AAHomecare Pushes to Let Seniors Retain DME Rental Option
ALEXANDRIA,Va.--The American Association for Homecare is stepping up efforts to preserve the right for Medicare beneficiaries to choose to rent equipment in the capped rental category.

A Senate provision in the nation's 2006 budget reconciliation bill requires transfer of title to Medicare patients for certain DME items after a 13-month rental. AAHomecare said it is working hurriedly to point out to members of Congress that the provision "eliminates the beneficiary's choice to continue renting medical equipment in the capped rental category and places an unfair burden on these seniors."

While Senate leaders included the proposal as a way to save $900 million in Medicare/Medicaid spending, the association explained that:

--DME providers are currently required to notify patients about the option to rent or purchase durable medical equipment in the capped rental category, but the vast majority of Medicare beneficiaries prefers the rental option;
--if the medical equipment is purchased, the Medicare patient incurs additional fees for emergency support or to exchange malfunctioning equipment;
--it is neither safe nor fair to shift the burden of maintenance and repair for medical equipment to the Medicare patient; and
--reimbursement cuts for the majority of capped rental DME items have already occurred under the FEHBP-based cuts that took effect at the beginning of 2005.

If budget negotiators can't work out differences between the Senate and House of Representatives' version of the budget bill--which includes no capped rental provision--before the Christmas break, they will renew discussion when Congress returns in late January.

Oleck Named New Region C Medical Director
BALTIMORE--DMERC Region B Medical Director Dr. Adrian Oleck is relocating to Region C in March, a CMS spokeswoman has confirmed.

The announcement comes as CMS prepares to transition from Durable Medical Equipment Regional Carriers into a new DME Medicare Adminstrative Contractor (MAC) system.

Instead of a single contractor handling all claims processing for a region, the functions of each of the four DME regions will be split under the new system: Program safeguard contractors (PSCs) will be responsible for benefit integrity, medical review and medical policy, and affiliated contractors (ACs) will be responsible for claims processing.

The model is similar to one already used in DMERC Region A, which splits its workload between two contractors--PSC HealthNow New York and AC Tricenturion. The MMA mandated that CMS put all fee-for-service claims processing business up for bid.

TrustSolutions won the bid to become Region C's PSC in November, and according to CMS, intends to hire Oleck as its new medical director beginning March 1. Oleck could not be reached for comment.

Last month, Dr. Mark Pilley was named medical director of Region D, with PSC duties for that region to be handled by EDS and subcontractor IntegriGuard. TriCenturion will be the PSC for regions A and B, with Dr. Paul Hughes to serve as medical director over both regions.

CMS is expected to award AC contracts by the end of the month. The new DME MAC transition is expected to be completed by July 1.

For more information on MACs, visit www.cms.hhs.gov/medicarereform/contractingreform.

OIG Says Anti-Fraud Efforts Saved Government $35.4 Billion
WASHINGTON--The Department of Health and Human Services Office of Inspector General said it saved the government $35.4 billion with its anti-fraud activities during fiscal 2005.

In its semiannual report to Congress, OIG reported that it negotiated $1.4 billion in civil and administrative settlements related to Medicare, Medicaid and other federal health care programs in fiscal 2005, which ended Sept. 30.

During this period, OIG excluded 3,806 individuals and entities from participating in federally sponsored health care programs, and reported 537 criminal actions and 262 civil actions.

HHS Inspector General Daniel R. Levinson said accountability for Medicaid funds and payment for Medicaid prescription drugs were focal points of OIG work this period. The Dec. 2 report also cited a number of DME-related examples in the government's efforts to combat fraud and abuse, including:

--The owner of a Texas DME company was sentenced to 41 months in prison and ordered to pay $2.2 million in restitution for health care fraud and money laundering. As part of the scheme, the man paid recruiters for locating Medicare patients and paid physicians for fraudulent certificates of medical necessity and prescriptions for wheelchairs. Though Medicare was billed for power wheelchairs, beneficiaries either never received wheelchairs at all or were provided with much less expensive scooters.
--An Oregon DME supplier and its owner were sentenced for charges related to paying business associates to induce Medicare referrals. The company received reimbursements from Medicare for wheelchairs and accessories, hospital beds and enteral nutrition that were not medically necessary. A $2 million settlement agreement was previously reached, resolving their liability for DME that was allegedly either not provided or medically necessary and for allegedly using CMNs that were false, fraudulently obtained or forged.
--Home Health Corp. of America agreed to pay $300,000 and enter into a five-year integrity agreement to resolve its liability under the Civil Monetary Penalties Law provisions applicable to kickbacks. OIG alleged that from February 1997 through May 1998, HHCA made payments in the form of loans, consulting fees and monthly space rental payments to six physicians located in Pennsylvania and Florida in exchange for their referral of Medicare beneficiaries requiring home health services and/or DME provided by HHCA.
--United Healthcare Insurance Co. agreed to pay $3.5 million to resolve allegations that the contractor defrauded the Medicare program from 1996 to 2000. The government alleged that United Healthcare's telephone response unit mishandled beneficiary and provider phone inquiries and falsely reported its performance information to CMS while under contract with CMS as a regional carrier for DME claims.

The report also updated OIG's September 2004 report on Medicare payments for home oxygen equipment. The MMA mandated that CMS use Federal Employees Health Benefits plans' median payment rates to reduce Medicare fee schedule allowances for home oxygen equipment in 2005. As a basis for those rates, OIG issued a report analyzing FEHB median payments for home oxygen equipment.

But because questions were raised about the inclusion of oxygen contents for stationary and portable equipment in FEHB payment rates, OIG conducted additional work to clarify data in its earlier study and found that the plans' median payment rates were 12.4 percent lower for stationary equipment and 10.8 percent lower for portable equipment. The greatest difference between the median FEHB payment rate and the median Medicare fee schedule allowances was for oxygen concentrators.

While actual fee cuts varied by state, this year CMS reduced rates by an average of 8.6 percent for stationary oxygen and 8.1 percent for portable equipment.

OIG said its $35.4 billion in savings and expected recoveries include $32.6 billion in implemented recommendations and other actions to put funds to better use; $1.2 billion in audit receivables; and $1.6 billion in investigative receivables.

To view the report, click here.

DOT Rules Could Limit Driver Hours
WASHINGTON--Some HME delivery drivers may have to limit their hours on the road under new federal Hours of Service regulations. According to the U.S. Department of Transportation rule, drivers of property-carrying commercial motor vehicles that do not require a commercial driver's license for operation and who operate within a 150-air-mile radius of their normal work reporting location:

--may drive a maximum of 11 hours after coming on duty following 10 or more consecutive hours off duty;
--are not required to keep records-of-duty status; and
--may not drive after the 14th hour after coming on duty five days a week or after the 16th hour after coming on duty two days a week.

In place of records-of-duty status, employers must now maintain and retain accurate time records for a period of six months showing the time the duty period began and ended, and the total hours on duty each day.

The regulations went into effect on Oct. 1, with a grace period for compliance and enforcement until Dec. 31.

To view the rule, click here.

State News
Officials Announce Crackdown on South Florida Health Care Fraud
TAMPA, Fla.--State and federal law enforcement officials recently announced a joint effort to prosecute health care fraud perpetrators in South Florida, calling the region one of the worst for such crimes in the country.

"False billings, diversion of drugs and medical equipment, and other types of health care fraud cost taxpayers millions of dollars annually," said R. Alexander Acosta, U.S. Attorney for the Southern District of Florida. "More importantly, health care fraud endangers the health and well-being of our patients."

Acosta announced the new initiative with Florida Attorney General Charlie Crist.

Since mid-June, the U.S. Attorney's office has charged 64 defendants in 28 separate criminal cases totaling more than $20 million in losses for Medicare, Medicaid and other health insurance programs, Acosta said. In addition, the office's civil division has obtained seven injunctions to freeze some $14 million in fraud proceeds.

But law enforcement officials have painted an even grimmer picture: Michael Clemens, FBI special agent in charge of the Miami field office, estimated that in 2004 health care fraud losses in southeastern Florida were $1 billion. And the FBI office in Miami has 30 agents working health care fraud cases: 100 active investigations representing $3 billion in losses.

"South Florida is ground zero for health care fraud," Clemens said at a news conference about the initiative.

With the new joint initiative, officials also announced recently filed criminal charges against 20 health care fraud defendants in 12 separate cases, four involving durable medical equipment:

--Ahmed Pons, Santos Infante, Juan Carlos Olive, Diomar Ortega, and Sergio Ortega are charged with a scheme to defraud Medicare through the submission of false claims concerning Miami-area DME companies;
--Antonio Hevia allegedly recruited and paid kickbacks to Medicare patients for access to their patient identification information, which several Miami DME companies then used to submit fraudulent claims to Medicare;
--Miguel Ugarte, an orthotist, allegedly was paid to sign forms indicating that he had fitted Medicare patients for specialized orthotic equipment, for which Medicare was fraudulently billed by various Miami DME companies; and
--Yolanda Lobo, a licensed physician, is charged with making false statements to Medicare in certificates of medical necessity to support the Medicare payment for power wheelchairs.

The Hevia and Ugarte cases are the latest prosecutions arising from Operation Wash Rag, an investigation conducted by the FBI and HHS-OIG, which has resulted in the conviction of 10 defendants who have received prison sentences ranging from 18 to 99 months.

Acosta urged anyone with information regarding possible health care fraud to contact HHS at their toll-free fraud hotline (800) HHS-TIPS.

Tennessee May Expand Medicaid Program
NASHVILLE--After cutting 191,000 Medicaid beneficiaries from the state's rolls this year, Tennessee Gov. Phil Bredesen is proposing to enroll more "medically needy" residents in the program, The Tennesseean reported.

If approved by federal regulators, the plan would expand TennCare enrollment to several thousand needy adults with high medical bills and could begin as soon as February.

The state health care program currently has 91,000 people enrolled, and the goal is to expand it to 100,000, according to TennCare Director J.D. Hickey. Also, about 25,000 people are being shifted to Medicare, leaving new slots open for enrollees, he continued.

Those who were cut from TennCare this year can reapply if they meet a list of requirements such as high medical bills and being a single parent or disabled, although critics say the rules would make it difficult for many to enroll.

Hickey estimated the expansion could cost the state an additional $20 million in fiscal 2006.

In Brief
Medtrade is accepting presentations for consideration for its 2006 educational program, to be held Sept. 19-21 in Atlanta. According to show producers VNU Expo, because the landscape of the industry is ever-changing, it is vital to provide a forum for open exchange of information and ideas at the Medtrade shows, the premier events for HME professionals. The deadline to submit a presentation for review by the Educational Planning Committee is Jan. 20, 2006. To submit a session or topic, visit www.medtrade.com and choose "Become a Speaker" from the left-hand menu.

CMS is preparing to launch a redesigned Web site Thursday. To help users get familiar with changes to the Web site before it goes live, CMS has made a flash demonstration available at www.cms.hhs.gov under the "spotlight" tab. Program manuals and transmittals will not be updated until after Thursday.

In a recent letter to AAHomecare, President Bush thanked the association for its work to help citizens affected by Hurricanes Katrina and Rita. The letter reads in part: "The scenes from the hurricanes have touched our hearts, and our nation is again showing the world the greatest challenges bring out the best in America. Together, we will continue to bring new hope to those affected by this tragedy, and the Gulf Coast will emerge better and stronger. The good works of American Association for Homecare demonstrate the character and strength of our nation. May God bless all those affected by these storms, and may God continue to bless America."

CMS has notified Region B DMERC AdminaStar Federal that claims transmitted to the Coordination of Benefits Contractor (COBC) on Nov. 23 were inadvertently processed twice. All claims were originally crossed over correctly to the appropriate trading partner, but the COBC processed the same claims a second time in error, which caused duplicate denials. All suppliers who have received a notification letter dated Nov. 28 indicating claims were not transmitted to the appropriate trading partner should disregard the letter, the DMERC announced.

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