Testimony Reveals CMS Really is Taking a Bite Out of Crime

On April 24, the Senate Finance Committee held a hearing titled “Anatomy of a Fraud Bust: From Investigation to Conviction,” focusing on a recent Justice Department sting operation that resulted in charges against 91 people accused of defrauding Medicare for nearly $300 million in false billings. Among those in attendance were Senate Finance Committee Chairman Max Baucus (D-Mont.), Senator Orrin Hatch (R-Ut), Kathleen King from the Government Accountability Office (GAO) and Daniel Levinson, Inspector General, U.S. Department of Health and Human Services.  After all the testimony, one thing is clear, which is that the tools provided by the Affordable Care Act (P.L. 111-148) are working. The OIG’s framework is working. CMS’ plans are working. And while they’re not perfect, given that more money has been recovered in the past year than ever before, there’s every reason to be optimistic.

The GAO presented a positive report revealing that, yes, health reform is making progress preventing fraud and abuse in Medicare. The GAO outlined new enrollment screening procedures for Medicare service providers that aim to stop fraud before it happens, rather than relying on the previous method of retroactively tracing fraud and attempting to recollect overpayments.

“This report shows that health care reform is working to prevent fraud and abuse in Medicare and save taxpayer dollars. When criminals cheat Medicare, they’re stealing from taxpayers and hurting seniors,” Baucus said. “We need to keep strengthening our prevention efforts to make sure that criminals never get into the system and that fraudulent money doesn’t go out the door to cheats and scammers.”

According to the GAO report, CMS has successfully strengthened the existing enrollment screening process through the addition of new provider and supplier screening procedures. Included in the new screening procedure is an automated screening system that will ensure the provider enrollment system is up-to-date and accurate as well as defined conditions for the level of screening according to the risk of fraud, waste and abuse. Screening procedures that still remain in progress and are continuing to be worked on by CMS are also noted in the report.

 The report did point out, however, that CMS needs to (1) determine which providers will be required to post surety bonds to help ensure that payments made for fraudulent billing can be recovered, (2) contract for fingerprint-based criminal background checks, (3) issue a final regulation to require additional provider disclosures of information, and (4) establish core elements for provider compliance programs.

 Daniel R. Levinson, presented testimony regarding the Office of Inspector General’s (OIG) role in the prevention, investigation, and prosecution of fraud, waste, and abuse in the Federal health care programs. In fiscal year (FY) 2011, the work of OIG, the Centers for Medicare and Medicaid Services (CMS), and DOJ resulted in criminal health care fraud charges against more than 1,430 defendants, 743 criminal convictions, 977 new investigations of civil health care fraud, and recoveries of nearly $4.1 billion in taxpayer dollars, the highest amount ever recovered. This work was done under the Health Care Fraud and Abuse Control (HCFAC) Program.

Over the past 3 years, for every $1 spent on the HCFAC Program, the Government has returned an average of $7.20. From 1997 to 2011, HCFAC activities have returned more than $20.6 billion to the Medicare Trust Funds. In FY 2011, for the second consecutive year, coordinated interdepartmental anti-fraud efforts have resulted in more than $4 billion in recoveries. The OIG has  accomplished these things using a comprehensive and holistic approach to: prevent and detect health care fraud, waste, and abuse; ensure that programs are run efficiently and effectively; promote compliance by health care providers and suppliers; and hold accountable those who defraud Medicare or Medicaid.

 Levinson touted the success of the Medicare Fraud Strike Force teams, which are an integral part of the fight against fraud. The Strike Force model has proven highly successful. Since their inception in 2007, Strike Force operations in 9 cities have led to charges against more than 1,200 individuals for fraud schemes involving approximately $3.7 billion in claims. For example, Levinson pointed out the famous ABC Home Health and Florida Home Health (ABC/Florida) case. More than 50 individuals were convicted in connection with that $25 million fraud scheme relating to home health and physical therapy services. ABC/Florida billed the Medicare program for expensive physical therapy and home health services that were not medically necessary, were never provided, or both. The procedures used in this case provides an excellent framework for further investigations.

 These new procedures, as well as the new tools and resources heath reform provided for law enforcement, helped make last year the most successful ever in terms of fraud crackdowns. The federal government recollected a record $4.1 billion as a result of its efforts.