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Durable Medical Equipment (DME) Healthcare Fraud


What is Durable Medical Equipment (DME) Fraud?

Durable Medical Equipment fraud is a major area of focus for the United States Department of Justice. The main target audience for legitimate DME equipment are older, Medicare patients. Durable medical equipment (DME) coverage. Generally Medicare Part B (Medical Insurance) covers medically necessary DME if it is medically prescribed by a Medicare-enrolled doctor or other health care provider.  DME fraud focuses on the prescribers who may be legitimate physicians seeking to create a secondary revenue stream by sharing in profits from the sale of DME goods. Other persons charged with DME fraud are the equipment suppliers who are often charged with paying kickbacks or with hiring locum MD's to write telemedicine prescriptions which are deemed unnecessary.

DME fraud charges against physicians include AKS and Stark violations. The basic concept is whether the MD is entitled to profit from the sale or is using a structure to appear to be selling when in fact the MD is simply a figurehead getting a kickback.

What are Durable Medical Items?

These are home use items. DME equipment includes Blood sugar meters and test strips, Canes, (CPAP) machines, Crutches, Oxygen equipment & accessories, Walkers, Wheelchairs & scooters among many other items.  In DME prosecutions older people are often solicited as customers or medically offices over prescribe DME equipment in exchange for a kickback.

Who Prosecutes DME Fraud?

The DOJ’s Fraud Section has a Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,400 defendants who collectively have billed federal health care programs and private insurers more than $27 billion.  There are also “no fly lists” for practitioners and suppliers so that through the Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG exclusions from Medicare reimbursement are imposed on entities even without a criminal charge or conviction.  

The prosecution of these crimes is a major focus of law enforcement and the Horowitz medical group represents physicians offices which are investigated or sanctioned after they dispense or receive reimbursement for these devices.

What Can an MD Do to Avoid DME Fraud Charges?

Before you sign a contract with a supplier of equipment to patients, obtain legal advice. Recently urologists have been selling catheters as this is a high maintenance, low profit service. The profit is in the provision of the catheter itself. However, many of these structures are highly suspect and subject to abuse.

Telemedicine providers are often young physicians seeking to supplement income. Be careful because a Locums Tenens referral is no guarantee that the employer is legitimate. Again, consult with a lawyer before participating in a Locums telemedicine position that involves genetic testing, DME or lab referrals.