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GAO report explores health care fraud

Posted on October 9, 2012 | No Comments

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Key Developments

The Government Accountability Office (GAO)  has designated Medicare and Medicaid as high-risk programs partly because their size and complexity make them vulnerable to fraud. GAO was asked to provide information on the types of providers that are the subjects of fraud cases. The resulting GAO report identifies provider types who were the subjects of fraud cases in (1) Medicare, Medicaid, and CHIP that were handled by federal agencies, and changes in the types of providers in 2005 and 2010; and (2) Medicaid and CHIP fraud cases that were handled by Medicaid Fraud Control Units (MFCUs). To identify subjects of fraud cases handled by federal agencies, GAO combined data from three agency databases and removed duplicate subject data. GAO also reviewed public court records, such as indictments, to identify subjects’ provider types. To describe providers involved in fraud cases handled by the MFCUs, GAO collected aggregate data from 10 state MFCUs, which represented the majority of fraud investigations, indictments, and convictions nationwide.

According to data GAO collected from 10 state Medicaid Fraud Control Units (MFCU), over 40 percent of the 2,742 subjects investigated for health care fraud in Medicaid and CHIP in 2010 were home health care providers and health care practitioners. Of the criminal cases pursued by these MFCUs, home health care providers comprised nearly 40 percent of criminal convictions and 45 percent of subjects sentenced in 2010. Civil health care fraud cases pursued by these MFCUs in 2010 resulted in judgments and settlements totaling nearly $829 million. Pharmaceutical manufacturers were to pay more than 60 percent ($509 million) of the total amount of civil judgments and settlements.

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The Government Accountability Office (GAO) issued a report examining (1) the extent to which Medicaid enrollees have private insurance, and (2) state and CMS initiatives to improve third-party liability (TPL) efforts. GAO found that 7.6 million Medicaid enrollees (13.4 percent) had private health insurance in 2012. Additionally, the number of Medicaid enrollees with private health insurance is expected to increase with the expansion of Medicaid. To combat this issue, GAO recommends that the Centers for Medicare and Medicaid Services (CMS) routinely monitor and share across all states information regarding key TPL efforts and challenges, as well as provide guidance on state oversight of TPL efforts conducted by Medicaid managed care plans.
The Government Accountability Office (GAO) issued a preliminary report finding that fraud controls for enrollment in health care coverage and consumer subsidies under the Affordable Care Act (ACA) may be lacking. Congressional investigators using fake identities were able to obtain taxpayer-subsidized health insurance on Affordable Insurance Exchanges. The report’s findings were contained in testimony delivered at a House Ways and Means Committee hearing on July 23.
The Congressional Research Service (CRS) released a report claiming that under the Affordable Care Act (ACA), the federal government may oppose the dismissal of False Claims Act (FCA) cases that deal with publicly disclosed information. By amending the FCA's public disclosure bar, Health Care Fraud and Abuse Laws Affecting Medicare and Medicaid: An Overview states that section 1313(a)(6) of the ACA provides greater discretion for the federal government in deciding which FCA cases they choose to pursue. Additionally, the CRS report said that relators and other whistleblowers may bring FCA cases to court that deal with publicly disclosed information published in state and local government reports.
Medicare Part B expenditures, which include payment for advanced imaging services, are expected to continue growing at an unsustainable rate. In efforts to identify the root of these steep growth rates, questions have been raised about physician self-referral's role in this growth. Self-referral occurs when a provider refers patients to entities in which the provider or the provider's family members have a financial interest. Senators Max Baucus (D-Montana) and Chuck Grassley (R-Iowa) and Representatives Pete Stark (D-California), Sander Levin (D-Michigan) and Henry Waxman (D-California) asked the Government Accountability Office (GAO) to examine the prevalence of advanced imaging self-referral and its effect on Medicare spending. The report examines (1) trends in the number of and expenditures for self-referred and non-self-referred advanced imaging services, (2) how provision of these services differs among providers on the basis of whether they self-refer, and (3) implications of self-referral for Medicare spending. The GAO report estimates that in 2010 alone, Medicare spent $109 million unnecessary dollars associated with physician self-referrals. Such referrals serve as an incentive for providers to order more tests than they otherwise would. From 2004 through 2010, self-referred and non-self-referred advanced imaging services both increased, with the larger increase among self-referred services. The number of self-referred MRI services increased over this period by more than 80 percent, for example, while the number of non-self-referred MRI services increase by only 12 percent. The GAO analysis showed that providers' referrals of MRI and CT services substantially increased the year after they began to self-refer. GAO estimates that in 2010, providers who self-referred likely made 400,000 more referrals for advanced imaging services than they would have if they were not self-referring.
A new brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) focuses on efforts to combat a longstanding challenge: fraud and abuse in health care. These issues constitute compelling problems for the Medicare and Medicaid programs, with related costs of $98 billion last year.
The US Department of Health and Human Services Office of Inspector General (OIG) issued a consumer alert concerning potential signs of fraud in the health insurance Marketplaces. The OIG alert addresses specific actions that may indicate fraudulent activity around the Marketplaces. Some of the actions consumers should be wary of include:
  • individuals asking consumers for money to enroll in Marketplaces or Obamacare;
  • sham or look-a-like websites;
  • persistent, high-pressure solicitation to purchase insurance; and
  • individuals asking consumers for personally identifiable information without previous contact.
Additionally, OIG used this alert to remind Medicare beneficiaries that they do not need to enroll in the Marketplace. The Centers for Medicare and Medicaid Services (CMS) also released a tip sheet alerting consumers on ways in which they can protect themselves against fraud in the Marketplaces.
The Centers for Medicare & Medicaid Services (CMS) released a final rule on Friday regarding the implementation of the Physician Payment Sunshine Act, which requires drug and device-makers to disclose financial relationships with doctors. Passed under the 2010 Affordable Care Act (ACA), the law was supposed to make a database describing these relationships available by September 2013. The final rule requires companies to begin collection of the information in August 2013, and to begin reporting it to the U.S. Department of Health and Human Services (HHS) by March 2014.
According to a study recently released by Office of the Inspector General (OIG), between 2001 and 2010, Medicare payments for Part B goods and services increased by 43 percent, from $77 billion to $110 billion. During this same time, Medicare payments for evaluation and management (E/M) services increased by 48 percent, from $22.7 billion to $33.5 billion. E/M services have been vulnerable to fraud and abuse. In 2009, two health care entities paid over $10 million to settle allegations that they fraudulently billed Medicare for E/M services. The Centers for Medicare & Medicaid Services (CMS) also found that certain types of E/M services had the most improper payments of all Medicare Part B service types in 2008. The OIG report is the first in a series of evaluations of E/M services.
The Centers for Medicare & Medicaid Services (CMS) published a final rule today addressing three provisions under the Affordable Care Act (ACA): 1) Medicare and Medicaid Programs; 2) Changes in Provider and Supplier Enrollment, Ordering and Referring, and Documentation Requirements; and 3) Changes in Provider Agreements. This final rule follows up on the May 5, 2010 interim final rule with comment period. It requires all providers of medical or other items or services and suppliers that qualify for a National Provider Identifier (NPI) to include their NPI on all applications to enroll in the Medicare and Medicaid programs and on all claims for payment submitted under the Medicare and Medicaid programs. In addition, it requires physicians and other professionals who are permitted to order and certify covered items and services for Medicare beneficiaries to be enrolled in Medicare. Finally, it mandates document retention and provision requirements on providers and supplier that order and certify items and services for Medicare beneficiaries. The final rule intends to prevent fraud in Medicare...