I’m usually tough on the durable medical equipment industry but there are times when I do go soft. An article appeared today on Bloomberg.com that is titled “Medicare Cuts Off California, Florida Home Equipment Suppliers”
The article which sources a Medicare press release goes on to insinuate that these dealers might not be running legitimate operations:
“Many of the companies that lost their privileges did so after failing to reapply to the agency as required during the “demonstration project,” Brandt said.
“A lot of these are storefront shams,” she said. The bonding requirement, set to take effect in May 2009 for new suppliers and October for existing suppliers “is another tool in our toolbox to help us fight Medicare fraud.”
OK, over one thousand area suppliers failed to reapply and lost their Medicare supplier status. No where does the article or the Medicare press release state that any of these small companies were fined or taken legal action against. If in fact they were “storefront shams” then you would expect that some legal action would be taken. The fact that many suppliers chose not to apply may just as easily demonstrate that they no longer desire to be Medicare suppliers.
I have known many small DME owners and all have stated their opinions on their difficulties in being Medicare suppliers. The profits are almost non-existent and the increased cost due to red tape and processing are crushing. The risk is also high. An honest mistake on the part of the supplier could easily result in accusations of fraud, fines, legal actions, or loss of supplier status. The Medicare rules and demands are ever changing as are the reimbursement rates and at times are near impossible to stay up on. Now add to that the need for a small business to post a $50,000 surety bond for Medicare to tap almost at will and you have a situation that may have many suppliers grabbing a parachute.
The article states that there were 5,600 dealers involved out of which 1,139 did not re-apply. That’s about 20 percent of the total who opted out. Are we to believe that 20 percent of the industry has been running a “storefront sham”? And if we do, where does that place Medicare on our competency scale? I would think somewhere between asleep and incompetent.
