Medicare Revokes Billing Privileges of Over 1100 Medical Equipment Dealers

Just before the new year, representatives at Medicare and Medicaid announced that the billing privileges of more than 1100 suppliers of durable medical equipment were being revoked. This comes after a 2 year investigation into fraud allegations against home medical equipment suppliers, most of which are located in Florida and California.

According to Medicare Officials, many of the dealers who lost their billing privileges were knowingly defrauding Medicare, but some also failed to complete a required re-application process. The re-application process was part of Medicares 2007 demonstration project aimed at finding fraudulent dealers of Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS.) According to Medicare, fraudulent DMEPOS claims cost Medicare over $1 Billion in 2007.

While the demonstration plan was officially announced in 2007, government officials had been investigating durable medical equipment fraud for some time. They noticed that between 2002 and 2007, a disproportionate number of dealers opened up in Miami Dade County and Los Angeles County, with these dealers generating a large number of billings.

In 2006, the NSC visited around 500 DMEPOS dealers located in Southern Florida. At the end of this one week investigation, about 40% of these dealers had their Medicare Billing Revoked. By the end of 2006, over 600 DMEPOS distributors would have their billing privileges taken away.

The next year, in 2007, 938 durable medical equipment dealers lost their billing privileges, with over 80% of those dealers located in Florida.

This most recent move by Medicare resulted in 1,139 home medical equipment suppliers in South Florida and South California losing their billing privileges. This represents about 20% of all suppliers in this area. To many who have been following Medicares initiative to find fraudulent and less than reputable distributors of Durable Medical Equipment, this move comes as no surprise.

In addition to revoking billing privileges of these DMEPOS dealers, Medicare also announced the requirement of a $50,000 surety bond to be provided by most DMEPOS dealers.

While some say that the actions of Medicare will hurt honest business men, Medicare officials say it is needed to help control the Medicare Budget.

Durable medical equipment refers to many types of home medical supplies, including wheelchairs, glasses, and oxygen supplies. Recipients of Medicare can typically receive reimbursement for this type of medical equipment.
Source: Press Release