CMS Cracks Down on Power Chair Fraud
Saying wheelchair spending has increased almost 450% over the last 4 years, Centers for Medicare and Medicaid Services (CMS) Administrator Tom Scully in September outlined an aggressive 10-point program to curb Medicare billing fraud.

“While many of these wheelchairs are provided by ethical suppliers and go to beneficiaries in need, we know that a great number of unscrupulous suppliers are promising free wheelchairs to beneficiaries who don’t need them. We are taking immediate action to stop these scams,” Scully said in the announcement.

At the same time, the Department of Health and Human Services Office of Inspector General (OIG) said it is investigating the proliferation of DME fraud cases involving inflated billings to Medicare, charges for equipment and supplies not delivered, and the falsification of documents to qualify beneficiaries for wheelchairs and other equipment that they often did not need.

CMS plans to start its 10-point nationwide cleanup campaign, dubbed “Operation Wheeler Dealer,” in Texas. Recent reports from the CMS Dallas Regional Office and the Houston Chronicle show that in Harris County, Texas, alone, Medicare paid for more than 31,000 power wheelchairs in 2002, compared to just over 3,000 power wheelchairs in 2001.

The Scooter Store, a national supplier, is based just 150 miles away from Harris County in New Braunfels, Tex.

“We at the Scooter Store and everybody in the Power Mobility Coalition are just enraged and horrified that [this fraud] is going on. If it wasn’t true, nobody would believe the stories of the stuff that was going on over there. It is just absurd,” says Doug Harrison, the company’s president and CEO, of reports that unsolicited wheelchairs would just show up on beneficiaries’ doorsteps and that the elderly would be conned into taking advantage of free medical services, such as eye examinations, only to have their Medicare numbers ripped off and used to bill for mobility products.

The CMS program aims to stop such “improper hemorrhaging of Medicare dollars”—as Scully wrote in a statement—with an aggressive application review process for companies seeking to provide power wheelchairs; therefore, CMS does not anticipate issuing any new supplier numbers until early 2004.

The 10-point plan also requires that existing power wheelchair suppliers in Harris County receive education on the proper coverage and utilization of power wheelchairs or have their billing privileges suspended. In addition, claims for power wheelchairs will undergo special federal scrutiny from CMS clinicians before payment can be made.

For the first time, Medicare policy will require that a medical provider see a patient before prescribing a wheelchair or scooter. Other initiatives clarify rules and provide beneficiaries with information to protect themselves against unscrupulous suppliers.

In general, the new CMS provisions are wholeheartedly supported by industry frontrunners—including the American Association for Homecare (AAHomecare), the Power Mobility Coalition (a beneficiary advocacy group of suppliers and manufacturers), the Medical Equipment Suppliers Association (the trade association for HME providers in Texas, Oklahoma, Arkansas, and Louisiana), and various major manufacturers, including Invacare, Permobil, and Pride Mobility Products Corp.

However, at least two of the points in CMS’s 10-point plan have sparked some concern. One is the adoption of inherent reasonableness review guidelines, starting with motorized wheelchairs.

“We definitely want to cut back and have a zero-tolerance policy on fraud in this industry, and [CMS] has set out some good regulations and standards for new providers and for investigating providers who may be committing fraud, but inherent reasonableness is a pricing issue that is irrelevant to fraud,” says Martin Szmal, director of government affairs for Pride Mobility Products Corp, Exeter, Pa.

Another area of deliberation is the provision that requires DMERCs to immediately adopt local medical review policies (LMRPs) that accurately portray the clinical conditions for which mobility products are reasonable and necessary.

Harrison hopes that CMS does not change the LMRP and discovery criteria so that “to eliminate the 4,700 bad units per month, [CMS blocks] the couple hundred people per month who are legitimate and have need from getting that type of equipment.”

But despite the possible inconveniences, dealers such as Larry Rice, general manager of the Wheelchair Store in Houston, say it is about time something was done about the abuse of the system.

“People who have nothing to hide will have no problem,” he says.

CMS Implements HIPAA Contingency Plan
After years of preparation, the day has nearly arrived. The October 16 deadline for compliance with the Health Insurance Portability and Accountability Act (HIPAA) transaction and code sets is just days away—but will everyone be ready?

Maybe not, according to a September 23 Centers for Medicare and Medicaid Services (CMS) statement that announced CMS’ own contingency plan for all fee-for-service contractors.

Under the contingency plan, CMS will continue to accept and process claims in the electronic formats now in use, giving providers additional time to complete the testing process. CMS says it will regularly reassess the readiness of its trading partners to determine how long the contingency plan will remain in effect.

In an earlier statement, CMS Acting Deputy Administrator Leslie V. Norwalk said the Department of Health and Human Services allows those covered entities that made a “good faith effort” to comply with HIPAA transaction and code set standards to implement contingencies to maintain operations and cash flow.

CMS representatives made the decision to implement its contingency plan after reviewing statistics showing what they deemed unacceptably low numbers of compliant claims being submitted.

“Medicare is able to process HIPAA-compliant transactions,” said Tom Grissom, director of CMS’ Center for Medicare Management, “but we need to work with our trading partners to increase the percentage of claims in production.”

Grissom also encouraged HIPAA-covered entities to assess the readiness of their trading partners and to implement contingencies if appropriate. However, Norwalk emphasized that contingency plans should not be implemented until every effort is made to comply with the October 16 date. “It’s not something that can be ignored or brushed aside,” she said.

OIG Proposal Gets Tough on Excessive Claims
The Social Security Act allows the Secretary of the Office of Inspector General (OIG) to exclude from participation in any federal health care program any individual or entity that without “good cause” bills for items or services “furnished substantially in excess of such individual’s or

entity’s usual charges.” In the September Federal Register, the OIG published a rule that proposes two methods of calculating a provider’s “usual charge”: one being the provider’s average charge for an item during a 12-month period and the second being the provider’s median charge for an item during 12 months. Under both proposals, only those charges or costs that are more than 120% of a provider’s usual charges or costs will be deemed to be “substantially in excess.” The OIG may, but is not required to, exclude a provider for violation of the statute.