The Centers for Medicare & Medicaid Services has revoked the billing privileges of 1,139 suppliers of durable medical equipment prosthetics, orthotics and supplies in south Florida and southern California and suspended payments to home health agencies in the Miami-Dade, Fla. area.
The suppliers, who were paid $265 million between calendar years 2005 and 2007, lost their billing privileges for not re-enrolling in the Medicare program and not meeting Medicare's supplier standards.
The DMEPOS High-Risk Suppliers Demonstration project began in October 2007.
On Oct. 6, CMS launched efforts to address potential waste, fraud and abuse by suspending payments to 10 home health agencies in the Dade County, Fla., area and is continuing to review claims and payments to other agencies as resources allow.
CMS is also requiring certain durable medical equipment suppliers to post a surety bond.
"We know the majority of medical equipment suppliers and healthcare providers want to improve the health of Medicare beneficiaries, but we also know there are those who look for any opportunity to take advantage of beneficiaries and Medicare," said CMS Acting Administrator Kerry Weems.
The final surety bond regulation, required by the Balanced Budget Act of 1997, makes certain DMEPOS suppliers post a $50,000 surety bond. Existing suppliers must comply with this requirement by Oct. 2, 2009, while newly enrolling suppliers must meet this requirement by May 4, 2009.
The requirement is designed to limit the Medicare program risk from fraudulent equipment suppliers and ensure that only those suppliers who remain in the program furnish items to Medicare beneficiaries that are considered reasonable and necessary from legitimate DME suppliers.
According to officials, suppliers who have had certain adverse legal actions imposed against them in the past may also be required to post a higher bond amount. All newly enrolling suppliers who meet the requirements of the rule will be required to have a surety bond before they can enroll in the Medicare program.
While this regulation requires most suppliers to obtain a surety bond, some companies or organizations that supply these items are exempt, including certain physicians and non-physician practitioners, physical and occupational therapists, state-licensed orthotic and prosthetic personnel and government-owned suppliers.
CMS is also:
• implementing extensive pre- and post-payment review of claims submitted by ordering/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 number of home health services and the beneficiaries for whom they ordered those services;
• and visiting high risk beneficiaries to ensure they are appropriately receiving the services for which Medicare is being billed.