CMS officials say agency is monitoring concerns from ACOs about DME costs

Accountable care organizations have sounded the alarm on billions in durable medical equipment fraud, and officials at the Centers for Medicare & Medicaid Services (CMS) said Thursday that the agency is monitoring the issue.

The National Association of ACOs (NAACOS) told the feds that a review of data from CMS' Virtual Research Data Center found a spike in payments related to two billing codes. Payments for urinary catheters grew from $153 million in 2021 to an eye-popping $2.1 billion in 2023.

NAACOS said the spike in costs could significantly impact ACOs' finances, slashing savings and potentially impacting benchmark payments.

Liz Fowler, Ph.D., director of the Center for Medicare and Medicaid Innovation, said at NAACOS' spring conference Thursday morning that the fact these conversations can happen at all is a positive sign for the effectiveness of accountable care programs.

"We are really grateful that ACOs are bringing these issues to us," she said. "I think that is a testament of success that we all have more and better data. We're rooting out these issues."

Fowler said the agency expects to "share an approach for anomalous billing related to catheters in the coming weeks" for the ACO REACH program and that it's actively working alongside the Center for Medicare to ensure that steps taken in REACH align with the broader Medicare Shared Savings Program.

She added that she'd like to see the conversation around these payments reframed, as it's unclear at present whether this unexpected rise in costs is fraudulent activity rather than waste.

"We need to be sort of careful and intentional about how we talk about it," Fowler said.

Meena Seshamani, M.D., director of the Center for Medicare, was also on the panel Thursday morning. She said Medicare leadership knows that the concerns about DME spend are "front and center in all of your minds." ACO participants are a powerful source of information for federal agencies to identify and understand trends in improper billing, she said.

Seshamani encouraged ACOs to contact CMS' Center for Integrity if they see something that seems out of place. Reporting mandated as part of ACO stewardship requirements can also identify issues, she said.

"I think there are ways that we are partnering now," she said, "and we are absolutely exploring and looking into the latest."

Despite the reassurances from the panel, ACO leaders in attendance urged the feds to make this issue a priority. A leader at a Florida-based ACO told the panelists that issue goes beyond just catheters, and, at their organization alone, the costs did have a major impact on savings performance.