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Casting a wide net for fraud prevention ensnares innocent bystanders


In the 1980s and 90s, driftnet fishing was a common technique used to catch salmon, tuna and other types of fish. It was an incredibly effective and efficient commercial fishing method. The nets, which were as long as 50 kilometers, created a wall in the ocean that easily ensnared thousands of fish in a short period of time.

The problem with the driftnets was that they were too effective. For as much tuna and salmon they caught, there was just as much "bycatch"–marine animals that were unintentionally caught in the net along with fish. Bycatch included whales, sea turtles, seals, and perhaps most commonly, dolphins.

Millions of dolphins and other marine animals were killed using this method, so, eventually, the United States enacted laws to prevent the widespread use of driftnet fishing that was causing so much environmental harm. The risk-reward was clear: Yes, driftnets were an absurdly effective way to catch fish, but the consequences were simply too devastating.

The same could be said for the government's driftnet approach to durable medical equipment (DME) fraud prevention that casts an impossibly wide net, ensnaring innocent bystanders in an effort to catch all the fraudsters.

The most recent example of this approach is currently playing out in a public battle between Medicare and amputees who are concerned they will no longer qualify for necessary prosthetics thanks to a proposed Local Coverage Determinations (LCD) published by DME Medicare Administrative Contractors (MAC) in June.

Last month, a group of 150 amputees gathered outside the Department of Health and Human Services protesting the proposed rule, according to The Washington Post. They held up signs that read, "Honk if you like your limbs. We do too!" and "Get your hands off my legs!"

Their main concern is that the proposed regulation is chock full of much more restrictive language that would deny lower limb prosthetics to beneficiaries who actually need them. To their point, portions of the regulations are over the top, at best, and at worst, ridiculous. The proposed updates would deny equipment to beneficiaries if they also use a cane, crutches or a walker, if they haven't completed a rehab program, or if the prosthetic doesn't provide the patient with "the appearance of a natural gait."

Additionally, medical documentation must indicate the beneficiary has passed cognitive, cardio-pulmonary and neuromuscular evaluations, and critics say the regulations could also limit coverage for more advanced prosthetics.

Amputees such as Adrianne Haslet-Davis, a professional ballroom dancer who lost her left leg in the Boston Marathon bombing, are concerned that private insurers that frequently take their cues from Medicare will adopt these more restrictive coverage requirements. 

"I understand they want to cut costs, but how they want to do it will devastate," she told The Post.

It's easy to connect the dots on this one. DME fraud has plagued government programs for some time, and although the preferred target for fraudsters has been power wheelchairs, fraud schemes involving prosthetics have been known to reach hundreds of millions of dollars. A 2011 report released by the Office of Inspector General (OIG) found that Medicare inappropriately paid an astounding $43 million for lower limb prostheses that did not meet certain coverage requirements in 2009. An additional $61 million was paid out to beneficiaries who hadn't visited their referring physician in five years. The OIG found that 267 suppliers had questionable billing practices, including claims submitted for a high percentage of beneficiaries with no history of amputation.

One of the OIG's six recommendations called on the Centers for Medicare & Medicaid Services (CMS) work with MACs to revise the LCDs. The other five pointed to necessary improvements to screen providers, monitor claims and take action on those with questionable billing practices.  

The proposed LCDs serve as a "driftnet approach" to fraud, an approach that will likely solve these overpayment concerns, but at a potentially devastating cost to innocent bystanders who will be entangled in the enormous net.  

There's no question that DME fraud is a pervasive problem that costs Medicare, and private insurers, millions each year, but CMS and MACs should focus on more prescriptive fraud fighting efforts to root out and eliminate fraudulent providers with questionable billing patterns. Using the power of predictive analytics to monitor DME claims for artificial limbs is a much more efficient and judicial way to eliminate pervasive fraud.

In other words, they might be able to catch more fish, and fewer dolphins. - Evan (@HealthPayer)