Suppliers dropped by Medicare often gain re-entry

[November 04, 2008]  WASHINGTON (AP) -- Hundreds of Medicare suppliers who had their billing privileges revoked last year were allowed back into the entitlement program, even some suppliers that have since been indicted for defrauding taxpayers, according to federal investigators.

In all, 491 suppliers in South Florida had their billing privileges revoked after investigators visited the company and found no business present at a listed address or found it closed during regular working hours. But 243 of those banned suppliers appealed. They submitted photographs, utility bills and other evidence of their legitimacy. In the end, hearing officers granted nearly every one of the appealers the right to bill Medicare again.

So what became of those allowed back into the program? Roughly two-thirds of them have again had their billing privileges revoked or inactivated, said the Health and Human Services department's inspector general. Within that group, 18 were indicted, including 10 who were convicted and ordered to pay between $90,000 and $11 million in restitution. The 10 defendants were also sentenced to jail terms ranging from one to four years.

"Hearing officers generally accept all documentation submitted by suppliers as legitimate, unless they have reason to believe otherwise," said the report from HHS Inspector General Daniel R. Levinson. "Our findings suggest that a more critical review ... is warranted."

South Florida is a hotbed for Medicare fraud. Miami-Dade County has the highest ratio of medical equipment suppliers to beneficiaries of any county in the nation. In testimony last year, HHS Secretary Mike Leavitt described visiting offices of medical equipment suppliers that were locked and empty when officials arrived during business hours. "I have no doubt that hundreds of thousands of dollars were being billed by these sham companies," he said.

Medicare will spend about $8.5 billion this year for items such as hospital beds, wheelchairs, respirators, walkers and artificial limbs.

A supplier whose billing privileges have been revoked can request a hearing within 90 days. Three hearing officers reviewed the cases in South Florida. One granted reinstatement in 54 of 54 cases. Another granted reinstatement in 87 of 93 cases. The other in 81 of 96 cases.

The inspector general recommended that Medicare officials strengthen guidelines for what evidence can be accepted as proof of legitimacy. The Centers for Medicare and Medicaid Services agreed, but asked for suggestions.

The report said CMS should create a list of evidence that it believes supports a decision to overturn a revocation. Such items as cell phone bills or leases should not be used to show legitimacy when the company's staff was never present during visits to the business.

Medicare officials said Monday that they have seen a substantial drop in recent months in the number of companies applying to bill the program for medical equipment. They said the drop is a result of changes that took effect earlier this year. Beginning March 1, any company losing its billing privileges was required to undergo accreditation before getting a new supplier number. That process involves paying a $3,000 to $10,000 fee, a thorough onsite review as well as a review of staff qualifications and financial records.

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On the Net:

Health and Human Services inspector general:
http://oig.hhs.gov/

[Associated Press; By KEVIN FREKING]

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