This article first appeared in the St. Louis Beacon, April 24, 2013 - WASHINGTON – A Chesterfield physician is deluged by faxes from companies claiming falsely that her patients had requested medical equipment. An elderly Missouri woman gets three or four calls a day from marketing firms trying to convince her to ask her doctor for equipment she doesn’t need or want.
“Some of these companies may be using tactics which are unfair, deceptive or illegal,” U.S. Sen. Claire McCaskill said Wednesday at the first hearing of the new Senate Homeland Security subcommittee on financial and contracting oversight, which she chairs. (Click here for a webcast of the hearing.)
She alleged that misleading and possibly fraudulent tactics by companies that sell durable medical equipment – such as diabetic testing and sleep apnea equipment – may be costing Medicare and Medicaid billions a year. Only a small percentage of those losses end up being recovered.
Following up on the complaints of several Missourians, McCaskill grilled three officials who monitor the system and lambasted two medical-equipment firms that failed to send executives to testify at the hearing.
“You’re in trouble. This is a big problem,” McCaskill told officials of the Centers for Medicaid and Medicare Services (CMS) who are in charge of finding waste and fraud. “We’ve got 66 percent ‘improper’ payments on $9 billion, and [recovery auditors] find only $34 million.”
McCaskill was referring to CMS estimates to the subcommittee that the “error rate” in 2012 for the $8.8 billion in payments for durable medical equipment was about 66 percent, meaning that $5.8 billion of those payments might be considered “improper.”
The total amount recovered through audits was $34 million in 2011, with last year’s recovery total not yet available, the CMS reported to the subcommittee.
deputy administrator Peter Budetti, who is in charge of its “program integrity” effort, acknowledged problems but said the CMS now has in place a “comprehensive strategy to further reduce the fraud, waste and abuse that result in improper payments.”
Budetti said the estimated “error rate” of about 66 percent on such medical equipment payments last year was inexact and included many cases of mere technical errors in the paperwork. But he was unable to tell McCaskill what percentage of improper payments involved technical issues.
The subcommittee’s ranking Republican, U.S. Sen. Ron Johnson, R-Wisc., agreed with McCaskill that the recovery rate of improper payments was extremely low. He said it was “a real challenge” to expose fraud and abuse in the Medicare program fully, and observed that current efforts are “obviously not working very well.”
McCaskill said the issue was first brought to her attention by internist Dr. Charlotte J. Kennedy, of Chesterfield, who had copied the senator on a letter of complaint in January to the inspector general of the U.S. Department of Health and Human Services.
Sending copies of faxed requests for medical equipment prescriptions, Kennedy wrote that “every single one of these patients did not request any of these devices or products. These were cold calls to their homes and, in fact at one point, one patient was badgered several times over several days to try to get her to agree to take” the product.
About a month ago, McCaskill -- a former Missouri state auditor and prosecuting attorney -- asked Missourians to provide her with other examples. “In less than two weeks, I had more than 150 replies,” she said Wednesday.
One woman told the senator that her 87-year-old mother in southwest Missouri received “as many as three to four calls from medical marketing companies every single day,” even though she is on a “Do Not Call” list “and has repeatedly told companies they are not interested in their product.”CMS officials said medical equipment firms are not supposed to call people unless they have had prior contact and written permission to do so. Laurence Wilson, director of CMS’ policy group on chronic care, said that the anti-fraud program has been expanded and new requirements for competitive bidding for such equipment began last year.
As a result of those new requirements, he said, the cost of some medical equipment billed to Medicare had gone down. As an example of a nationwide trend, he said the average payment for a standard wheelchair in the St. Louis region had decreased by about $2,000 last year, with the cost to beneficiaries reduced by about $400.
McCaskill’s panel asked the heads of two of the medical equipment firms whose representatives had made calls in Missouri to testify under oath at the hearing, but they declined. An angry McCaskill said she and Johnson will consider compelling the witnesses to attend a future hearing on the topic.
“These companies are profitable for one reason, and that is the American taxpayer,” McCaskill said.
While CMS officials outlined several initiatives that aim to cut back on such problems in Medicare and Medicaid, neither McCaskill nor Johnson were satisfied with the progress. They suggested that Congress might need to act.
“What is clear to me is that the law, as written, doesn’t appear to be working as intended to address the problems I am hearing about,” McCaskill said.