Page 10 - HME Business, May 2019

News / Trends / Analysis
“If a lead generation company or a marketing company approach a DME supplier about providing leads, the first thing the DME supplier should do is talk to a healthcare attorney.”
— Jeffrey S. Baird, Esq., Brown & Fortunato, P.C.
beneficiaries telling them they could qualify for a brace. Then the companies would engage physi- cians to interview those beneficiaries over the phone and write prescriptions for braces which a DME involved in the scheme would fill and ship to the beneficiary. The DME would then file a claim with Medicare and pay the telemarketer, which would pay the physician.
“... Ultimately 95 percent of them would result in the physician ordering one, two, sometimes three or four braces for these people, and then writing in the progress notes saying that,” says Wayne van Halem, president and founder of industry audit consulting firm The van Halem Group, and a veteran of CMS’s program integrity agencies. “But, here’s the thing, most of the time, you have to be examined in person for a knee brace, for example. There has to be a test that can only be performed in person.
“So, these doctors were just essentially calling all these people, talking to them for a few minutes and then writing orders for braces for them,” he continues. “And they were getting paid by the marketing companies, and the DME companies were paying the marketing companies. ... So, the DME company essentially was paying a kickback because they were paying the marketing company and the marketing company is paying the doctor. Even if it’s indirect, it’s still a kickback.”
Something Smelled Very Rotten
The news did not come as a surprise to many in the industry, because the avalanche of telemarketing calls across the nation indicated to even casual observers that something was amiss.
Craig Rae of Salisbury, N.C. mobility and accessi- bility provider business Penrod Medical Equipment called the scheme “flagrantly obvious” given the massive phone and marketing outreach.
“These crooks built a scheme that modeled
the now defunct, fraudulent Scooter Store,” he said. “They ran a TV campaign ‘Ask how you might qualify for a knee or back brace at little or no cost to you.’ They badgered millions of Americans with telemarketing calls (I know — I got dozens of them), trying to qualify people for ‘free’ back and knee braces.”
The questions on industry minds were who was behind the effort, and what were the authorities doing to stop it? To raise public awareness of the issue, the American Orthotic Prosthetic Association
(AOPA) released a statement in late March expressing concerns over the practice of delivery of braces and related equipment via lead generation marketing efforts.
Tom Ryan, president and CEO of the American Association for Homecare said his organization had been preparing a similar public awareness state- ment in the hopes of prompting a government response when news of the crackdown hit, much to his relief, he said.
“These were people who were crooks from the beginning and crooks to the end, and it’s a shame it took this long but I’m sure it was quite a compre- hensive operation by all the groups involved, and it couldn’t have happened soon enough for me,” Ryan said.
The Tip-Off
What likely alerted Federal authorities that some- thing was wrong was a combination of complaints and data analysis, according to van Halem.
“I think it was most likely initially identified by data analysis, because the volume of claims for back and knee braces has increased drastically over the past several years,” he explained. “Even commer- cial payers were seeing the same thing and started looking into it.”
Moreover, if CMS sees a recently purchased PTAN or a new PTAN suddenly start billing a high volume of claims for those items for patients all over the country, it’s further confirmation that something is not right. And if all the claims are coming from the same physician, who is nowhere near the majority
of those patients, the red flags become that much more glaring.
In addition to the data, complaints from bene- ficiaries and the industry also alerted Federal authorities.
“I know a lot of beneficiary complaints come to pass with this,” van Halem said. “So it was likely
a combination of internal data analysis, but also complaints that were received.”
As for the gap between when beneficiaries and DME professionals started reacting to the tele- marketing tsunami and when arrests were finally announced, it’s important to consider the scale of the fraud. The operation was extensive, according to the DOJ, which reported that some of the defen- dants allegedly controlled an international telemar- keting network involving call centers in locations as
far-flung as the Philippines and Latin America. Add to that the network of telemedicine physicians and DME companies, and a complex web of players comes into focus.
“The breadth of this nationwide conspiracy should be frightening to all who rely on some form of healthcare,” said IRS-CI Chief Don Fort. “The conspiracy described in this indictment was not perpetrated by one individual. Rather, it details broad corruption, massive amounts of greed, and systemic flaws in our healthcare system that were exploited by the defendants.”
Staying Vigilant
One industry expert who has regularly reminded providers that they cannot engage in these sorts of practices is industry attorney Jeffrey S. Baird, Esq., the chairman of the Health Care Group at law firm Brown & Fortunato, P.C.
“I’m not surprised at all,” he said. “For several years now, I have stated in webinars that I’ve given at conferences and in articles that I’ve written — I have warned anybody who would listen — that this type of arrangement is fraudulent. Going way back to the very beginning when these types of arrangements first started popping up several years ago, I went out publicly and said, ‘You just can’t do this.’ But I guess that the allure of making a quick buck is strong and I guess a lot of folks just threw reason and logic to the wind, and said, ‘We’re going to do it anyway.’”
While headline-making kickback scams such as Wheeler-Dealer have originated from this industry before, Baird said he believes this recent news might finally see an end to the practice.
“Now that this has come out, where it’s obvious that the government is going after the players in
this type of arrangement, I think it’s going to cause the vast majority of players out there to immediately stop,” he explained. “... It’s a one-two punch: the fact that we have this criminal investigation going on now, plus the fact that the back and knee braces will be part of competitive bidding, I think that this party has come to an end.”
That said, for any providers still unclear on where the “thin ice” of referral relationships begins, Baird offered two key reminders — perhaps it would be better to call them warnings — for providers encoun- tering such arrangements:
“Number one, if a lead generation company or a marketing company — basically the same thing —
if they approach a DME supplier about providing leads, the first thing the DME supplier should do is talk to a healthcare attorney to see if this is the type of arrangement the DME supplier should go into,” he advised.
“Number two, if the DME supplier is receiving physician orders basically from geographical areas outside of the DME company’s business area, then the DME company needs to ask if these physician orders are a result of telehealth,” Baird explained. “And if the answer is yes, then again, the DME
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