PITTSBURGH -- Medicare is taking aim at questionable medical claims again, this time by requiring pre-approval for a number of medical devices that patients use in the home.
Critics say the new policy will bog down the process for getting oxygen, power wheelchairs and a variety of other supplies to patients -- items they need to keep from being readmitted to the hospital. But citing years of abuse from inflated claims, Medicare anticipates savings from the initiative of $10 million in 2016, rising to $100 million by 2025, without hurting patient care.
Penny Carey, president of Allegheny Health Network's home medical equipment arm, is among the people who question the new policy.
"I don't see how it can bring value to the consumer because you're adding another regulatory burden," she said. "I'm hoping it won't, but if receiving authorization delays care, then the patient suffers."
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Starting Feb. 28, Medicare will require pre-authorization for some of the most commonly used home medical supplies, including oxygen, sleep apnea and related equipment in a strategy that commercial insurers have used for years to curb overuse of medical testing.
Seniors who have traditional Medicare fee-for-service will be affected by the new policy. People with Medicare Advantage health coverage will not be affected, because those plans contract independently with providers.
Medicare last year spent about $6.3 billion on medical equipment that is needed at home to treat an illness or injury, significantly lower than the more than $7.4 billion the government spent in 2013. Requiring vendors to bid on supplying patients living in certain areas with specific kinds of equipment is credited for much of the savings.
And Medicare has had remarkable success with the pre-authorization lever in curbing power wheelchair claims. Claims for the mobility devices shrunk by one-fourth in the period from September 2012 to August 2015, according to Medicare. The pilot was conducted in 19 states and will be part of the program expansion that goes into effect nationwide next month.
Home medical equipment claim fraud is the stuff of legend. Medicare estimates that the agency improperly paid $1 billion for these claims between April 2006 through March 2007, at least partly due to fraud.
Separately, stolen beneficiary and physician identification numbers were used during a five-month period starting in October 2006 to bill the government $5.5 million from three home medical equipment offices, one of which was a utility closet containing buckets of sand mix, road tar and a large wrench -- but no office equipment.
Providers acknowledge past abuses in the industry, but say that complicating patients' ability to get medical equipment is not the answer.
"It's a big deal," said Tammy Zelenko, president and CEO of Bridgeville-based AdvaCare Home Services, which has four stores in the Pittsburgh area. "It's going to have a greater impact on hospitals and patients than the durable medical equipment world.
"The beneficiary isn't going to get what they need."
Some hospital beds, power wheelchairs and oxygen concentrators are among the devices that will require pre-authorization from Medicare starting Feb. 28. Medicare said it would answer requests for approval within 10 days, with a provision for expedited review within two days.
Tom Sedlak, executive director of the Harrisburg-based Pennsylvania Association of Medical Suppliers, called the new rules a mixed bag, saying it may be too early to say whether unnecessary claims will be reduced or patient care affected.
"It could work," Sedlak said. "Is it realistic in all hospitals? No.
"We have to try to educate our physicians and case managers at hospitals."