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OIG releases study on Medicare payments and fraud

Posted on September 26, 2012 | No Comments

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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.

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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.
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...
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 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...
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."
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."
The Department of Health and Human Services, Centers for Medicare and Medicaid Services, and Administration on Aging have launched a one million-dollar public-education campaign to combat fraud timed to coincide with the issuing of $250 "donut hole rebate" checks created by the health reform law. This includes radio ads in English, Spanish, Korean, and Armenian.
Health and Human Services Secretary Kathleen Sebelius and Attorney General Eric Holder have sent a letter to state attorneys general on new efforts to combat Medicare fraud. The letter is timed to coincide with the mailing of the $250 "donut hole rebate checks" authorized by the health reform law and pledges to "use the new tools and resources provided by the Affordable Care Act to further crack down on fraud."
Releasing an annual report on health care fraud prevention, the Department of Health and Human Services and the Department of Justice emphasize new measures of the health reform law designed to route out abuse of the system.
The health reform law revises the anti-kickback statute to broaden the reach of the law and enhance enforcement.