Daniel Levinson Testifies on Medicare’s Coverage of DMEPOS Suppliers

On September 15, 2010, the US Department of Health and Human Services Inspector General Daniel Levinson testified before the House Subcommittee on Health of the House Committee on Energy and Commerce regarding Medicare’s coverage of DMEPOS suppliers.

Stating that DMEPOS expenditures represented 2% of all Medicare expenditures–$10 billion–in 2009, Levinson notes that there is a great deal of fraud and abuse surrounding these claims. He described the OIG’s response to such fraud “in the context of five principles OIG has identified as essential to combating health care fraud.”

1. Enrollment – DMEPOS has become a target for fraudulent suppliers because of the “low barriers to entry and weak oversight and enforcement of enrollment standards.” Thus, Levinson proposes that prospective-suppliers must be more closely scrutinized prior to enrollment in health care programs.

2. Payment – Because the Medicare reimbursement rate for DMEPOS does not match the market prices, Levinson proposes that the payment methods be “reasonable and responsive to changes in the marketplace and the medical practice.”

3. Compliance – Because most DMEPOS suppliers are not ill-intentioned, the OIG will assist and educate healthcare providers and suppliers in complying with program requirements through an OIG Provider Compliance Training Initiative, which will deliver compliance training. The Training Initiatives are scheduled to begin in 2011 around the country.

4. Oversight – The OIG will continue overseeing programs for instances of fraud and abuse.

5. Response – The OIG will continue identifying instances of fraud and abuse through Strike Forces, “impos[ing] sufficient punishment to deter others, and promptly remedy[ing] program vulnerabilities.”

Furthermore, Levinson noted that while the new Health Reform Act “establishes new authorities and requirements to strengthen enrollment scrutiny, oversight, and response to address fraud vulnerabilities,” it does not solve the problem of the misaligned Medicare payments and market prices. Levinson noted that Competitive Bidding Program can help address these price discrepancies.

For more information, please contact Adrienne Dresevic, Esq. or Carey F. Kalmowitz, Esq. at (248) 996-8510 or (212) 734-0128, or Daniel B. Brown, Esq. at (770) 804-6475 or visit the Stark and Anti-Kickback specialty page on the HLP website.