White House Puts Focus On Medicare and Medicaid Fraud
Medicare and Medicaid fraud is a perennial target of government cost-cutters. While a perfectly honest system-which we will never have-would not have a major impact on the rising cost of healthcare, the ante was raised recently when the White House revealed that Medicare and Medicaid improperly paid out $54.2 billion in fiscal 2009. Of that amount, $24.1 billion came from the Medicare fee-for-service program, more than twice as much as was reported for fiscal 2008.
In comparison, the Bush Administration estimated that Medicare fee-for-service fraud devoured a mere $17 billion from 2005 to 2008.
The difference between these estimates can be attributed to the new method that the Centers for Medicare and Medicaid Services (CMS) is using to measure payment errors. In the past, payments of claims supported by incomplete documentation or records with illegible physician signatures were not considered to be errors. Now they are, and that could lead to some changes in Medicare policy.
“From the very start of the Administration, the President has directed all the agencies across government to use honest budgeting and to take the hardest, most detailed look possible at what was happening with taxpayer dollars inside our agencies and inside critical programs,” explained Kathleen Sebelius, Secretary of Health and Human Services. “This year, we made the call to stop calculating our error rate in fee-for-service Medicare the way that the previous Administration did and to start using a more rigorous method in calculating this rate in keeping with our mandate to root out errors and fraud.”
So what does this mean in terms of cracking down on fraud? President Obama is expected to sign an executive order that will require all federal agencies-including CMS-to maintain a website that will track improper payments, error rates, and outstanding payments. Agency directors will be called on the carpet if they fail to reduce error rates for two years running. In addition, the government will give contractors, including healthcare providers, incentives to return improper payments. (Good luck with that.)
Meanwhile, Sen. Charles Grassley (R-Iowa), a longtime fraud hawk, has introduced legislation that would allow CMS to delay payments where fraud is suspected.
The government has recently instituted other programs to cut down on fraud, including the notorious recovery audit contractor (RAC) program, which is ferreting out fraud in hospital claims. It is unclear what effect these measures will have, but providers can expect more pressure to toe the line on CMS claims requirements.
Don Berry, a regular reader of this blog, points out that the government made its estimate of fraud in government agencies amazingly quickly-just 48 days after the end of FY 2009. He suspects that the Administration is trying to emphasize its credibility as a fraud fighter to bolster its case for healthcare reform. He’s probably right about that, considering the time lag that usually accompanies CMS reporting on fraud and abuse.
Berry also points out that Danny Werfel, controller of the Office of Management and Budget, seemed to be caught flat-footed at a White House press conference when asked how much of the improper payments could be attributed to fraud. Werfel said he didn’t know, because the government lacked the “forensic auditing tools”-whatever that means-to give a definitive answer. Well, that did sound silly, but it’s understandable, considering the sudden change in government accounting methods. The real question is whether CMS will ever be able to distinguish between honest mistakes or flaws in documentation and intentional fraud.
What is clear is that organized crime has been having a field day in exploiting the government health programs. One hopes that the joint task force that was formed by HHS and the Department of Justice earlier this year will do something about that.
Ken Terry, a former senior editor at Medical Economics Magazine, is the author of the book Rx For Health Care Reform. follow all BNET Healthcare posts on Twitter.
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