For the past 5 years, Thomas J. Lambert, president/owner of Maximum Comfort Inc, Redding, Calif, has been fighting CMS over the contention that Lambert is guilty of overutilization—resulting in an initial judgement against him for $1.2 million. CMS contended that Lambert had been overpaid for claims that “insufficiently documented the medical necessity of wheelchairs,” even though certificates of medical necessity (CMNs) had been submitted. In a widely publicized victory for the home care industry, a California judge overturned the ruling and said that CMS could not require suppliers to submit patient medical records in addition to the CMN to document the medical necessity for a power wheelchair payment.

The victory was sweet, but the fight has taken a heavy toll on Lambert’s 15-year-old business. He has abandoned a number of product lines—including respiratory—and lost a large chunk of his customer base. Home Health Care Dealer/Provider spoke with Lambert about his decision to sue CMS, how the case has affected his life and business, and how CMS could improve the CMN form.

Dealer/Provider: Since you are still in the business of providing mobility equipment and in light of the audits and determination from CMS, do you now include all the documentation required by the new DMERC manual?
Lambert: I do what the federal court determined to be the law. According to this judge—who has been on the bench since the days of Jimmy Carter—Congress gave the carriers the CMN as the item to use, the vehicle to gather any medical justification from the doctors. They never had the authority to send us on wild goose chases for PT evaluations and chart notes from doctors.

Dealer/Provider: But you are getting a prescription for the power chair, so that is the appropriate document, right?
Lambert: The doctor prescribes it, and if they are a Medicare primary, then we send them the CMN that Medicare requires—and, if they are state Medicaid, we send them form 6181, which is the equivalent of the CMN for MediCal. That determines what document he has to complete to qualify or disqualify that patient based on the questions on the document.

The carriers have the right to ask as many questions on that CMN as they want. If you read the judge’s order in the preliminary ruling, the problem the carriers claim to have is a simple fix—ask more questions in the CMN, but ask them to the doctor, not the deliveryman or the layman.

Dealer/Provider: Why did you decide to fight CMS in the first place?
Lambert: If the US government sends you a bill for $1,200,000, what are you going to do—roll over and pay it? Where do you get the money in the first place? You have a volume doing $600,000 a month and then, because of everything they do to you, all of a sudden you are down below $200,000 a month.

How do you pay $1.2 million when your business goes to pot, and you know that you did not do anything wrong? Do you just quit? I did not wake up and decide to sue the US government, I was fighting for survival and still am. I don’t have any bones to pick, I just wish they would follow the federal laws. They are trying to impose laws they have no business making—and putting a lot of people out of business.

Dealer/Provider: What has been the toll of this experience on your business and your life?
Lambert: We went from being the biggest company in town to almost nonexistent. It opened the door for competition. We had a lot of financial obligations. The company was just starting a respiratory business, and we were going out on these contracts to obtain the equipment we needed to fill the orders. We had leases, loans, everything. Our rental business was growing like crazy.

Once the income stopped, we could not make our payments, we could not meet our demands. From there on, we were first trying to renegotiate with our creditors. We thought we would get this thing resolved pretty quickly because we knew we did not do anything wrong—but it did not happen that way.

In the meantime, the business was cutting back because of the lack of reimbursements. The Redding store was paying CMS $26,000 a month. The payment plan for the Sacramento store exceeded the revenue for that store, so whatever we had coming from Medicare we never saw. I had a commercial building in town, just a block down the street from the new civic center. I bought it personally and leased it to the corporation. It was going to be part of my retirement once it was paid for. I had to sell that and take the money out of that thing to satisfy some of our big creditors. We tried to get things straightened out, but in the third year we had to file chapter 11 with our creditors. I had a lot of the notes personally guaranteed….so my credit was shot. The business was in Chapter 11 for a year, and a year ago last June we pulled it out.

I was up somewhere over 50 employees, but we got down below 20. The business is a shell of what it used to be. We have lost a lot of business, a lot of customers over the years, because when you get in trouble financially—they are not going to get credit. And when you are dealing with Medicare and Medical, it is not a cash and carry business. You get the merchandise, you put it out there, you bill for it, and hope you get paid for it. In the case of Medicare—with electronic billing—that will take 2 to 3 weeks; in the case of Medical, it is 2 or 3 months.

So having to go on a pre-pay, we had to turn a lot of business away, a lot of old customers that we had relationships with.

Dealer/Provider: You have won a few rounds thus far. Are you surprised you won these victories?
Lambert: No, we were not surprised because we knew we were right.

Dealer/Provider: Do you hope CMS appeals the federal ruling?
Lambert: Right now, CMS’ attitude is “we have a small problem out in the eastern district of California, so what? We may appeal, or we may not.” From my understanding, once we get the final decision, it will be published and other dealers in the country can use it. CMS is not bound by law to honor Judge Carlton’s decision—that is my understanding—but I am not an attorney. On the other hand, if CMS appeals it to the 9th district court of appeals, and it is upheld (and CMS loses), the ruling then becomes somewhat law of the land—and CMS has major problems nationally. There will be people who were put out of business because CMS officials were operating without authority. They were violating some laws, but that is not uncommon for these carriers because they think they have so much power and so many political connections they can do whatever they want.

Dealer/Provider: What has surprised you the most?
Lambert: Nothing. It is bureaucracy. It is politics. It is every corrupt thing in the world, and you are dealing with it when you are dealing with the US government. Especially with these contractors—they get a license to loot the treasury—and then they come after us because of so-called Medicare fraud. What they did to me had nothing to do with fraud. I don’t know what their mentality is. You know what will surprise me? If they send me a check. They don’t do anything that anybody tells them, they just do whatever the hell they feel like. These laws are made for somebody else, not these clowns.

Dealer/Provider: Knowing what you know now, would you sue the government again?
Lambert: Yeah. I didn’t do anything wrong. They can say “overutilization”—it’s a nice word for fraud. They don’t want to call you a fraud, because they probably have problems there, so they say “overutilization.” Bologna! I delivered one chair on each prescription. You are dealing with the government, and these people are going to try to bully you all over the place. They have unlimited resources. If you back down from them, you have to live with that the rest of your life.

Dealer/Provider: Do you expect to stay in business?
Lambert: I’m not going anyplace. What do I have to lose now? I have lost everything else—business, homes. I would like to get my business going again, but CMS is going to have to make some changes here to be fair to providers. They should tell providers what they want and stick with it. Don’t keep changing your mind, don’t keep changing the rules of the game, and don’t make new laws that are retroactive to old business.

C.A.Wolski is a contributing writer for Dealer/Provider.