South Florida Durable Medical Equipment Suppliers: Results of Appeals

For a March 2007 report, OIG conducted unannounced site visits to 1,581 South Florida durable medical equipment suppliers. Four hundred ninety-one (491) of these suppliers failed to meet Medicare supplier standards, and CMS revoked the suppliers' billing privileges. Nearly half of the revoked suppliers appealed the revocations and received hearings. Hearing officers reinstated the billing privileges for 91 percent of these suppliers. Two-thirds of suppliers whose billing privileges were reinstated have subsequently had their privileges revoked again or inactivated, and some individuals connected to reinstated suppliers have been indicted. We found that because there are no criteria regarding the types of evidence necessary to reinstate the billing privileges of suppliers, hearing officers reinstated the suppliers' billing privileges based on a variety of evidence. Examples of evidence that suppliers provided include photographs, affidavits, utility bills, and leases. Based on the report's findings, we recommended that CMS strengthen the appeal process by developing criteria regarding the types of evidence required for hearing officers to reinstate suppliers' billing privileges. CMS agreed that it should consider establishing guidelines regarding the evaluation of evidence that a hearing officer will review during the appeal process.