Notice: Publication of OIG Updated Special Fraud Alert on Telemarketing 
by Durable Medical Equipment Suppliers

Federal Register: January 14, 2010 (Volume 75, Number 9)             
                  Page 2105-2106

AGENCY: Office of Inspector General (OIG), HHS.

ACTION: Notice.

SUMMARY: This Federal Register notice sets forth the recently issued 
OIG Updated Special Fraud Alert addressing telemarketing by durable 
medical equipment (DME) suppliers. For the most part, OIG Special Fraud 
Alerts address national trends in health care fraud, including 
potential violations of the anti-kickback statute for Federal health 
care programs. This Updated Special Fraud Alert updates the Special 
Fraud Alert on Telemarketing by Durable Medical Equipment Suppliers 
originally issued in March 2003 and continues to highlight the 
statutory provision prohibiting DME suppliers from making unsolicited 
telephone calls to Medicare beneficiaries regarding the furnishing of a 
covered item.

FOR FURTHER INFORMATION CONTACT: James A. Cannatti III, Senior Counsel, 
Office of Counsel to the Inspector General, (202) 205-0007.

SUPPLEMENTARY INFORMATION:

I. Background

    The Office of Inspector General (OIG) was established at the 
Department of Health and Human Services by Congress in 1976 to identify 
and eliminate fraud, waste, and abuse in the Department's programs and 
to promote efficiency and economy in departmental operations. OIG 
carries out this mission through a nationwide program of audits, 
investigations, and inspections. To reduce fraud and abuse in the 
Federal health care programs, including Medicare and Medicaid, OIG 
actively investigates fraudulent schemes that are used to obtain money 
from these programs and, when appropriate, issues Special Fraud Alerts 
that identify practices in the health care industry that are 
particularly vulnerable to abuse.
    OIG issues Special Fraud Alerts based on information it obtains 
concerning particular fraudulent or abusive practices within the health 
care industry. Special Fraud Alerts are intended for widespread 
dissemination to the health care provider community, as well as those 
charged with administering the Medicare and Medicaid programs. To date, 
OIG has published in the Federal Register the texts of 12 previously 
issued Special Fraud Alerts.\1\
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    \1\ All OIG Special Fraud Alerts are available on the OIG Web 
site at: http://oig.hhs.gov/fraud/fraudalerts.asp.
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    This Updated Special Fraud Alert updates the Special Fraud Alert on 
Telemarketing by Durable Medical Equipment Suppliers originally issued 
in March 2003 and continues to focus on section 1834(a)(17) of the 
Social Security Act, which prohibits suppliers of DME, except under 
limited circumstances, from making unsolicited telephone calls to 
Medicare beneficiaries regarding the furnishing of a covered item, and 
possible telemarketing practices by DME suppliers through the use of 
independent marketing firms.

II. Updated Special Fraud Alert: Telemarketing by Durable Medical 
Equipment Suppliers (November 2009; Original Published March 2003)

    Section 1834(a)(17)(A) of the Social Security Act prohibits 
suppliers of durable medical equipment (DME) from making unsolicited 
telephone calls to Medicare beneficiaries regarding the furnishing of a 
covered item, except in three specific situations: (i) The beneficiary 
has given written permission to the supplier to make contact by 
telephone; (ii) the contact is regarding a covered item that the 
supplier has already furnished the beneficiary; or (iii) the supplier 
has furnished at least one covered item to the beneficiary during the 
preceding 15 months. Section 1834(a)(17)(B) specifically prohibits 
payment to a supplier that knowingly submits a claim generated pursuant 
to a prohibited telephone solicitation. Accordingly, such claims for 
payment are false and violators are potentially subject to criminal, 
civil, and administrative penalties, including exclusion from Federal 
health care programs.
    The Office of Inspector General (OIG) has received credible 
information that some DME suppliers continue to use independent 
marketing firms to make unsolicited telephone calls to Medicare 
beneficiaries to market DME, notwithstanding the clear statutory 
prohibition. Suppliers cannot do indirectly that which they are 
prohibited from doing directly. OIG has also been made aware of 
instances when DME suppliers, notwithstanding the clear statutory 
prohibition, contact Medicare beneficiaries by telephone based solely 
on treating physicians' preliminary written or verbal orders 
prescribing DME for the beneficiaries. A physician's preliminary 
written or verbal order is not a substitute for the requisite written 
consent of a Medicare beneficiary.
    Except in the three specific circumstances described in the 
statute, section 1834(a)(17)(A) prohibits unsolicited telemarketing by 
a DME supplier to Medicare beneficiaries, whether contact with a 
beneficiary is made by the supplier directly or by another party on the 
DME supplier's behalf. Moreover, a DME supplier is responsible for 
verifying that marketing activities performed by third parties with 
which the supplier contracts or otherwise does business do not involve 
prohibited activity and that information purchased from such third 
parties was neither obtained, nor derived, from prohibited activity. If 
a claim for payment is submitted for items or services generated by a 
prohibited solicitation, both the DME supplier and the telemarketer are 
potentially liable for criminal, civil, and administrative penalties 
for causing the filing of a false claim, as well as criminal and civil 
penalties for using interstate telephone calls in furtherance of 
schemes to defraud.

What To Do If You Have Information About Fraud and Abuse Involving 
Medicare or Medicaid Programs

    If you have information about DME suppliers or telemarketers 
engaging in any of the activities described above, contact any of the 
regional offices of OIG, U.S. Department of Health and

[[Page 2106]]

Human Services, at the following locations:

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            Regional offices                       States served                         Telephone
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Boston..................................  MA, CT, ME, NH, RI, VT.........  617-565-2664
New York................................  NY, NJ, PR, VI.................  212-264-1691
Philadelphia............................  PA, DE, DC, MD, VA, WV.........  215-861-4586
Atlanta.................................  AL, GA, KY, NC, SC, TN, MS.....  404-562-7603
Chicago.................................  IL, IN, MI, MN, OH, WI.........  312-353-2740
Dallas..................................  TX, LA, AR, OK, NM.............  214-767-8406
Kansas City.............................  MO, ND, SD, MT, KS, IA, CO, NE,  816-426-4000
                                           UT, WY.
San Francisco...........................  No. CA, OR, WA, ID, AK.........  415-437-7961
Los Angeles.............................  So. CA, AZ, NV, HI.............  714-246-8302
Miami...................................  FL.............................  305-530-7756
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    Dated: December 14, 2009.
Daniel R. Levinson,
Inspector General.
[FR Doc. 2010-562 Filed 1-13-10; 8:45 am]
BILLING CODE 4152-01-P