Federal officials are investigating about 100 nursing homes and equipment dealers on suspicion that they fraudulently billed the government as much as $170 million for incontinence supplies in 1993.
HHS Inspector General June Gibbs Brown announced the probe last week. She said Medicare spending for incontinence supplies jumped to $230 million in 1993 from $88 million in 1990. During that time, the number of beneficiaries with claims for incontinence supplies dropped to 293,000 from 312,000, tipping off federal investigators.
"Obviously, there are some big gaps in the controls over nursing homes," Ms. Brown said. "We haven't concentrated on nursing homes in the past, but now that we are looking at them, we are finding big problems."
Of all payments made by Medicare for incontinence supplies in 1993, 55% were made by Blue Cross and Blue Shield of Florida. However, Ms. Brown would not say if the plan, which paid the federal government $10 million in August 1993 to settle charges that it mishandled patient claims, was being investigated.
The inspector general's office and the Department of Justice are pursuing both criminal and civil cases, Ms. Brown said.
Most of the problems, she said, involve the billing of items that do not meet Medicare coverage guidelines. Medicare covers only prosthetic devices and specifically excludes items such as disposable absorbent undergarments.
Federal investigators also found that suppliers were taking incontinence kits, which include several items such as syringes, gloves and saline solution, and billing the items separately. A kit costs suppliers about $4, according to Ms. Brown. If kits are unbundled, a supplier can receive as much as $20 in reimbursement. As many as three kits may be billed for each day, giving suppliers a potential compensation of $1,800 per month for each beneficiary.
Ms. Brown blamed most of the problem on suppliers, who often tell nursing homes that HCFA had changed its payment policy to allow payment for disposable items. However, Ms. Brown said, in most cases the nursing home should be aware that unethical billings are being submitted for their patients.
While the investigations continue, much of the problem may already be solved. In October 1993, HCFA began making payments for equipment through four regional carriers in order to better monitor and control home medical equipment outlays.