THE TREATMENT DECEMBER 30, 2009
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Often preying on the program’s elderly and poor beneficiaries, Medicare fraudsters cost the government $47 billion last year alone, using billing scams that some officials have called more profitable than drug-trafficking. Earlier this month, 26 individuals in three cities were arrested a series of raids for bilking Medicare of $61 million, including a Florida doctor accused of running a $40 million scheme that falsely listed patients as blind diabetics so he could bill them for home nursing care. Similarly outrageous scams include false claims for power wheelchairs claimed to be destroyed during Hurricane Katrina and drug prescriptions from doctors who have died.
The reform bills moving through Congress commit more than $100 million to prevent fraud and strengthen enforcement practices. And by the time the Senate was finished working on its bill, it had adopted even tougher anti-fraud measures than the House had--increasing penalties for health-care fraud, expanding the definition of actionable offenses, and devoting greater resources to fraud detection. Such provisions would beef up the anti-fraud funds that Obama has already pledged to HHS in the 2010 budget, which the agency says could save the government at least $2.7 billion.
But is that enough? According to one recent George Washington University report, the bill’s mandated conversion to electronic claims transactions will both “increase the volume of claims and allow large enterprises to use technology to engage in fraud while avoiding computer fraud detection systems.” (White-collar fraudsters are using increasingly sophisticated tools to run their scams, and the Mafia and other major criminal enterprises are also getting in on the racket.) The massive expansion of Medicaid, whose enrollment will increase by 15 million if the bill passes, could also allow fraud to proliferate in states with poor records of curbing abuses. Last week, for instance, an audit revealed that New York State’s Medicaid program lost $92 million over five years as a result of improper payments and poor recordkeeping.
To its credit, the Obama administration has already taken significant steps toward combating health-care fraud, even ahead of the reform bill. In May, the Departments of Justice and Health and Human Services launched a joint “Medicare Fraud Strike Force” that’s been behind the recent upswing in indictments. And part of the reason that Medicare fraud losses have tripled over the last year—and attracted significant public attention as a result—is that the White House has introduced stringent new reporting requirements. Such vigilance hasn't had a major impact on shaping the debate over whether Congress enact health-care reform. But it could make a huge difference in how successful public officials will be in implementing the bill's sweeping changes.
Follow Suzy Khimm on Twitter: @SuzyKhimm
5 comments
There is no system handling the quantities of money involved in health care that can't be gamed. The question is what we do to maximize the difficulty of cheating, and minimize the likelihood of success. In this respect, electronic medical records may be as much a benefit in preventing fraud as in enabling it. Fraud typically stands out as an anomaly in one or more data dimensions that can be tracked and statistically modeled, if you have access to a large universe of baseline data. Consolidated, computerized records provide that baseline. One thing that has never to my knowledge been tried, but would make an excellent project for the government, is to identify a metropolitan area as a medical baseline area, and flood the area with tight, compensated audits to assure that it represents a standard candle against which the remainder of the country can be compared for fraud detection purposes.
- sdemuth
December 31, 2009 at 12:13pm
I agree. With a large data base and the proper use of statistics, fraud should become extremely difficult. It should always show up as a variety of statistical anomalies, including the absence of conditions for certain patients -- hard to fabricate an entire coherent medical history. This will, however, require consolidating information about each patient and about each service provider. I have no problem with this at all, but some civil libertarians will.
- roidubouloi
December 31, 2009 at 12:41pm
roi: Yes, it does require consolidation, and yes, the civil libertarians will howl. But to an astonishing degree, this is already going on with less control than a regulated agency would provide. I've seen drug prescription databases with data on 40 million plus subscribers being mined for promotional purposes, for example, and the best private payer fraud detection services aggregate provider/subscriber/payer data across multiple payers to the tune of 20% or more of the privately insured population as well. Most people would be astonished at some of the consolidated records retained on them by corporate health care giants. Personally, I'd feel a lot more comfortable with that data usage VERY closely watched by the government. I think fraud detection is an ideal area for a public-private partnership - use the power of the Federal government to establish and control access to the data, including enforcing privacy protection, and let the payers utilized the data to audit their own payments and as service providers, assist the government in auditing medicare, etc. in return for a cut on the identified fraud.
- sdemuth
December 31, 2009 at 1:41pm
Sounds good to me, sdemuth
- roidubouloi
December 31, 2009 at 3:54pm
Just a comment on electronic claims transactions: Since 2007 Medicare has required the submission of all claims via electronic claims. No paper claims are permitted anymore. So Medicare has already undergone the complete conversion well over a year ago. Your article sounds as if it hasn't happened yet, and that there's going to be a big impact once it does. Someone just doesn't have a clue. Ask any doctor who accepts Medicare patients. There's nothing better than having electronic records for detecting fraudulent claims: you have the data and you can data mine it to death. So the crime is occurring whether or not it is paper or electronic. With paper, there's no data mining, so nothing can be done. With eclaims, at least the government stands a chance...Unfortunately, Medicare has been approving and paying for claims before checking to see they aren't fraudulent. What they should be getting for their big bucks now is an infusion of electronic anti-fraud units to check the eclaims in real time - not after the horses $$$$$$ have left the barn.... "According to one recent George Washington University report, the bill’s mandated conversion to electronic claims transactions will both “increase the volume of claims and allow large enterprises to use technology to engage in fraud while avoiding computer fraud detection systems.”
- peterkussell
December 31, 2009 at 6:44pm