An estimated ten percent of Medicare billings are inflated or fraudulent, and durable medical equipment fraud (DME fraud) is a big culprit. Delivering or providing unnecessary medical equipment wastes Medicare funds and even limits the availability of medical supplies and equipment for those in need.
DME fraud includes fraudulent billing of all types of durable medical equipment such as wheelchairs, prosthetic devices, portable oxygen tanks, and orthotics, just to name a few.
There are many fraudulent schemes by durable medical equipment companies. One common form of DME fraud is providing unnecessary equipment to Medicare recipients/patients. In order to bill Medicare or Medicaid for durable medical equipment the company must certify that it was medically necessary; it is not enough that the equipment is convenient or useful, it must actually be medically necessary for the Medicare recipient to be reimbursed by Medicare. If the DME company lies or provides false information about the medical necessity, it is considered durable medical equipment fraud.
Another common form of DME fraud is billing Medicare for DME not actually provided. Some companies obtain names and addresses of Medicare recipients and bill Medicare for equipment it never sends, knowing that Medicare does not audit or verify that the DME was actually delivered. Variations of this scheme include providing the equipment to those not eligible for Medicare or Medicaid, but still billing the government.
Other durable medical equipment fraud schemes include paying kickbacks or referral fees for patients. Many DME companies pay hospitals, doctors, nursing homes and other healthcare providers a finder’s fee or referral fee if they refer Medicare patients to them; even though the Medicare or Medicaid recipient may need DME, it is unlawful to pay kickbacks or referral fees to gain new customers. Paying a referral fee or giving anything of value in exchange for a referral is considered Medicare fraud.
Medicare reimburses durable medical equipment companies based upon the item provided to Medicare recipients. Medicare has a code system with different rates for different models or types of durable medical equipment. The DME company must certify as to the code being used that reflects the actual DME provided. Billing for a higher code or grade of equipment than actually provided, a practice known as "upcoding", often goes undetected because the Medicare recipient may actually receive equipment without knowing that the DME company has billed for more expensive equipment than delivered.
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