CMS takes steps to fight fraud

RACs to look at DME claims

The Centers for Medicare & Medicaid Services (CMS) is consolidating its fraud detection efforts; strengthening its oversight of medical equipment suppliers and home health agencies; and launching the national recovery audit contractor (RAC) program.

"Because Medicare pays for medical services and items without looking behind every claim, the potential for waste, fraud and abuse is high," said CMS Acting Administrator Kerry Weems. "By enhancing our oversight efforts, we can better ensure that Medicare dollars are being used to pay for equipment or services that beneficiaries actually received, while protecting them and the Medicare trust fund from unscrupulous providers and suppliers."

As part of these enhanced efforts, CMS is also shifting its traditional approach of reviewing claim history to fight fraud by working directly with beneficiaries to ensure that they received the durable medical equipment or home health services for which Medicare was billed.

CMS will be taking additional steps to fight fraud and abuse in home health agencies in Florida and suppliers of durable medical equipment, prosthetics and orthotics (DMEPOS) in Florida, California, Texas, Illinois, Michigan, North Carolina and New York. Those additional steps include:

  • conducting more stringent reviews of new DMEPOS suppliers' applications, including background checks to ensure that a principal, owner, or managing owner has not been suspended by Medicare;
  • making unannounced site visits to double-check that suppliers and home health agencies are actually in business;
  • implementing extensive pre- and post-payment review of claims submitted by suppliers, home health agencies and ordering or referring physicians;
  • validating claims submitted by physicians who order a high number of certain items or services by sending follow-up letters to these physicians;
  • verifying the relationship between physicians who order a large volume of DMEPOS equipment or supplies or home health visits and the beneficiaries for whom they ordered these services;
  • identifying and visiting high-risk beneficiaries to ensure they are appropriately receiving the items and services for which Medicare is being billed.

For those claims not reviewed before payment is made, CMS is implementing further medical review of submitted DMEPOS claims by one of the new recovery audit contractors (RAC). The three-year RAC demonstration program in California, Florida, New York, Massachusetts, South Carolina and Arizona collected over $900 million in overpayments and nearly $38 million in underpayments returned to health care providers.