At this week’s spring meeting of the National Association of ACOs (NAACOS), officials from the Centers for Medicare & Medicaid Services were asked to respond to growing concerns about the impact of widespread anomalous billing and suspected fraud involving urinary catheters that is impacting Medicare ACO results. 

According to a February 2024 story in the New York Times, more than 450,000 Medicare beneficiaries accounts were billed for urinary catheters in 2023, up from about 50,000 in previous years. The data came from a report produced by the Institute for Accountable Care and NAACOS. “The massive uptick in billing for catheters included $2 billion charged by seven high-volume suppliers, according to that analysis, potentially accounting for nearly one-fifth of all Medicare spending on medical supplies in 2023,” the Times story noted. 

Clif Gaus, Sc.D., who announced he would be retiring as NAACOS CEO this fall, raised the issue during an April 11 panel session with CMS leaders. 

Calling the durable medical equipment (DME) catheter billing issue “the elephant in the room for everybody here,” Gaus asked if and when CMS was going to come up with a solution to mitigate the potential losses to NAACOS members.

“I know that the the DME fraud issue is front and center in all of your minds,” responded Meena Seshamani, M.D., Ph.D., deputy administrator and director of the Center for Medicare. Taking a step back, she added that ACOs are an incredible source of information and opportunity to understand where there might be anomalous billing going on. “We want to be able to partner and leverage that,” Seshamani said. “We remind everyone of being able to contact the Center for Program Integrity (CPI) when there are concerns with anomalous billing that you all are seeing because where there can be anomalous billing that absolutely can affect the bottom line of shared savings. 

She also noted that all ACOs must have compliance plans and in that compliance plan there are requirements around reporting to OIG around potential fraud. “So I think there are ways that we are partnering now and we are absolutely exploring and looking into the latest DME fraud with that mindset of how can we make sure that together, we are enabling good stewardship of the Medicare program.”

“We are really grateful that that ACOs are bringing these issues to us,” said Elizabeth Fowler, J.D., Ph.D., director of the Center for Medicare and Medicaid Innovation (CMMI) and deputy administrator of the Centers for Medicare and Medicaid Services. “I think that is a testament of success, that we all have more and better data. We’re using it effectively. We’re rooting out these issues.”

Fowler noted that for ACO REACH, she anticipates being able to share an approach for anomalous billing related to catheters in the coming weeks. “We are working on that actively in terms of a long-term strategy. We want to make sure that we’re aligned. We don’t want to have a separate solution that works over here, but doesn’t align with what Meena is thinking about. For the longer-term strategy, we’ll be working closely with Meena and how the SSP program is handling those issues, but for REACH organizations, we anticipate being able to share how we will address those issues soon.”

One response from an audience member, an executive at Palm Beach ACO, noted that the DME erroneous billing is a lot bigger than how the CMS execs were describing it. 

“Our ACO went from $62 million in shared savings — the most in the program — all the way down to $45 million due to $50 million of erroneous fraud,” he said. “Starting in 2020 we submitted 39 submissions to CPI and the OIG. We submitted 800 signed patient attestations, but our providers paid for the fraud. It wasn’t the trust fund. It wasn’t the taxpayers. It was our providers working hard in your programs. As a result, we had very embarrassing results. Everybody questioned our organization. Why are you guys failing? Why did you guys reduce? We laid off 15 percent of our staff, but it’s much worse than what you described. And it’s much worse than just the catheters and 2024. So we just kindly ask that you address the issue with a higher urgency because it really hurts all of us in the room that are directly paying for this wrong.” 

Fowler pointed out that because this is an ongoing investigation, they have to be careful in terms of how they talk about this issue. “We cannot call this fraud. We don’t know that it’s fraud, so as you notice, we’re calling it anomalous billing. We need to be careful and intentional about how we talk about it. But we are incredibly grateful that your organizations have brought a lot of this to our attention.”

In a statement, Gaus reflected on his tenure leading NAACOS. “The 11-plus years as CEO have been an immensely enjoyable chapter in my 55-year long career. When we founded NAACOS, everyone on the founding board believed we were the future of healthcare in America, and we still do,” he said. “I am sure the board and new CEO will continue to lead the transformation of our health care system to a place where all patients can be sure they are receiving the highest quality care and value.”
“Clif has been an instrumental leader in the ACO movement, back to the passing of the Affordable Care Act. To this day, he is a stalwart supporter of healthcare transformation that is driven by providers taking accountability for total cost of care and outcomes to achieve better, more accessible, affordable and equitable care for patients, families and communities. We wish him all the best as he turns the page on this chapter of his career,” said Emily DuHamel Brower, M.B.A., NAACOS board president and senior vice president of clinical integration and physician services for Trinity Health, in a statement.
The NAACOS board of directors has appointed a search committee that has engaged Korn Ferry in a national search to find NAACOS’s next president and CEO.


Please enter your comment!
Please enter your name here