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Results have not been transparent in Medicare and Medicaid fraud
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As physicians, we are aware that Medicare fraud occurs when an individual or corporation collects money from the Medicare program illegitimately or under false pretenses. To date, it has been difficult for the government to cost-effectively reclaim fraudulent payments and most fraud still goes undetected.
In addition, many of those claims brought forward are successfully disputed or a settlement is reached. In 2010, the Congressional Budget Office estimated Medicare spending was $528 billion and the Office of Management and Budget stated that improper Medicare payments were $47.9 billion. However, a small percentage of these payments were reclaimed as being fraudulent. There is a history of fraud occurring in most of the large U.S. government spending programs. It takes time for the many fraud cases to be uncovered, and Medicare fraud has typically been exposed in a piece-meal manner. We have read frequent news reports that have included things such as phantom billing for services not provided, drug and equipment providers charging for equipment and supplies that were never ordered, and providing patients with used or cheaper equipment than prescribed. Other cases have involved signatures from physicians as well as charges that have been falsely coded, unbundled, double billed or up-coded. In addition, recent news reports have exposed scams that have even recruited patients to participate in fraudulent claims. While coding has become more accurate among physicians, fraud in this area deserves more attention.
Waste and unproven care
Douglas W. Jackson
In a previous Commentary, I quoted Peter Orszag, the former White House budget director, saying that as much as a third of health care spending is “waste” and does not improve patient outcomes. This statement was the basis of some of the measures that were included to reduce medical costs in the Patient Protection and Affordable Care Act. However, nothing of significance was included to reduce the increasing medical costs in the United States. Politicians for years have pledged to reduce medical costs as well as eliminate fraud and waste in Medicare and other government programs. To date, little has occurred. The programs to pursue fraud in Medicare and Medicaid have been ineffective and some of the programs in the past lost money or showed small net results.
The real question is how federal waste can best be controlled from a distant location, like our central government, given the gigantic and complex nature of Medicare and Medicaid programs. The same institution that is trying to root out fraud, oversees an expanding program that is not fiscally solvent.
‘Pay and chase’ system
Medicare is handicapped from having effective antifraud success. This is because the system has used a “pay and chase” methodology. A better approach must be developed — one that would not pay fraudulent claims in the first place. But the question, is how does one do this? In addition, how can the federal government get rid of fraud in a large program and yet not spend more or about as much as they recover? They face problems with some of the individuals, dummy corporations and straw owners that are abusing the system when accused close down in one location and then continue with business in another location or under different names.
There is a push to identify and screen questionable claims before payment and some contracts have been awarded to develop prevention systems. It has been difficult to identify potential contractors with expertise in predictive analytic technology to alert to potential Medicare fraud before the payments are made. According to a Government Accountability Office study released in June 2012, while the amount of money recovered has increased, Medicare and Medicaid administrators spent $102 million during a 4-year period to find $20 million in overpayments.
Far from transparent
The first National Summit on Health Care Fraud was held on Jan. 28, 2010 to bring together leaders from the public and private sectors to identify and discuss innovative ways to eliminate fraud, waste and abuse in the health care system. The summit was part of the first national gathering on health care fraud among law enforcement and the private and public sectors.
While the officials responsible for overseeing the fraud prevention system were charged with holding open hearings, to date it has been difficult to find and see results and costs. It was my understanding that the 2010 law required these reports to the public be made with full disclosure on the amounts and costs of collection.
The first report is past due, and we can only speculate on the reason for its delay. The Affordable Care Act provided an additional $350 million to pursue physicians who are involved in intentional and unintentional Medicare abuse and also provides for stricter penalties.
Whistleblowers
A positive example of progress was reported in October 2012 when a Medicare fraud scheme involving approximately $432 million in false billing was exposed. These operations involved investigations in seven cities leading to charges against 91 individuals — including physicians, nurses and other licensed medical professionals.
Whistleblowers going forward will be more apparent and will require physicians to change some policies with their employees. The Department of Justice’s Medicare fraud enforcement efforts rely heavily on health care professionals coming forward with information about Medicare and Medicaid fraud. Whistleblower laws have made it possible for employees to report False Claims Act violations and have contributed to more than $13 billion in total civil settlements in more than 3,660 Medicare cases.
Overall, the government claims to have recovered $4.1 billion in 2011. This total, along with that recovered since 2008, results in excess of $10 billion recovered. This amount is currently less than 0.5% of Medicare payments.
Take practice and coding seriously
With the successes so far, there will be more audits in the future and including more challenges to the payments orthopedic surgeons have received. In addition to the repayment of the challenged payments, the government can issue fines and punitive measures. So while you are defending yourself and fighting the charges, articles may leak to your local newspaper or television news stating that you are being investigated for fraud.
Ignorance cannot be used as an excuse and defense if you are found not in compliance. You should take any audits or inquires seriously.
- Do not just assume things will work out, although they often do, after considerable time, effort and expense.
- Involve legal counsel familiar with the audit process early.
- Check your insurance for audit riders.
- Do not do an interview with an auditor without knowledgeable legal counsel.
- Review your compliance plan and make sure it is up to date.