Durable Medical Equipment Fraud
Unlike the more broad medical devices, durable medical equipment fraud involves equipment that can be used repeatedly, serves a medical purpose and is appropriate in a patient’s home or residential setting. Generally speaking, for a durable medical equipment supplier to file a claim for Medicare or Medicaid funds, the equipment must have been ordered by a physician through a “Certificate of Medical Necessity” (CMN). Upon receipt of the CMN, signed by the patient’s physician, the supplier furnishes the equipment to the Medicare or Medicaid recipient and bills the State or Federal Government pursuant to a schedule of allowable costs.
Medicare and other Government and private health care plans will only pay for equipment that meets the appropriate medical necessity standards (e.g., ordered, provided, reasonable, necessary, and meeting criteria established by medical review policies). “No payment may be made under Part A or Part B for any expenses incurred for items or services… which are not reasonable and necessary for the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body member.” Many of the fact patterns that we see in False Claims Act cases, result in, or have an underlying, lack of medical necessity for the particular DME provided.
Questions to ask are as follows:
Do the sales representatives routinely . . .
- complete section B (Medical Necessity) of the CMN?
- alter or add any information on the CMN after receiving the completed and signed CMN from the physician or other authorized person?
- sign the CMN for the treating physician or other authorized person?
- urge physicians or other authorized persons to order equipment or supplies that exceed what is reasonable and necessary for the patient?
- not deliver items that require a written order from the treating physician or other authorized person prior to receiving the written order?
Does the company…routinely
- submit claims for DME items or services prior to receiving a written order or CMN from the treating physician or other authorized person?
- submit claims for DME items or services when the CMN is improperly and incorrectly completed by the treating physician or other authorized person?
- fail to maintain completed and signed CMNs in its files?
- submit claims for services without regard to whether the treating physician or other authorized person attests in section D that the DME ordered are medically necessary for the patient?
- submit claims representing that the DME supplier provided an item or service or part of an item or service that the patient did not receive?
- Fail to fulfill a contractual agreement, for example, when the DME supplier has agreed to service the rental equipment and does not fulfill this obligation?
- Seek reimbursement for a service that is not covered by Medicare or does not meet the Medicare coverage criteria as documented by the patient’s current medical condition?
- submit claims for payment for the same patient, for the same service, for the same date of service (by the same or different DME supplier), or the same claims are submitted to more than one payor as primary?
- seek reimbursement for items or services provided, but not ordered by the treating physician or other authorized person?
- select a code to maximize reimbursement when such code is not the most appropriate descriptor of the service (e.g., billing for a more expensive piece of equipment when a less expensive piece of equipment is provided)?
- bill for individual components when a specific HCPCS code provides for the components to improperly change information on a previously denied claim and continuing to resubmit the claim in an attempt to receive payment?
- provide and/or bill for substantially more items or supplies that are reasonable and necessary for the needs of each individual patient?
- provide and/or bill for an item or service that does not meet the definition and/or requirement of the item or service ordered by the treating physician or other authorized person, such as items that are inferior in quality or even not cleared for marketing by the FDA, and therefore do not meet the definition of what was ordered and/or billed?
- alter the treating physician’s or other authorized person’s diagnosis in an attempt to receive reimbursement for a particular item or service?
- indicate on the claim form that the place of service is a location other than where the service was provided? For example, the patient resides in an SNF and a DME supplier submits a claim with the place of service as the patient’s home, and if submitted truthfully, the claim would be denied.
- pay a fee to a physician for each CMN the physician signs, provides free gifts to physicians for signing CMNs, provide items or services for free or below fair market value to.
- “dump” items or supplies in a facility or in a beneficiary’s home (e.g., mail order supply companies that continue to send the patient supplies when the supplies are no longer medically necessary).
One or more of these scenarios may be the basis of liability under the False Claims Act.