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Policing of Medicare fraud explodes over two years

8:01 AM, Jun 7, 2013   |    comments
SAN FRANCISCO - JULY 24: A Southeast Mission Geriatric center patient holds her cane during a demonstration July 24, 2009 in San Francisco, California. Dozens of patients from the Southeast Mission Geriatric center held a demonstration protesting the San Francisco Department of Public Health's decision to shut down the clinic due to budget cuts as San Francisco faces a massive budget deficit. (Photo by Justin Sullivan/Getty Images)
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WASHINGTON - The government has revoked the ability of 14,663 providers and suppliers to bill Medicare over the past two years - almost two and a half times the number that had been revoked in the previous two years, new Department of Health and Human Services statistics to be released Thursday show.

In some states, the number of revocations has quadrupled.

"We have always been doing some of this," said Peter Budetti, Center for Medicare Services deputy administrator for program integrity. "But there has been a special focus under the Affordable Care Act."

Administration officials plan to announce the new fraud numbers Thursday as they push for more help from seniors in fighting fraud. One proposed rule would allow people who report fraud to earn up to $9.9 million in reward money in a new fraud-prevention program. Before today, beneficiaries could receive up to $10,000 for tips leading to recovery of fraud money.

A key part of the anti-fraud effort, Budetti said, includes a new, easier-to-read summary statement that allows recipients to see exactly who has billed Medicare with their identification numbers. That's a "landmark change," he said.

"Our best weapon in fighting fraud is our 50 million Medicare beneficiaries," he said. Upping the incentive amount from a possible $10,000 per case to a possible $9.9 million would "attract the kind of attention" the government needs to spotlight the program, Budetti said.

During the past four years, the government has recovered $14.9 billion in Medicare fraud money, due in large part to the 2010 health care law, also known as the Affordable Care Act. The law allowed the government to analyze data to spot indications of fraud and stop paying providers. Budetti explained that all providers had to go through a reapplication process to participate in Medicare.

Those who didn't meet a requirement, had felony convictions, had incorrect addresses or who weren't properly licensed are no longer allowed to bill Medicare. Officials focused on providers in areas that have historically high levels of fraud, such as durable medical equipment, home health care and ambulance services. In the two years before the system was in place, just 6,307 providers and suppliers had their Medicare billing privileges revoked, according to CMS.

However, the program faced pressure from Congress in October when members learned the system had not yet integrated Medicare's payment program.

"The key question is, when will Medicare officials finally have a fully operational and effective anti-fraud system so we can turn off the spigot of fraudulent Medicare payments?" said then-senator Scott Brown, R-Mass. He added that the system was "months late."

At the time, officials said it would be integrated by January. CMS reported in January that the system was saving $3 for every $1 spent in the first year.

The system is now working, Budetti said, although he wants to see it work harder. Last year, seniors called Medicare's fraud hotline to report billing from doctors they had never seen. Using that information, Budetti said they learned of one provider that had sparked calls from 200 to 300 Medicare recipients. In other cases, seniors reported the fraudulent use of their Medicare numbers. Officials then used the system to track providers with a history of using Medicare beneficiary numbers fraudulently.

Budetti said officials are still looking for a good way to reissue beneficiary numbers to the 284,000 people who, according to a report by HHS' inspector general, have had breached or stolen numbers. The numbers tie in to several government systems, such as Social Security, so it's difficult to change them.

In the meantime, the new statements should help, Budetti said. Last year, between 40,000 and 50,000 phone calls to the Medicare hotline were key to fraud investigations, he said.

Last week, HHS Secretary Kathleen Sebelius credited fraud reduction as part of the reason Medicare solvency had been extended by two years in the annual trustees report.
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