Judge Criticizes DMERC for Not Catching Fraud Earlier
MIAMI--A U.S. district judge rebuked a Medicare contractor last week for paying out $122 million for prosthetic limbs over a four-month period in South Florida.

Palmetto GBA, which handles Region C claims, paid for 21,000 artificial legs and arms in the Miami-Dade County area last year, a number that shouldn't have escaped Palmetto's notice, according to U.S. District Judge Cecilia M. Altonaga. "Common sense dictates this is an impossibility," she wrote in a May 10 decision, the Miami Herald reported.

Federal prosecutors have yet to file criminal charges, but have filed a civil suit against 48 suppliers and a billing agency for allegedly submitting false Medicare claims. Columbia, S.C.-based Palmetto GBA was not included in the lawsuit, but Altonaga had sharp words for the DMERC: "It is unclear why Palmetto GBA is not a subject of the government's investigation into criminal wrongdoing."

According to the Herald, billings for artificial limbs rose from $2,000 to more than $200,000 a month, and critics say the sharp increase should have raised red flags.

But spokeswoman Elizabeth Hammond said that catching the behavior at four months was early. "In addition to identifying this issue and actively supporting law enforcement investigation of this case, Palmetto GBA's scrutiny of orthotics and prosthetic billing in South Florida has resulted in hundreds of millions in program savings," she told HomeCare Monday.

Another problem is that the government does not fund or require Medicare contractors to perform pre-certification like private insurance does, Hammond said. Instead, Medicare relies on post-payment data analysis to spot payment trends. "Palmetto GBA does not have the authority to suspend payments without CMS permission," she said. "To obtain that permission, Palmetto has to gather data based on billings records for claims that are already paid."

Jeffrey Baird, a health attorney with Brown & Fortunato, Amarillo, Texas, also noted that it takes time for Medicare contractors to notice unusual billing patterns. "Any time you have a group of individuals or a company intent on gaming the system or intent on committing fraud, there's going to be some lag time before the DMERC catches on," he said.

"In a perfect world, Palmetto should have caught the fraud instantaneously, but if it took four to five months to catch on to the act, that's pretty quick," said Baird, who added that it typically takes a year to detect Medicare scams.

Funding is also an issue, according to Hammond--Palmetto GBA is only funded to review records on about 0.6 percent of claims that the company handles. Furthermore, she said the claims processor receives about one percent of benefit payments, much less than private insurance companies. Palmetto handles about 40 percent of all Medicare claims for DME in the country, according to Hammond, handling 28.1 million Medicare claims in the Southeast in 2004.

While better payment from CMS could help Palmetto put more people out in the field to investigate and uncover wrongdoing more quickly, Baird said, "it's still not going to allow Palmetto to discover fraud instantly."

Industry Leaders Ask CMS to Clarify Mobility NCD
WASHINGTON--Industry leaders are pushing CMS to clarify Medicare's newly released mobility coverage policy.

The Restore Access to Mobility Partnership has asked CMS to issue interim guidance on the National Coverage Determination as soon as possible so HME stakeholders "can eliminate the possibility that severe problems could result from the new coverage policy during the transitional period before companion regulations are released.

"CMS' intentions are unclear with respect to the impact of mobility limitation on completing the activities of daily living," according to a statement from RAMP, a coalition that includes AAHomecare, Invacare Corp., The Med Group, Mobility Products Unlimited, Pride Mobility and Sunrise Medical.

The National Coalition for Assistive and Rehab Technology also said there are numerous areas of the NCD that are "vague and open to interpretation."

In a recent statement, NCART said that "CMS will allow coverage of [mobility-assistive equipment] where a caregiver is compensatory 'if consistently available in the beneficiary's home....' There are multiple problems with these criteria, particularly for prescribing wheelchairs. What is meant by 'consistent'? Who determines consistency? What sort of recordkeeping will be required? Moreover, who determines when a beneficiary is noncompliant with treatment and therefore does not qualify for MAE?"

The new mobility coverage policy, released May 5, eliminates the requirement that Medicare beneficiaries be bed- or chair-confined and instead adopts function-based criteria for determining medical necessity. However, the policy kept in place the in-the-home requirement, language that RAMP, NCART and other advocacy organizations are seeking to eliminate.

The organizations are also pushing to expand the definition of "activities of daily living"--which the government defines as activities such as eating, grooming, bathing and toileting--to include mobility itself.

To read the NCD, click here.

Medicare Opens Up O&P Coding Determination
BALTIMORE--Medicare posted more than 45 preliminary decisions answering requests for a host of targeted orthotics and prosthetics HCPCS codes on Wednesday. The agency also set a public meeting covering all of the requests for early next month.

"This is the first time we've had public involvement in the process," said Joe McTernan, assistant director of reimbursement services for the American Orthotics and Prosthetics Association. "This represents a much more open process. I was surprised; this wasn't something you'd see in the past."

O&P suppliers have faced a coding conundrum strikingly similar to problems in the mobility sector: the L codes for these products haven't reflected the latest technologies, leading--at least in part--to increased fraud and abuse from some "stock-and-bill providers that have used existing coding to bill beyond what's appropriate," said Pat Schelf, vice president of marketing and general manager of Ortho Rehab, a division of Otto Bock, Minneapolis.

So over the past several years, CMS has tweaked the codes to match available technology, starting with back bracing products in 2003. "The existing [new] codes have more anatomically-based descriptors," McTernan explained.

CMS announced plans to open up its coding application process for all DMEPOS following instructions from the agency's Council on Technology and Innovation, created by the Medicare Modernization Act, and recommendations from various industry groups. Those groups include the Coalitions of Wound Care, Respiratory Care and Seating and Positioning Manufacturers. Marcia Nusgart, the coalitions' executive director, said she had met with government officials over the coding issue for four years before CMS announced it would reform its HCPCS assignment process last November. The agency expects to implement further changes, including an appeals process, for the 2007 coding cycle.

"This is a giant step," Nusgart said last year in response to the announcement. The changes are "going to make the process a lot more understandable as well as transparent. We are very pleased that CMS responded to many of our recommendations."

The public meeting on the O&P code proposals will occur June 8 and 9 at CMS headquarters in Baltimore, and final coding changes will become effective Jan. 1. For more information, visit the CMS coding home page by clicking here.

CMS to Begin NPI Application Process
BALTIMORE--CMS will begin accepting applications for National Provider Identifiers--a new numbering system that will replace all current identifiers for health care providers--on May 23.

All providers affected by the Health Insurance Portability and Accountability Act must obtain an NPI, one of several administrative simplification provisions mandated under the law. The compliance date is May 23, 2007, and the following year for small health plans.

Applications will be accepted via a secure Web-based system at https://nppes.cms.hhs.gov beginning May 23 this year. Paper applications will be available on July 1.

For more information on the NPI, click here.

To revisit this news any time during the week, go to http://www.homecaremonday.com.

Newsmakers
Mountain View, Calif.-based Aerogen has appointed Richard Daly to its board directors. Previously, Daly was CEO of Visible Genetics and before that was CEO of Clinical Partners. He also held a variety of positions at Baxter Laboratories, including president of Baxter Canada and president of the Baxter Health Data Institute.

Kevin J. Gould has been promoted to COO of Mansfield, Mass.-based Tyco Healthcare. Gould will retain his current responsibilities as a group president of Tyco Healthcare North America, a position he has held since 1998. He will also assume operational responsibility for the segment's pharmaceutical and international divisions, as well as quality assurance, regulatory affairs and manufacturing functions.

Jeri L. Lose has been appointed executive vice president, chief information officer, for Lake Forest, Calif.-based Apria Healthcare. In her new position, Lose will oversee Apria's overall information technology initiatives, including enhancing the company's operating systems, re-engineering business processes, deploying new technology solutions and formalizing the company's project management function. Lose, a current board member, will resign from Apria's board of directors before she begins her new position in mid-June.

Palm City, Fla.-based Connectyx Technologies has announced that Angela Miller, president of Medical Auditing Solutions, has accepted a seat on its board of advisers. Miller has an extensive background in the compliance and operations arenas.

In Brief
A study by AARP indicates that most adults want to remain in their homes. In a survey of more than 1,000 people over the age of 50, 74 percent said they strongly agreed with the statement, "What I'd really like to do is stay in my current residence for as long as possible." The percentage increased in the older age groups, with 86 percent of those 75 and older strongly agreeing with the statement. The study, Beyond 50.05, A Report to the Nation on Livable Communities, also recommends the funding of home care and other community-based services. To read the full report, click here.

If all caregivers were paid for their time, the value of their work would be worth about $257 billion annually. That's according to a new report from the National Alliance for Caregiving. The study counts 44.4 million people as caregivers--those who provide unpaid care to another adult. Fifty-nine percent of these caregivers either work, or have worked, while providing care, and 62 percent made adjustments to their work life by taking time away or leaving their jobs entirely. For more information on the study, titled Caregiving in the U.S., visit www.caregiving.org.

CMS has asked for detailed comments on draft guidance about how it conducts the National Coverage Determination process, which determines what products Medicare will and won't cover. At a May 9 Open Door Forum, CMS Acting Chief Medical Director Barry Straube and CMS Coverage Analysis Group Director Steve Phurrough told attendees they were looking for detailed comments and criticisms of the process. To view the agency's draft guidance on the NCD, visit the CMS Web site by clicking here.

Coming Up
CMS will hold its next Home Health, Hospice & DME Open Door Forum May 25 at 2 p.m. EST in Washington, D.C. To participate by phone, call (800) 837-1935 and reference ID 2865522.

The VGM Group will hold its Heartland Conference 2005 May 31-June 3 in Waterloo, Iowa. The fourth-annual conference for members features seminars on topics including reimbursement, accreditation and compliance presented by industry experts. For more information, call (800) 642-6065, or visit www.heartland2005.com.

The American Association for Homecare will hold its Washington Leadership Conference June 7-10 in Washington, D.C. Highlights include speakers Rep. Mike Ross--the only home care provider in Congress--and former CMS Administrator Tom Scully, as well as a day on the hill to meet with Congressional officials. For more information, call (703) 836-6263 or visit www.aahomecare.org.