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Headline News
Rep. Thomas Announces Retirement
BAKERSFIELD, Calif.--Rep. Bill Thomas, the House Ways and Means Committee chairman who has been at odds with the HME industry for years, announced last week that he will not seek re-election. The California Republican's current term, his 14th, ends in nine months.

During his tenure, Thomas, 64, was instrumental in passage of a number of measures that have been considered damaging to HME, most notably the Medicare Modernization Act, which included a DME competitive bidding provision. And in the recently passed Deficit Reduction Act, he was successful in inserting a last-minute provision to cap Medicare oxygen rental at 36 months--after both the Senate and House of Representatives had passed versions of the bill without it (see HomeCare Monday, Jan. 9).

Thomas, who has served in Congress since 1979, became famous for his temper and clashes with colleagues, sometimes with Senate counterpart Charles Grassley, R-Iowa, chairman of the Senate Finance Committee, over policy and procedures. Under House rules, Thomas has to step down at the end of this term as chairman of the powerful Ways and Means Committee--a position he has held since 2001.

While Thomas will be leaving, some industry advocates are concerned he could propose other measures before his retirement that could hurt HME.

"I have no delusions that all of a sudden he's going to go away," said John Gallagher, vice president of government relations for Waterloo, Iowa-based VGM Group and spokesman for Last Chance for Patient Choice, a non-profit group that staged a late January protest outside Thomas' Bakersfield, Calif., office.

"While we're doing the jig and the happy dance, we still have nine months. We've got to make sure we don't get hit again," Gallagher warned.

Cara Bachenheimer, vice president of government relations for Elyria, Ohio-based Invacare Corp., agreed that it's not time to breathe a sigh of relief just yet. "We still have a big year. Lots of things could develop during 2006. Even after Chairman Thomas retires, the industry has its work cut out," she said. "We need to make the extra effort, member by member, to educate them about the value and services we provide that enable consumers with acute and chronic conditions to live a better quality of life in their homes."

Senate Committee Approves Budget without Medicare, Medicaid Cuts
WASHINGTON--The Senate Budget Committee approved a version of President Bush's FY 2007 budget Thursday without Medicare and Medicaid cuts.

The administration's budget proposal calls for a number of Medicare reductions--including a 13-month cap on Medicare oxygen equipment rentals (see HomeCare Monday, Feb. 13)--estimated to save the health care program $2.5 billion in 2007 and $35.9 billion over five years.

But in the Senate committee's version, Medicare would receive $382 billion in 2007, a $55 billion increase over its funding this year. The measure now moves to the full Senate, where debate could begin as early as today.

Although some lawmakers are hesitant to cut Medicare in an election year, there is pressure to trim spending for entitlement programs to help reduce the nation's deficit.

Senate Budget Committee Chairman Judd Gregg, R-N.H., said that passing the Senate version will be a challenge. Democrats have blasted the plan and, according to press reports, it isn't faring much better with some Republicans. "I'm not going in with the votes, I can tell you that much," Gregg told The Associated Press. "There's a high level of angst and indecision out there."

Before the committee vote last week, the American Association for Homecare delivered letters to both Senate and House budget committee members expressing opposition to the 13-month cap proposed in Bush's budget and the 36-month oxygen cap in the Deficit Reduction Act. And, according to the association, Sen. Michael Crapo, R-Idaho, led an effort to prevent home oxygen from being a target in the Senate bill. "As chair of the Congressional COPD Caucus, Sen. Crapo understands the importance of medical oxygen therapy to millions of Americans who suffer from respiratory disease," said Michael Reinemer, the association's vice president for communications and policy.

In light of the current and proposed cuts, AAHomecare is conducting a survey to quantify the costs associated with provision of medical oxygen, as well as other overhead costs such as compliance with state and federal regulations. The deadline for submitting the survey has been extended to Friday. To receive a copy, contact Ashley Ridlon at ashleyr@aahomecare.org or (703) 535-1894.

Matria to Pay $9 Million to Settle Medicare Fraud Allegations
MARIETTA, Ga.--DME supplier Matria Healthcare and subsidiary Diabetes Self Care have agreed to pay the government $9 million to resolve allegations of Medicare fraud raised in two qui tam actions filed under the False Claims Act.

Matria sold Roanoke, Va.-based DSC, which provided mail-order diabetes supplies and DME such as blood glucose monitors and testing strips, in June 2004, but the purchaser did not assume liability for the claims asserted in the lawsuits.

The allegations stem from separate whistleblower actions filed by Kim Politsky, formerly DSC's reimbursement director at Matria's Georgia headquarters, and Sandra Clarke, a customer service supervisor for DSC in Virginia.

The settlement resolves allegations from the two former employees that from 1998 through 2003, the defendants:
--billed the government prior to obtaining a valid physician's order, assignment of benefits or CMN;
--failed to credit Medicare for returned DME;
--billed Medicare for shipment of duplicate orders, overshipped or undershipped DME or unordered DME;
--failed to maintain required signature logs for DME shipments;
--falsely created or altered documentation to support shipments;
--failed to maintain proof of delivery;
--falsified or changed dates of service, dates of shipment or dates of request related to shipments;
--improperly billed Medicare for blood glucose meters;
--made false representations regarding eligibility to participate in various state Medicaid programs; and
--falsely billed for items shipped from a California location without a valid Medicare supplier number.

According to a statement from Bothwell & Simpson, PC, Roswell, Ga., which represented Politsky, Clarke's complaint also alleges that DSC billed Medicare for items shipped to patients who were dead, and that she was retaliated against after raising concerns about the billing practices.

"These cases were compelling, because you had two different employees, working for different parts of a company in different states, raising basically the same issues regarding the defendant's improper billing practices," said attorney Mark Simpson.

Under the settlement agreement--in which neither the U.S. denied the grounds for its case nor Matria acknowledged any liability--Clarke will receive $1.2 million and Politsky will receive $792,000.

The False Claims Act, enacted during the Civil War, is a primary tool used by the government to fight fraud and abuse in federal programs and procurement, allowing it to recover triple the amount of its damages plus civil penalties, according to a U.S. Department of Justice release.

Health Care Whistleblowers Cashing In, GAO Finds
WASHINGTON--The greatest share of False Claims Act whistleblower cases are health care fraud cases, the Government Accountability Office has reported.

And health care fraud cases also are the most profitable for whistleblowers.

Of a total 2,490 FCA whistleblower cases closed and unsealed from 1987 through 2005, 1,145 health care fraud cases were filed, the GAO said in its report, "Information on False Claims Act Litigation."

With a total of $5 billion from 385 recoveries, health care fraud qui tam recoveries were the largest of any type of fraud. According to the GAO, the total share amount for whistleblowers in those health care fraud recoveries was $841 million.

The report was issued after Sen. Charles Grassley, R.-Iowa, chairman of the Senate Finance Committee, and Reps. James Sensebrenner, Jr., R-Wis., and Chris Cannon, R.-Utah, requested information concerning the relationship between the government and whistleblowers in prosecuting FCA qui tam actions.

Of the $15 billion the government recovered under the FCA from 1987 through 2005, $9.6 billion was for recoveries related to qui tam actions filed by whistleblowers, the GAO said.

The GAO found that agencies with the Department of Health and Human Services and the Department of Defense were named more regularly than other federal government agencies as alleged victims of fraud in FCA cases--59 percent for HHS and 29 percent for the DOD.

Growth in cases filed also was addressed in the findings: In 1987, HHS was named as the alleged fraud target in four qui tam whistleblower cases, while in 2005 that number had increased to 270. To access the GAO report, click here.

CMS Warns of Medicare Scam
BALTIMORE--CMS is warning seniors and people with disabilities to be aware of a scheme that asks Medicare beneficiaries for money and checking account information to enroll them in a nonexistent prescription drug plan.

The scheme is called the "$299 Ring" for the typical amount of money Medicare beneficiaries are talked into withdrawing from their checking accounts.

Medicare has received complaints from Indiana, Michigan, Pennsylvania, Massachusetts, New Jersey and Georgia. Complaints have been made against a number of different companies, but authorities believe that the companies are the same and are typically based outside the country.

No Medicare drug plan can ask a person with Medicare for bank account or other personal information over the telephone, CMS explained in an alert issued last week. Additionally, legitimate Medicare drug plans will not ask for payment over the telephone or the Internet. They must bill the beneficiary for the monthly premium. Typically, that amount is set up as an automatic withdrawal from the beneficiary's monthly Social Security check. Beneficiaries may also opt to pay the monthly premiums in other ways such as writing a check or setting up automatic payments from their checking accounts.

Consumers can report these cases their local police department or call (877) 772-3379.

In Brief
When applying for a National Provider Identifier, CMS is recommending that providers include their legacy identifiers not only for Medicare but for all payers. If reporting a Medicaid number, it is also advisable to include the associated state name. For more information on the NPI, visit www.cms.hhs.gov/NationalProvIdentStand. For more information on NPI outreach, including upcoming meetings, visit the Workgroup for Electronic Data Interchange NPI Outreach Initiative Web site by clicking here.

AAHomecare plans to set up an office on Capitol Hill during its Legislative Fly-In, June 19-20, so that members of Congress and their aides can meet with the oxygen beneficiaries and become familiar with oxygen technology. For patients who are unable to travel to Washington, a virtual lobby day will be set up to allow them to participate in the lobbying and education effort from home. More details will be announced in the near future.

President Bush is likely to nominate the acting FDA Commissioner Andrew Von Eschenbach as permanent commissioner, the Wall Street Journal reported. Von Eschenbach, director of the National Cancer Institute, took a temporary leave of absence from his post to take the FDA position after Lester Crawford resigned in September.

Medtrade Spring is scheduled March 21-23 in Las Vegas. If you'll be attending the show, stop by to meet the HomeCare staff at Booth 1241 and sign up for your free subscription. For more information, visit www.medtradespring.com.

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