Kusserow’s Corner: House Hearing on Medicare Fraud and Abuse

The U.S. House Energy and Commerce Subcommittee on Oversight and Investigations held a hearing on “Medicare Program Integrity: Screening Out Errors, Fraud, and Abuse.” During the hearing, subcommittee members heard testimony from CMS Deputy Administrator and Director of the Center for Program Integrity Dr. Shantanu Agrawal, HHS Office of Inspector General (OIG) Deputy Inspector General for Investigations Gary Cantrell, and Government Accountability Office (GAO) Director of Health Care Kathleen M. King.

CMS Testimony

The CMS testimony revolved around how it is applying three operational principles to guide all of its initiatives: (1) aiming to achieve operational excellence in addressing the full spectrum of integrity causes, in taking swift administrative actions, and in the performance of audits, investigations and payment oversight; (2) providing leadership and coordination in program integrity efforts across the health care system; and (3) focusing on impacting the cost and appropriateness of care across health care programs. Some of CMS’s efforts to reduce fraud, waste and abuse were noted, including: (1) strengthening provider enrollment; (2) ensuring proper and accurate claims payment; (3) facilitating leadership and coordination across the health care system; and (4) improving payment data transparency.

CMS acknowledged the failure to meet its target goal of a reduced improper payment rate for Medicare fee-for-service, and that the improper payment rate had actually worsened over the last fiscal year. CMS noted that it recovered about $19.2 billion in fraudulent payments over the past five years, including $210 million through a new system that uses analytics to probe billing patterns; however, the recovered sum is dwarfed by the size of the problem, projected to be up to $50 billion a year.

The subcommittee cited one news outlet that reported that several doctors who had lost a medical license were still able to bill the Medicare program for millions of dollars. In addition, it noted that at least 14 individuals convicted of FDA-related crimes and debarred by the FDA do not appear to be excluded from the Medicare program; six doctors debarred by the FDA were paid over $1 million in Medicare payments in 2012. Another issue raised in the hearing was that a Medicare card has the patient’s social security number (SSN), creating serious risk of identity theft. Both the GAO and OIG identified fixing this SSN issue as an important step in preventing Medicare fraud.

GAO Testimony

The GAO testimony spoke to their strategies to combat fraud through examining: (1) the ability of CMS’ information system to prevent and detect enrollment of ineligible or fraudulent Medicare providers and suppliers; (2) the possible use of electronic-card technologies; (3) the oversight of program integrity efforts for prescription drugs; and (4) the oversight of certain contractors who conduct post-payment claims reviews. The GAO has focused on the following strategies: (1) provider and supplier enrollment; (2) prepayment and post payment claims review; and (3) addressing identified vulnerabilities. Based upon its work, the GAO recommended:

  • Requiring additional provider and supplier disclosures of information;
  • Establishing core elements for provider and supplier compliance programs as authorized in the Patient Protection and Affordable Care Act (ACA);
  • Increasing use of prepayment edits to help prevent improper payments;
  • Improving oversight of the information systems analysts use to identify claims for post payment, as well as the contractors responsible for the reviews;
  • Implementing mechanisms to resolve vulnerabilities that could cause improper payments; and
  • Removing SSNs from beneficiaries’ Medicare cards to help prevent identify theft.

OIG Testimony

The OIG testimony provided an overview of current health care fraud trends and challenges that impede effective oversight, as well as recommendations on how to address such trends and challenges that could result in billions of dollars being saved, along with a more efficient and effective programs. These included:

  • Providing the OIG with authority to execute federal warrants for the seizure of assets for forfeiture to curb the profitability of healthcare fraud, which will exert a deterrent effect.
  • Removing SSNs from Medicare cards to help protect the personally identifiable information of Medicare beneficiaries.
  • Strengthening the Medicare contractor’s monitoring of pharmacies and its ability to identify for further review of pharmacies with questionable billing patterns.
  • Requiring Part D plans to verify that prescribers have the authority to prescribe.
  • Increasing monitoring of Medicare claims for home health services.
  • Creating a standardized form to ensure better compliance with the face-to-face encounter documentation requirements for home health agencies (HHAs).
  • Implementing the surety bond requirement for HHAs.
  • Monitor hospices that depend heavily on nursing facility residents.
  • Modifying the hospice payment system for care in nursing facilities, seeking statutory authority if necessary.
  • Taking action to provide States with data for identifying overpayments for physician certification statement (PCS) claims when beneficiaries are receiving institutional care paid for by Medicare or Medicaid.
  • Mandating the use of the audit log feature in all electronic health records (EHRs).
  • Working with contractors to identify best practices and develop guidance and tools for detecting fraud associated with EHRs, with specific guidance to address documentation and electronic signatures in EHRs.
  • Amending regulations to require Medicare Advantage and Part D plans to report to CMS, or its designee, their identification of and response to incidents of potential fraud and abuse.
  • Establishing a deadline for when complete, accurate, and timely Transformed Medical Statistical Information System (T-MSIS) data will be available.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2014 Strategic Management Services, LLC. Published with permission.