On September 15, 2010, Daniel R. Levinson, Inspector General of the federal Department of Health and Human Services, testified before the House Subcommittee on Health to discuss the Office of Inspector General’s (OIG) efforts to combat health care fraud, waste, and abuse, specifically as it relates to medical equipment and supplies. All DMEPOS suppliers should take note of these initiatives.

Five-Principal Strategy

In his testimony Levinson, presented OIG’s “Five-Principal Strategy” to identify and root out fraud and abuse in DMEPOS suppliers.

  1. Enrollment: Scrutinize individuals and entities that want to participate as providers and suppliers prior to their enrollment or reenrollment in the health care programs. Levinson said that OIG has “consistently found that Medicare enrollment standards and oversight are not sufficient to prevent noncompliant and sham suppliers from obtaining Medicare provider numbers and billing privileges.” He also indicated that some “Medicare-enrolled suppliers fail to maintain even the most basic Medicare standards.” In an effort to address these concerns, CMS has increased the frequency of unannounced site visits, begun targeted background checks of suppliers in high-fraud areas, and implemented a mandatory accreditation process.
  2. Payment: Establish payment methodologies that are reasonable and responsive to changes in the marketplace and medical practice. Levinson stated that OIG has identified many items of DMEPOS where the market price and the reimbursement rate are misaligned such that excessive profits are available to anyone capable of meeting the Medicare enrollment standards which “makes DME in particular a lucrative target for criminals.”
  3. Compliance: Assist health care providers and suppliers in adopting practices that promote compliance with program requirements. Levinson referenced OIG’s recognition that “most DMEPOS suppliers are legitimate” and OIG plans to “educate and assist these well-intentioned providers in fully complying with Medicare laws and regulations” beginning in 2011 through its Provider Compliance Training Initiative.
  4. Oversight: Vigilantly monitor the programs for evidence of fraud, waste, and abuse. Levinson highlighted the creation in 2009 of the OIG’s “multidisciplinary, multiagency Advanced Data Intelligence and Analytics Team” which supports the multi-agency Health Care Fraud Prevention and Enforcement Action Tem. He stated that those organizations have developed innovative uses of information technology and data analysis to consistently identify patterns of overutilization and failure to comply with Medicare requirements.
  5. Response: Respond swiftly to detected fraud, impose sufficient punishment to deter others, and promptly remedy program vulnerabilities. Levinson commented that OIG and DOJ are “working in partnership to accelerate the Government’s response to fraud schemes by reducing the time needed to detect, investigate, and prosecute fraud.”

The Affordable Care Act & Competitive Bidding

Levinson further noted that the Affordable Care Act (ACA) provides “new authorities and imposes new requirements consistent with OIG’s health care integrity strategy and recommendations” including: promoting data access and integrity; requiring actions to strengthen provider enrollment standards; promoting compliance with program requirements; and enhancing program oversight. Levinson cautioned that the Medicare program will continue to be vulnerable to fraudulent DMEPOS suppliers but believes that the Competitive Bidding Program will provide a mechanism to control fraud, waste and abuse but that the Competitive Bidding Program is not as comprehensive as it should be.

For the full testimony: http://www.oig.hhs.gov/testimony/docs/2010/testimony_levinson_09152010.pdf