On October 6, 2008, CMS announced expanded efforts to combat Medicare DMEPOS and home health fraud and abuse, including targeted reviews of home health agencies (HHAs) in Florida and greater scrutiny of DMEPOS suppliers in Florida, California, Texas, Illinois, Michigan, North Carolina, and New York. In particular, CMS will be reviewing DMEPOS items with high expenditures and high growth rates, such as oxygen supplies and equipment, power mobility devices/power wheelchairs, and diabetic test strips. Targeted steps will include:

Closer reviews of new DMEPOS suppliers’ applications, including background checks to ensure that owners and managers have not been suspended by Medicare;

  • Unannounced site visits of suppliers and HHAs;
  • Extensive pre- and post-payment review of claims submitted by suppliers, HHAs, and ordering or referring physicians;
  • Validation of claims submitted by physicians with high-volumes of orders for certain items or services, and verification of the relationship between such physicians and the beneficiaries for whom they ordered these services; and
  • Interviews with high-risk beneficiaries to ensure they are appropriately receiving ordered items and services.

In addition, CMS has announced that it has awarded contracts to four permanent Recovery Audit Contractors (RACs) to review all Medicare Part A and B paid claims to identify Medicare overpayments and underpayments. The RACs will be paid on a contingency fee basis on both the overpayments and underpayments they find. The nationwide RAC program follows a three-year demonstration program in six states that collected over $900 million in overpayments and returned nearly $38 million in underpayments. Finally, CMS is consolidating the Medicare’s program safeguard contractors (PSCs) and the Medicare Drug Integrity Contractors (MEDICs) with new Zone Program Integrity Contractors (ZPICs), which eventually will be responsible for ensuring the integrity of all Medicare-related claims.