WASHINGTON -- The president and chief executive officer of a medical equipment company invoked the Fifth Amendment at Senate hearing Wednesday, declining to answer questions about aggressive marketing tactics used to sell scooters, sleep apnea machines and other home medical supplies to Medicare recipients who may not need or want them.
Jon Letko of U.S. Healthcare Supply LLC, based in Milford, N.J., exercised his constitutional right not to incriminate himself at the hearing before the Senate Subcommittee on Financial and Contracting Oversight.
Before dismissing Letko, the subcommittee’s chairwoman, Sen. Claire McCaskill, D-Mo., expressed hope that he might be more forthcoming with senators in the future.
“We know that your company has been speaking to the press about this issue and we’re hopeful that at some point in time your company will be in a position that you can speak to the committee under oath in the same manner that you were willing to speak to the press,” McCaskill said.
McClatchy wrote about the subcommittee’s probe into Medicare billing and marketing practices by medical equipment companies earlier this month, and the story quoted a statement from U.S. Healthcare that questioned the panel’s findings that more than 60 percent of Medicare payments for durable medical equipment – such as back braces, diabetic testing kits, and power scooters – may be improper. The high error rate cost Medicare an estimated $27 billion over the past four years, according to the investigation.
U.S. Healthcare and a second company – Med-Care Diabetic and Medical Supplies Inc., based in Boca Raton, Fla. – had declined invitations to testify at a hearing in April that focused on Medicare waste and fraud. Both companies were compelled by subpoenas to appear before the Senate panel Wednesday.
Although U.S. Healthcare declined to testify, Steve Silverman, a representative from Med-Care, agreed to answer senators’ questions. He was accompanied by an attorney.
Silverman acknowledged that his company pays incentives to employees based on how many people they call and the number of orders they place, but he said he and his staff did their best to follow all rules and regulations.
“I want to play by the rules,” he said.
The medical equipment industry has come under fire in Washington since a Missouri doctor, Charlotte Kennedy, wrote a letter to McCaskill that said U.S. Healthcare and Med-Care had been sending her faxes requesting approval for expensive supplies such as back braces and sleep apnea machines. When Kennedy spoke to her patients, her letter said, they told her they were being harassed by telemarketers and hadn’t requested any of the equipment.
Kennedy’s letter prompted the senator to open a congressional investigation into sales strategies used by some companies to target senior citizens enrolled in Medicare.
Medical equipment suppliers are prohibited from contacting anyone enrolled in Medicare by telephone unless the patient has given written permission or the supplier has provided equipment to the patient in the past.
More than 5,600 of 6,100 U.S. Healthcare claims reviewed by Medicare auditors were improper, according to a recent report by subcommittee staffers. The report said auditors had demanded that U.S. Healthcare return more than $100,000 in overpayments.