HME Community Rallies Around Hobson-Tanner Bill
WASHINGTON--HME leaders are mobilizing to drum up early support for the newly introduced Hobson-Tanner bill, which many stakeholders say will help level the playing field when competitive bidding takes effect.

Under the MMA, competitive bidding, or "competitive acquisition" as the government calls it, is scheduled to begin in 10 of the country's largest metropolitan statistical areas (MSAs)--but not necessarily the top 10--beginning in 2007 and expand to others in 2009.

Introduced by Reps. David Hobson, R-Ohio, and John Tanner, D-Tenn., the legislation would not repeal competitive bidding, but would make changes to the MMA's structure to ensure beneficiaries' access to DME and protect small providers as follows:

• The MMA allows contracts with only as many providers as deemed necessary by the HHS secretary to meet the demand of the bid area. Any provider not awarded a contract would be prohibited from participating in Medicare for up to three years. The Hobson-Tanner bill would allow small businesses that do not receive a contract to continue to provide DME at the winning bid rate as long as they have submitted a reasonable bid.
• The MMA explicitly prohibits administrative or judicial review for competitive acquisition of DME. This means that providers do not have legal recourse to appeal the bid amount or contracts. The Hobson-Tanner bill would restore appeal rights, which exist elsewhere in the Medicare program, for competitive acquisition of DME.
• Under the MMA, an item can only be competitively acquired if doing so would result in significant savings to Medicare. The Hobson-Tanner bill would require the government to show that competitive acquisition of an item would result in savings of at least 10 percent.
• Under the MMA, the bid rates in one MSA can be used to set the reimbursement for another MSA. The Hobson-Tanner bill would require that before doing so there must be a comparability analysis of the two MSAs, which would help prevent any applications of bid rates outside of an MSA that are inappropriate.

CMS Sets October Deadline for HIPAA-Compliant Claims
BALTIMORE--Beginning Oct. 1, CMS will no longer process claims not compliant with the Health Insurance Portability and Accountability Act, Administrator Mark McClellan announced Thursday.

The original deadline for HIPAA-compliant transactions--designed to allow for interoperability among payers and providers by generating identical claims using standard formats and coding--was Oct. 16, 2003. But CMS put the enforcement plan on hold because only about 31 percent of Medicare claims were compliant at the time.

On July 5, the agency stopped accepting paper claims, except for those meeting certain exemption criteria, but will continue to accept claims with non-HIPAA compliant code sets until October.

Now it appears that most health care providers are on board. As of June, only about 0.5 percent of Medicare fee-for-service providers submitted non-HIPAA compliant electronic claims, according to CMS.

"We are firmly committed to an interoperable electronic health care system, and the close-to-100-percent compliance with HIPAA standards for claims shows that the health care industry shares this commitment," McClellan said.

A survey released Aug. 1 by the Healthcare Information and Management Systems Society indicated lower levels of HIPAA compliance overall in the health care industry. The survey found that 78 percent of health care providers and 90 percent of payers are compliant with HIPAA transactions and code sets. The same number are compliant with the law's security rule, which took effect two years ago, the study said. An average of 55 percent of both groups said while their information systems can produce transactions, their trading partners can't accept or transmit them.

For more information, visit www.cms.hhs.gov/hipaa.

GAO Report Raises New Concerns About ALJ Transfer
WASHINGTON--A new GAO report has raised additional concerns that HHS has not taken adequate steps to ensure fair and accessible appeals for denied claims.

The Medicare appeals process, which was formerly under the jurisdiction of the Social Security Administration, was transferred to HHS in July as required by the MMA.

In the Aug. 1 report, the GAO criticized HHS' handling of the process, claiming that it offers limited access to in-person hearings, is suffering staffing shortages, has not yet fully implemented a case-tracking system and has not established a contingency plan for the transfer. HHS has four hearing location sites--Arlington, Va.; Miami; Cleveland, Ohio; and Irvine, Calif.--compared to 141 when appeals were handled by Social Security.

In place of in-person hearings, HHS is using videoconferencing technology in more than 1,000 cities for most appeals. While HHS claims this will speed up the process, the GAO is concerned about the agency's reliance on this technology.

Sens. Charles Grassley, R-Iowa, and Max Baucus, D-Mont., who had expressed concerns prior to the move (see HomeCare Monday, April 4), are putting pressure on the HHS to take action.

"This new report says that many of the same shortcomings described last fall still exist and threaten the entire appeals process," Grassley said. "We need to stay on top of the transfer process to make sure the current failures by the Department of Health and Human Services do not continue. The new system needs to work in the interest of beneficiaries, not against them."

To view the GAO report, click here.

Alleged Fraud Fugitive Captured in Mexico
MIAMI--A man accused of heading up a multi-million dollar Medicare fraud scheme before fleeing to Mexico was brought back to the country and arraigned July 20, the U.S. Attorney for the Southern District of Florida has announced.

According to a release from the U.S. Attorney's Office and the Miami field offices of the FBI and the IRS:

Lazaro Betancourt, along with six others, was indicted in July 2004 for submitting false DME claims to Medicare and paying kickbacks and bribes to patient recruiters for fictitious patients. Betancourt owned three fraudulent DMEs--Venenic Medical Supplies, MCM Medical Equipment & Supplies and 21st Century Medical Equipment Corp.--but used straw owners to conceal his identity.

When Betancourt learned of a federal investigation into his activities in late 2002, he fled the country. On July 1, the FBI learned that Betancourt had been taken into custody in Cancun, Mexico, on unrelated charges, and the Justice Department's Office of International Affairs worked with the Mexican government to return him to the United States. When he was placed on a flight to Miami on July 14, he attempted to escape and told agents that they would have to shoot him before he would return to the U.S.

Last year's indictment charges him with being the leader of a $7 million health care fraud and $4 million money laundering ring. If convicted on all 79 counts of the indictment, Betancourt faces a maximum of 490 years imprisonment.

To date, more than 40 individuals have been convicted as a result of this investigation into Medicare DME fraud in Miami-Dade County.

To revisit this news any time during the week, go to http://www.homecaremonday.com.

In Brief
Kristen Connors was recently crowned the new Ms. Wheelchair America. The 33-year-old Cranston, R.I., resident uses a wheelchair because of spinal muscular atrophy. "My main goal is to put a face on disability," she said. "Although I do have a disability and it is part of who I am, it is not what I am." Connors is a constituent case worker for Rep. James Langevin, D-R.I. (The congressman, who also is in a wheelchair, has pushed to fight Medicare's in-the-home restriction for coverage of mobility equipment. A letter from Langevin and Rep. Charlie Bass, R-N.H., asking HHS Secretary Michael Leavitt to modify the policy has gathered more than 60 signatures in the House.) During the next year, Connors will be traveling the country to raise awareness for disabilities and "change people's attitudes. That's one thing we can't change by making laws," she said.

Medicare payments to nursing homes will increase by $20 million in 2006 under a final reimbursement rule for skilled nursing facilities, CMS announced. The final rule, published in the Federal Register Aug. 4, is an improvement over earlier forecasts that predicted no increase for long-term care providers next year.

Sen. Charles Grassley, R-Iowa, has proposed legislation that would allow tax deductions and credits for those who purchase qualified long-term care policies. The Improving Long-Term Care Choices Act, co-sponsored by Sens. Evan Bayh, D-Ind., and Hillary Rodham Clinton, D-N.Y., also would allow states to offer home-and community-based services as part of their state Medicaid plans; expand a long-term care partnership that currently operates as a demonstration program in four states; and prohibit states from considering benefits paid under a long-term care insurance policy when determining eligibility for Medicaid. The text of S. 1602 is available at http://thomas.loc.gov.