Nov 30, 2009 10:48 AM Reprinted with permission, HomeCare Magazine, www.homecaremag.com

ATLANTA — Home medical equipment stakeholders have been fending off slings and arrows cast by the press for the last month, but an article appearing in the Wall Street Journal regarding the effect of oxygen rules on patients provided some solace last week.

Amy Merrick's "Oxygen Rules Pinching Patients" painted a stark picture of the challenges facing oxygen patients under the 36-month rental cap implemented in January and, as of Oct. 1 and 2, respectively, mandatory accreditation and surety bonds.

"New Medicare rules designed to reduce waste and fraud in medical-equipment reimbursements are driving some home oxygen suppliers out of business and leaving patients scrambling to find new providers," Merrick wrote in her Nov. 24 article.

While CMS says it is paying too much for oxygen equipment and the payments for the first three years should cover the next two years as well, Merrick pointed out that "suppliers say those calculations don't account for how much it actually costs to provide services, such as delivering oxygen tanks."

The result, she said, is that some companies "are balking at accepting new patients who are near or have already reached the three-year limit on full payments."

Nurse and case manager Barbara Renzullo, who works at Massachusetts General Hospital in Boston, told Merrick the new oxygen rules are "penny wise and pound foolish." She cited an instance in which a terminally ill patient who wanted to move from Massachusetts to Virginia to live with her daughter could not find a Virginia oxygen provider who would take her on. She spent extra days in the hospital until a Massachusetts provider mailed an oxygen concentrator, Renzullo told Merrick.

While stakeholders applauded Merrick's balanced story, they were not so happy about a slew of derogatory reports that appeared in several other publications. Among the most recent was a Reuters piece transmitted Wednesday to member news organizations.

"Cancer of fraud permeates U.S. healthcare system," trumpeted the headline. Noting that "Medicare has paid as much as $92 million from 2000 to 2007 for medical services or equipment ordered or prescribed by doctors who were dead at the time," Reuters writer Tom Brown focused most of his article on Florida.

"Hardly a week goes by without authorities in Florida reporting another arrest, indictment or conviction for Medicare fraud, which has replaced the drug trade as the crime of choice among many criminals," Brown wrote. "The cases often involve multimillion-dollar schemes featuring bogus suppliers of wheelchairs, or other so-called durable medical equipment devices, and sham infusion therapies for the treatment of HIV and AIDS patients."

An estimate by the National Healthcare Anti-Fraud Association sets the country's losses to health care fraud at $60 billion, or about 3 percent of its total health care expenditures, Brown wrote, but he added that Reuters considers that figure "conservative."

• In an article about the acquisition cost of a wheelchair and the average reimbursement from CMS that appeared in November's AARP Bulletin, the association called the difference "a threat to Medicare."

That elicited a response from Michael Reinemer, vice president, communications and policy for the American Association for Homecare, who pointed out that the purchase cost of a wheelchair does not include a number of essential services, namely delivery, set up, fitting, maintenance, etc.

Reinemer also took issue with AARP's assertion that an HME lobby has prevented cost-cutting measures, saying that "in fact, reimbursement rates for durable medical equipment, including wheelchairs, were cut substantially in the Medicare Modernization Act of 2003 and the Medicare Improvements for Patients and Providers Act of 2008 and rates have been subject to a freeze for the last five years."

·         The attacks continued on Nov. 9, when Poynter Online, a product of the Poynter Institute, which caters to journalists, ran an article on Medicare fraud. That appeared to paint all HME providers as crooks.

"DMEs are so-called pharmacies or medical supply companies. [Fraudulent ones] literally open for 30 to 60 days, get a list of patients and their Medicare numbers and then bill like crazy," the article said. "They send in their bills for artificial arms and legs, wheelchairs, breathing machines, medicine, etc. But none of this is ever bought and sold; Medicare just pays for these items."

That drew Reinemer's ire. "We are extremely distressed that you suggest all providers in this sector are, by definition, criminals," he wrote, adding that while the article might be alluding to "fly-by-night operators … you make no mention of the honest providers."

·         That wasn't the last of the bad news. Alex Leary, writing a blog for the Nov. 19 issue of the St. Petersburg (Fla.) Times, questioned what Rep. Kendrick Meek's problem was with competitive bidding. Meek has sponsored H.R. 3790, which would eliminate DMEPOS competitive bidding. Leary quoted the Center for Public Integrity as saying that "federal investigators have long complained that the equipment business is a hotbed of Medicare abuse."

Reinemer fired back with a swift reply. "This is breath-taking in its shallowness and absence of context and balance — even for a political blog," he wrote. "First of all, the Meek bill would require cuts to the Medicare durable medical equipment reimbursement rates in order to offset the savings that this train wreck of a bidding program would have reaped. Wouldn't that be worth mentioning?"

He enumerated several of the organizations that support Meek's bill, noted that Leary had confused two separate issues (combating fraud and accurate price setting in Medicare) and emphasized that competitive bidding was a "price-setting mechanism, not an anti-fraud program. The bid program, as designed by Medicare, deliberately reduced the number of equipment providers (competitors) by 90 percent."

As well, Reinemer pointed out, the industry itself is zealous about deterring fraud and in fact supports anti-fraud legislation.

·         He got the chance to explain the point again when on Nov. 25, Carol Gentry of Health News Florida wrote an editorial that Reinemer called "a smear of durable medical equipment advocates, suggesting in your article today that we tolerate fraud."

He shot back once again, noting in a response that AAHomecare has not only endorsed an anti-fraud measure introduced by Sen. George LeMieux, R-Fla. — which calls for better screening of providers before enrollment — "but we are on record urging Congress to go ever farther than the LeMieux bill and adopt our entire 13-point plan, which would increase penalties for fraud, mandate more site inspections and get more resources to federal fraud fighters, among other steps."