Miami-Dade County paid more in durable medical equipment claims than 44 other states, and that only some of the most populous states in the country -- including California, Texas, New York, Michigan and Ohio -- exceeded Miami-Dade's billings.

Also, an average Medicare patient in Miami-Dade County allegedly received $6,200 worth of DME every year, based on paid amounts, though patients throughout the rest of the U.S. average about $1,200 a year.

A task force set up in Miami to reduce fraud brought the cases against:

• Luis Soto, 41, who was sentenced to seven years, three months, for operating Ocean Medical Equipment and 10 other companies that billed Medicare $47 million for items such as oxygen concentrators, nebulizers and wheelchairs that were never provided.
• Noel Rodriguez, 50, who was sentenced to four years, three months, for operating of OxyCare of Miami and submitting more than $1.2 million in false claims for such items as hospital beds and pressure-reducing mattresses.
• Rosabel Gonzalez, 32, who was sentenced to two years, six months, for operating Genesis Associates Group and submitting $1.5 million in false claims, mostly power pressure-reducing mattresses and orthotics.
• Christian Vasquez, 22, who was sentenced to three years, five months, for being the nominal owner of Tamiami Medical Supply, which submitted $1.2 million in phony claims.
• Maria De La Serna, 55, who was sentenced to 19 months, for owning and operating Respiratory One Equipment, which billed Medicare for $345,000 in fraudulent claims.
• Ariel Betancourt, 35, who was sentenced to two years, for being the named owner of Lincoln Medical Supply, which submitted more than $480,000 in false claims.
• José Prieto, 58, who was sentenced to three years, five months, for operating Coral Way Medical, an HIV infusion clinic that billed $900,000 in fraudulent claims. Armando Jorge Herrera, 27, was sentenced to three years for the same operation.
• Reinaldo Lopez, 40, who was sentenced to three years, 10 months, for owning and operating Reny Medical Equipment, which submitted more than $450,000 in false claims for prosthetics and ostomy supplies.

CMS, Competitive Bidding and the 70 NEW AREAS

The Centers for Medicare & Medicaid Services on Tuesday announced the 70 new areas across the nation that will be part of the second phase of a competitive bidding program designed to help lower Medicare beneficiaries’ out-of-pocket costs and improve their access to certain high quality durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).

Ten areas currently participate in the program providing greater beneficiary access to certain DMEPOS, including standard and complex power wheelchairs, walkers, oxygen supplies and equipment, hospital beds and certain devices.

For the list, click here.

September 30, 2009 is D Day for Mandatory Accreditation

It's been announced.  The deadline for Orthotic & Prosthetic patient care providers.
If you need more information, contact Tom Derrick at ABC.  He is the Accreditation Guru.

From ABC's official press release:
Officials at the Centers for Medicare and Medicaid Services (CMS) today announced the long awaited mandatory accreditation deadline for all suppliers of Durable Medical Equipment and Prosthetic and Orthotic Supplies (DMEPOS). As of September 30, 2009, all suppliers of DMEPOS, including all O&P practices, pedorthic facilities, and mastectomy boutiques will have to be accredited by a CMS Deemed Accrediting Organization such as ABC.
READ MORE

ABC's accreditation programs are designed to be consultative in nature, affordable, and most importantly, to serve as an attestation of the high qualifications of an O&P patient care business to deliver care. To serve the various needs of O&P, pedorthic, post-mastectomy and other related businesses, ABC accreditation is available for the following disciplines...

Further Reading...

          For further information about accreditation, we suggest you take the time to read the following:          

• What You Should Know About Accreditation, by John Latsko, Esquire from The O&P Edge
• Accreditation as a Future Requirement for Private Insurance Companies, by ABC's Tom Derrick
• Accreditation: Another Hurdle Facing O&P, from The O&P Almanac

CMS Issues Competitve Bidding Final Rule

CMS Issues Competitive Bidding Final Rule

                               

By Mary Agnes Carey, CQ HealthBeat Associate Editor                               

The Centers for Medicare and Medicaid Services (CMS) late Monday issued a final rule for competitive bidding in Medicare for certain durable medical equipment, prosthetics, orthotics and supplies.               

In a news release, CMS noted that in 2008 the competitive bidding program will operate in competitive bidding areas within 10 of the largest Metropolitan Statistical Areas (MSAs), excluding the New York, Los Angeles and Chicago MSAs for logistical reasons.

The program will apply to 10 of the top durable medical equipment, prosthetics, orthotics and supplies, or DMEPOS, product categories outlined in the final rule.

The final rule will be published in the Federal Register on April 10. The 10 MSAs where competitive bidding will begin later this year are:

Charlotte-Gastonia-Concord, N.C.-S.C.
Cincinnati-Middletown, Ohio-Ky.-Ind.
Cleveland-Elyria-Mentor, Ohio
Dallas-Fort Worth-Arlington, Texas
Kansas City, Kan-Mo.
Miami-Fort Lauderdale-Miami Beach, Fla.
Riverside-San Bernadino-Ontario, Calif.
Orlando-Kissimmee, Fla.
Pittsburgh, Pa.
San Juan-Caguas-Guaynabo, Puerto Rico            

The program will be expanded into 70 additional MSAs in 2009 and after 2009 CMS will expand the program to additional areas and items, agency officials said.               

“The final rule we are announcing today is focused on improving both service delivery and the quality of care, while getting savings for beneficiaries and taxpayers,” CMS Acting Administrator Leslie V. Norwalk said in a statement.               

But some analysts said the new rule would force suppliers to close and hurt Medicare beneficiaries’ access to services.               

“There will be hundreds of small businesses in these 10 cities put of business next year — an election year — with two cities located in each of the key states of Ohio and Florida. Moreover, an untold number of Medicare beneficiaries who are on oxygen now may lose their access to home oxygen,” said Fred Graefe, a health care lobbyist whose clients include home medical equipment manufacturers and hospitals.               

The competitive bidding program was mandated by the Medicare prescription drug law (PL 108-173) and will replace current payment amounts for items being bid under Medicare’s DMEPOS fee schedule with payment rates derived from the bidding process. CMS said contracts would be awarded to enough bidders in each competitive bidding area to ensure access and service to high quality items.               

When fully implemented by 2010, the competitive bidding program will save Medicare $1 billion annually, CMS said.               

Durable medical equipment (DME) was picked first for competitive bidding because of the relatively small number of claims involved — 68 million in fiscal 2004. After gaining experience with DME claims bidding, the agency plans to extend it to hospital and doctor claims. (See related story, CQ HealthBeat, April 24, 2006).               

CMS is creating a limited exception to the competitive bidding requirement that will allow certain treating professionals — including physicians, physician assistants and occupational and physical therapists —to furnish items on the competitive bidding list to their own patients without having to participate in bidding and without becoming a contract supplier.               

CMS also said it has included several provisions to modify the rule’s impact on small suppliers, defined as those having gross revenue of $3.5 million or less annually. Those include a 30 percent target number for small supplier participation and allowing small suppliers to form networks to participate in the bidding process.   

The 10 product categories that will be subject to competitive bidding are:

·        Oxygen supplies and equipment;

·        Standard power wheelchairs, scooters, and related accessories;

·        Complex rehabilitative power wheelchairs and related accessories;

·        Mail-order diabetic supplies;

·        Enteral nutrients, equipment, and supplies;

·         Continuous positive airway pressure (CPAP) devices, respiratory assist devices (RADs), and related supplies and accessories;

·        Hospital beds and related accessories;

·        Negative pressure wound therapy (NPWT) pumps and related supplies and accessories;

·        Walkers and related accessories; and

·        Support surfaces (Group 2 and 3 mattresses and overlays - Miami and San Juan only)