Medicare To Clamp Down on Equipment Supplier Scams

Federal officials on Tuesday are expected to announce a nationwide effort to combat fraudulent Medicare billing by medical equipment suppliers, the Los Angeles Times reports.

CMS last year began requiring suppliers to renew their applications to the program every three years and to submit to more frequent inspections. Previously, suppliers usually were screened and inspected only once, when they applied to participate in Medicare. However, many suppliers continued to pose as legitimate businesses while billing Medicare for products that were never needed by beneficiaries or that were never delivered, according to the Times.

"It's relatively easy for people to present the façade of meeting all those (federal) standards," Medicare Director of Program Integrity Kimberly Brandt said, adding, "They know when the inspector is going to come, they know what he's looking for, so they can make it look like they meet all of those things."

As part of efforts to stop such fraud, HHS officials plan to require that medical equipment suppliers participating in Medicare be certified by one of 10 approved accrediting agencies. The accreditation process includes stricter background checks and more frequent inspections with short notice.

If the investigation yields any suspicion of fraud, the supplier could be removed from the program. Suppliers also would have to set their prices through a competitive bidding process. The rules will take effect in 70 urban areas this spring, and federal officials previously announced that the rules will be imposed in an additional 10 cities.

According to acting CMS Administrator Kerry Weems, "This saves the government money; it saves the beneficiaries money, and they're assured of quality and access."

Some medical equipment suppliers criticized the rules as too strict and said they might stop participating in Medicare (Hennessy-Fiske, Los Angeles Times, 1/8).