NEJM and RWJF release new health policy brief on fraud and abuse elimination

Posted on August 1, 2012 | No Comments
Filed under Fraud and Abuse, Library, Third Party Resources

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Key Developments

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.

Just last week, the federal government and health insurers announced a new partnership to work together to reduce health care fraud and abuse. And in recent months, the Centers for Medicare and Medicaid Services (CMS) has adopted new antifraud and abuse tools authorized by provisions in the Affordable Care Act and the Small Business Jobs Act of 2010. Use of these tools will enable CMS, whose contractors process millions of claims and thousands of enrollment applications every business day, to better identify fraudulent claims and suspicious providers and suppliers before–not after–they enter the programs’ payment and provider systems. This new approach is a paradigm shift from the earlier “pay and chase” model CMS used for many years.

Topics covered in the brief include:

* Descriptions of the new tools. CMS and its contractors now employ an advanced analytics fraud prevention system to flag suspicious claims, and a provider screening program to check licenses, verify identification, and provide cross-state database checks.

* What’s controversial about the renewed fraud and abuse crackdown? Some critics have pointed to overzealous investigators, who are paid by a contingency fee arrangement with CMS, and who are said to focus on punishing providers for technical mistakes rather than fraudulent acts. Federal oversight authorities have also criticized CMS on the ground that there is a lack of coordination among antifraud programs and that audits can be duplicative.

* Will the latest crackdowns work? In fiscal year 2011 CMS reported $4.1 billion was recovered, the highest recovery amount in a single year, but the Government Accountability Office reported in 2012 that CMS had not followed through on some antifraud initiatives it had adopted. Time and more sophisticated analytics may be needed before significant progress becomes a reality.

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CRS states ACA limits FCA public disclosure bar

June 7, 2013

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.

GAO report reviews self-referrals and costs

November 2, 2012

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.

GAO report explores health care fraud

October 9, 2012

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.

OIG updates guidance on evaluating state false claims act legislation

March 18, 2013

Updated guidelines released by the US Department of Health and Human Services Office of the Inspector General (OIG) provide new information for evaluating state false claims act legislation. The updates adhere to various amendments made to the federal False Claims Act of 2009 and 2010. Several recent legislative endeavors, including the Affordable Care Act (ACA), have altered the foundation and scope by which the False Claims Act operates. One ACA example found within the OIG updates is how states will receive their share of any Medicaid recoveries made under the federal False Claims Act.

CMS releases long-awaited Physician Payment final rule

February 4, 2013

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.

OIG releases study on Medicare payments and fraud

September 26, 2012

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.

CMS releases final rule addressing Medicare fraud

April 24, 2012

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...

HHS/DOJ issue annual report on fraud and abuse

January 25, 2011

The U.S. Department of Health and Human Services (HHS) and the U.S. Department of Justice (DOJ) have issued their annual report on health care fraud and abuse. The report shows that the Federal Government's Health Care Fraud and Abuse Control Program recovered more than $4 billion of taxpayer dollars during fiscal year 2010. HHS Secretary Kathleen Sebelius said, "Thanks to the President’s leadership and the new tools provided by the Affordable Care Act, we can focus on stopping fraud before it happens."

CMS grants $9 million to combat fraud

October 1, 2010

The Centers for Medicare and Medicaid Services has granted $9 million to support more than 50 Senior Medicare Patrol (SMP) Programs fight fraud. According to the agency, "The grants will provide additional funds to increase awareness of Medicare and Medicaid beneficiaries of health care fraud prevention, identification and reporting through expansion of SMP program capacity."

HHS issues proposed rule to stem Medicare, Medicaid, and CHIP fraud

September 21, 2010

The Department of Health and Human Services has issued a proposed rule to stem fraud in the Medicare, Medicaid, and Children's Health Insurance Program under authority created by the health reform law. According to the agency, the proposed rule will:

"Establish the requirements for suspending payments to providers and suppliers based on credible allegations of fraud in Medicare and Medicaid;
"Establish the authority for imposing a temporary moratorium on Medicare, Medicaid, and CHIP enrollment on providers and suppliers when necessary to help prevent or fight fraud, waste, and abuse without impeding beneficiaries’ access to care.
"Strengthen and build on current provider enrollment and screening procedures to more accurately assure that fraudulent providers are not gaming the system and that only qualified health care providers and suppliers are allowed to enroll in and bill Medicare, Medicaid and CHIP;
"Outline requirements for states to terminate providers from Medicaid and CHIP when they have been terminated by Medicare or by another state Medicaid program or CHIP;
"Solicit input on how to best structure and develop provider compliance programs, now required under the Affordable Care Act, that will ensure providers are aware of and comply with CMS program requirements."