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AAHomecare and its members are committed to doing our part to stop waste, fraud and abuse in Medicare's home medical equipment sector, which has zero tolerance for illegal activity. This is why the Association proposed to Congress early in 2009 an aggressive, comprehensive 13-point anti-fraud plan. Many parts of that plan have been incorporated into legislation and Medicare policy, and the reduction of fraud related to home medical equipment and services in recent years is a tangible demonstration of our commitment to stopping fraud and abuse in Medicare.

AAHomecare is encouraged by the HHS Office of Inspector General's testimony before Congress in June 2010 that criminals have shifted away from the durable medical equipment sector. Unfortunately, criminals have moved into other areas of Medicare. But we can be thankful that better Medicare policies, support from the home medical equipment community, and greater enforcement of existing laws have been effective in flushing crime out of our sector.

In addition, AAHomecare has developed a Code of Business Ethics to highlight and promote the high standards practiced by homecare providers. The Code also incorporates current guidance and compliance standards as outlined by the Patient Protection and Affordable Care Act (ACA), as well as other regulatory and legal requirements relevant to home medical equipment companies.

Read AAHomecare's anti-fraud recommendations to the Senate Finance Committee (July 6, 2012).

AAHomecare's Anti-Fraud Plan

  1. Mandate Site Inspections for All New HME Providers. A July 2008 GAO report underscored the need for CMS to ensure that its contractors are conducting effective site inspections for all new applicants for a Medicare supplier number.
    Status: Under its final rule implementing provider screening requirements in Section 6401 of the ACA, CMS requires that the National Supplier Clearinghouse (NSC) conduct a site visit for all newly enrolling HME providers.

  2. Require Site Inspections for All HME Provider Renewals. All renewal applications should require an in-person visit by the NSC.
    Status: Under its final rule for Section 6401 of the ACA, CMS requires that NSC conduct a site visit for all HME providers upon revalidation of enrollment, which occurs every three years.

  3. Improve Validation of New Homecare Providers. Additional validation of new providers should be included in a comprehensive and effective application process for obtaining a Medicare supplier number.
    Status: Under its final rule for Section 6401 of the ACA, CMS set up three risk categories for providers. Newly enrolling HME providers are in the “high risk” category, which requires that they undergo additional screening, including fingerprinting and background checks.

  4. Require Two Additional Random, Unannounced Site Visits for All New Providers. Two unannounced site visits should be conducted by the NSC during the first year of operation for new HME providers.
    Status: Currently, the NSC must conduct at least one site visit. Agencies that accredit HME providers serving Medicare beneficiaries also must conduct a site visit as a part of accreditation.

  5. Require a Six-Month Trial Period for New Providers. The NSC should issue a provisional, non-permanent supplier number to new HME providers for a six-month trial period. After six months of demonstrated compliance, the provider would receive a “regular” supplier number.
    Status: H.R. 4872, the reconciliation bill passed along with ACA, contains a requirement in Sec. 1305 for a 90-day period of enhanced oversight for initial claims of HME providers. It requires a 90-day period to withhold payment and conduct enhanced oversight in cases where the HHS Secretary identifies a significant risk of fraud.

  6. Establish an Anti-Fraud Office at Medicare. CMS should establish an office with the sole mandate of coordinating detection and deterrence of fraud and improper payments across the Medicare and Medicaid programs.
    Status: In 2010, CMS created a new Center for Program Integrity, which serves as the focal point for fraud and abuse activities for national and state-level Medicare, Medicaid, and CHIP program integrity activities.

  7. Ensure Proper Federal Funding for Fraud Prevention. Increase federal funding to ensure that the NSC completes site inspection and other anti-fraud measures.
    Status: Anti-fraud efforts by Medicare and the Department of Justice have dramatically expanded and accelerated.  Congress has granted increased funding for CMS program integrity activities many times over the past three years.

  8. Require Post-Payment Audit Reviews for All New Providers. Medicare’s program safeguard contractors should conduct post-payment sample reviews for six months’ worth of claims submitted to Medicare by new providers.
    Status: The Durable Medical Equipment Medicare Administrative Contractors (DME MACs) now conduct post-payment audits.

  9. Conduct Real-Time Claims Analysis and a Refocus on Audit Resources. Medicare must analyze billings of new and existing providers in real time to identify aberrant billing patterns more quickly.
    Status: The Small Business Jobs Act of 2010, H.R. 5297, required CMS to implement a predictive modeling system similar to those used by credit card companies to track unusual billing patterns for Medicare claims. The CMS predictive modeling system went live on June 30, 2011, for all Medicare Part A and Part B claims.

  10. Ensure All Providers Are Qualified to Offer the Services They Bill. A cross-check system within Medicare databases should ensure that homecare providers are qualified and accredited for the specific equipment and services for which they are billing.
    Status:  CMS now has the ability to identify claims if the provider submitting the claim is not on file as qualified or accredited to provide the specific item or service.

  11. Establish Due Process Procedures for Suppliers. CMS should develop written due process procedures for the Medicare supplier number process, including issuance, denial and revocation of the Medicare supplier number. The procedures must include, for example, an administrative appeals process and timelines.

  12. Increase Penalties and Fines for Fraud. Congress should establish more severe penalties for instances of buying or stealing beneficiaries’ Medicare numbers or physicians’ provider numbers that may be used to defraud the government.
    Status: Sections 6402 and 6408 of the ACA include additional penalties for fraud.

  13. Establish More Rigorous Quality Standards. Ensure that all accrediting bodies are applying the same set of rigorous standards and degree of inspection to their clients.
    Status: AAHomecare has proposed specific quality standards for negative pressure wound therapy items provided under Medicare.

In recent years, AAHomecare has endorsed anti-fraud legislation such as the Prevent Health Care Fraud Act of 2009 (S. 2128), and its companion bill in the House, H.R. 4222, which contained a number of key recommendations from AAHomecare’s anti-fraud proposals including implementation of real-time data monitoring technologies to detect fraudulent claims, increasing site inspections to ensure that Medicare allows only legitimate providers to file claims, and a dedicated office at the federal government level to combat Medicare fraud.  

In 2011, the Association endorsed H.R. 3399, the Medicare and Medicaid Fighting Fraud and Abuse to Save Taxpayers' Dollars Act (FAST Act), which would establish a workable prior-authorization program for power wheelchairs.

To learn more about stopping Medicare fraud, visit To report suspected Medicare fraud call the Inspector General’s toll-free hotline at 800-447-8477 (800-HHS-TIPS). The toll-free TTY number is 800-377-4950.