Acting CMS Administrator Leslie Norwalk on Monday discussed the agency's newly announced pilot program targeting Medicare billing fraud committed by medical equipment companies in South Florida and Southern California, the two areas where the problem is believed to be most severe, the Miami Herald reports (Dorschner, Miami Herald, 7/3). Under the two-year pilot program, which could be extended nationwide if successful, CMS plans to fight fraud by strengthening requirements for medical equipment dealers to receive and maintain medical billing numbers.
Company owners and managers of new suppliers will be required to undergo strict background checks. Current Medicare suppliers will have to reapply to the program annually instead of every three to five years (Kaiser Daily Health Policy Report, 7/2).
According to the Herald, one reason for federal officials' "heightened interest in medical equipment is that costs are rising at a stunning rate." Medical equipment companies in Miami-Dade County billed Medicare $1.68 billion in 2006, up from $470 million in 2002. The amount billed in Miami-Dade last year was "almost as much ... as the entire state of California, which has about 10 times the population of Miami-Dade," the Herald reports.
Norwalk said that the primary purpose of the pilot program is to "put some feet on the street," with investigators visiting the equipment companies to make sure that they are actual businesses (Miami Herald, 7/3). Norwalk added, "The point is to keep fraud providers out of the program before they can rip us off. With re-enrollment and multiple surprise visits, we think we can stop the fraud" (Marcus, Bloomberg/Washington Post, 7/3).
R. Alexander Acosta, the U.S. attorney for South Florida, said the program "will go a long way toward reducing health care fraud in South Florida. Prevention undoubtedly will have a much greater impact than after-the-fact prosecution."
According to the Herald, CMS officials "hope the reapplication process will scare away at least some of those committing fraud, but there are no specific requirements for operating a durable medical equipment company, and those who apply are not likely to be turned down unless they have been convicted of felonies" (Miami Herald, 7/3).
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