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How to protect patient needs and put unscrupulous DME companies on notice


Could you or your practice be at risk of complicity in Medicare fraud or abuse? The answer is almost certainly, YES.

We are an academic practice in the Georgia Health Sciences University, Augusta, with 26 interns and residents, and 21 full- and part-time faculty. About 32% of our patients are on Medicare. As such, we are an obvious target for companies engaged in systematic Medicare fraud and abuse. The following case is illustrative.

A 72-year-old patient complained to us about receiving harassing telephone calls to his home about purchasing  DME and a mobility scooter.  This patient walked up to 2 miles, four times a week, and was otherwise in excellent health. During further discussions with the patient, we determined this particular DME company requested that he submit paperwork to his primary care physician to complete. The patient did not need, nor want, this equipment and asked our advice on how to stop the telephone harassment.

Further investigation revealed our nurses and many of our physicians were bombarded daily with faxes and telephone calls from DME companies requesting power chairs, electric scooters, back braces, electric heated water pumps for back pain, and erectile dysfunction devices for patients. In many cases, these requests were bundled with legitimate-appearing requests for renewal of diabetic home glucose testing supplies. Multiple requests from multiple companies came for the same patients. When we contacted patients by telephone, some admitted they had signed on with a DME company that promised to deliver diabetic supplies, but others were quite surprised and denied ever requesting any of the services we were being asked to authorize. We even discovered multiple requests for an air mattress for a deceased patient.


Most Medicare payment errors are simple billing mistakes, not the result of a physician, provider, or supplier trying to take advantage of Medicare. Fraud occurs when someone intentionally falsifies information or deceives Medicare. A common example of fraud is purposely billing Medicare for services that were never provided or received by the patient.

Most physicians, providers, and suppliers are committed to providing high-quality care to patients and to billing Medicare only for the services provided. Unfortunately, a few individuals and companies are intent on defrauding or abusing Medicare.

Our experience, however, is unfortunately all too common. A recent Journal of the American Medical Association review estimates that outright fraud accounted for between $82 billion and $272 billion in wasteful healthcare spending in 2011, or potentially up to 21% of total national healthcare expenditures. 1

Examples of Medicare fraud are the following:

A healthcare provider bills Medicare for services never received by a patient.

A supplier bills Medicare for equipment never received by a patient.

Someone uses another person’s Medicare card to get medical care, supplies, or equipment.

Someone bills Medicare for home medical equipment after it has been returned.

A company offers a Medicare drug plan that is not approved by Medicare.

A company uses false information to mislead someone into joining a particular Medicare plan.


Abuse occurs when doctors or suppliers do not follow established medical practices and procedures that result in unnecessary costs to Medicare. It is important to distinguish fraud from abuse: Fraud is action with deliberate intent to cheat or deceive Medicare for illegal gain. Abuse may be intentional and coupled with fraud, but is more often the result of systematically poor medical management or sloppy recordkeeping.

Abuse is not the occasional, accidental billing error, but a systematic practice pattern that leads to overbilling and waste of Medicare services.  Abuse leads to improper payment, duplication of services, failing to discontinue services that are no longer medically necessary, or providing services or equipment that is not medically necessary.

 A number of federal statutes define Medicare fraud and abuse. Penalties for violations can be severe, including exclusion from participation in all federally funded healthcare programs, fines, and even imprisonment. 2

The Health Care and Fraud Prevention and Enforcement Action Team (HEAT) works in conjunction with local, state and federal agencies to combat Medicare fraud and abuse. HEAT Strike Forces have had a marked sentinel effect.3   

Though deterrence is difficult to quantify, there is empirical evidence that investigating and prosecuting healthcare fraud has resulted in reductions in improper claims to Medicare. For example: a Miami resident pleaded guilty to submission of more than $200 million of fraudulent claims to Medicare; a Houston healthcare company owner and operator of a DME company was sentenced to 30 months in prison for Medicare fraud, and ordered to pay $471,022 in restitution;4 and a Louisiana psychiatrist was indicted for Medicare fraud that spanned 5 years from 2004 to 2009 and included Medicare billings of $21 million.5


Could you or your practice be at risk of complicity in Medicare fraud or abuse? The answer is almost certainly, YES. The case of our 72-year-old patient led to an internal review of our practice and the realization that a systematic approach was needed to protect it and our patients. A policy was developed in open discussions with physicians, nurses, and medical records staff who were bearing the brunt of the paperwork deluge coming into the office. We recognized the need to meet legitimate patient needs and requests, while insulating our practice from inadvertent complicity with DME companies engaged in Medicare fraud or abuse.

We developed a standard operating procedure, which was communicated to all providers, nurses, medical records staff, and patients. Specifically, our policy states that,  “All requests for durable medical equipment and supplies (diabetes testing, mobility scooters, heating pads, back braces, mattresses, knees/elbow/ankle sleeves, etc.) will need to be initiated by the patient.  We will no longer sign faxed documents to our department that are from durable medical equipment companies, without the patient initiating the request first.” 

We educated all our staff on this policy and posted it on an electronic bulletin board that is clearly visible in our patient waiting area. This posting also includes the telephone number of the Medicare fraud and abuse hotline.


If a DME company calls our clinic with a request, we inform it of our policy, serve notice that repeated calls will be viewed as harassment, and such calls will be reported to the Medicare fraud and abuse hotline. We also immediately shred all faxes with requests for supplies or equipment that were not patient-initiated.

While we have not systematically tracked the results of our policy, we’ve substantially reduced the numbers of incoming faxes and telephone calls from DME companies. This has freed up our nurses and ancillary staff to concentrate on patient care. 


1. Berwick DM, Hackburth AD. Eliminating Waste in U.S. Health Care. JAMA 2012;307:1513-16.

2. Centers for Medicare and Medicaid, US Department of Health and Human Services. http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads//Fraud_and_Abuse.pdf Oct. 2011). Accessed June 5, 2013

3. Statement by Lewis Morris, Chief Counsel, Office of the Inspector General, Testimony before the Ways and Means Committee, Subcommittee on Health, US House of Representatives, June 15, 2010. http://www.hhs.gov/asl/testify/2010/06/t20100615c.html. Accessed June 5, 2013

4. U.S. Department of Justice. www.justice.gov/opa/pr/2012/March. Accessed June 5, 2013.

5. U.S. Department of Justice.  www.justice.gov/opa/pr/2012/February.  Accessed June 5, 2013.

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