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Despite some improvement and fraud-fighting tools used by the Centers for Medicare and Medicaid Services (CMS), the country is still losing as much as $90 billion annually to Medicare fraud, according to Sen. Bill Nelson (D-FL), the chairman of the Senate Special Committee on Aging.

A History of Fraud 

The Government Accountability Office has identified Medicare as being at “high risk” for improper payments and fraud since 1990. Medicare accounts for $635 billion in annual U.S. spending.

The Aging Committee’s top Republican, Sen. Susan Collins from Maine, noted that in the late 1990s when she chaired the Permanent Subcommittee on Investigations and held a series of hearings on Medicare fraud, one witness said he went into Medicare fraud because it was easier than dealing drugs. “He could make a lot more money at far less risk,” Collins said. While some progress has been made since the ‘90s in fending off fraud, “con artists have become increasingly clever in their schemes to rip off Medicare,” she said.

Patricia Gresko of Romeo, Mich., told the panel she saw a doctor several years ago who diagnosed her with an immunological disorder and prescribed multiple, intravenous treatments that took seven hours each. She had awful side effects and later learned that the doctor was arrested for Medicare fraud and she didn’t need these treatments, which Medicare paid the doctor more than $14,000 for.

Shantanu Agrawal, deputy administrator with the Center for Program Integrity at CMS, said a government program helped recover in fiscal year 2013 $4.33 billion in taxpayer dollars from individuals trying to defraud federal healthcare programs serving seniors and taxpayers.

He said a fundamental change in the administration’s approach to fraud fighting has helped. Rather than CMS and law enforcers chasing down fraudulent payments, there are now a set of tools to keep fraudsters out of the programs and to uncover the schemes quickly. Additionally, the Affordable Care Act now requires CMS to screen all existing 1.5 million Medicare suppliers and providers. More than 260,000 of those screened have had their billing privileges deactivated for not responding to the screening efforts.

CMS has revoked about 17,500 providers and suppliers’ ability to bill Medicare because they had felony convictions, weren’t operational or were not in compliance with rules.

Combatting Medicare Fraud

“Health care fraud is a complex crime that can manifest in countless ways,” said National Health Care Anti-Fraud Association CEO Louis Saccoccio, noting that the sheer volume of health care claims makes fraud detection a challenge. Medicare Parts A and B pay 4.5 million claims daily.

He said new information-sharing partnerships and programs such as the public-private Healthcare Fraud Prevention Partnership are helping to stem the problem. But problems persist – some health insurers are hesitant to share data and information that could lead to litigation brought by health care providers. “…Only 40% of NHCAA health insurance company members enter information about their open fraud investigations” into an NHCAA database while 95% of the same members search the database for information about other companies, Saccoccio said.

The government’s Medicare Fraud Strike Force last year charged 345 people, which led to 234 guilty pleas and 46 jury trial convictions. The Southern District of Illinois (East St. Louis) and the Southern District of Florida led the nation in prosecutions.

But it’s tough to keep up with. “In Florida, we are seeing fraud schemes quickly evolve. As enforcement efforts target certain schemes, new permutations of these schemes arise,” said Brian Martens who is based in Florida as part of the Office of Inspector General at the U.S. Health and Human Services Department.

He recounted the story of a man who was supposed to go to a specific clinic for his HIV treatment, but instead accepted a vitamin mixture for cash.

“Medicare fraud is not a typical white collar financial crime,” he said. “…It can affect patients, their families, the health care system and all taxpayers. And it’s not just about the money…Medicare beneficiaries can suffer physical harm.”

 

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