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Senators ask providers for fraud-fixing suggestions

By Joe Carlson
Posted: May 5, 2012 - 12:01 am ET

Experts generally agree that a staggering amount of money—between $20 billion and $100 billion—in federal spending on healthcare programs is lost to waste, fraud and abuse each year despite an ongoing crackdown by the government and its private contractors.

At the same time, healthcare providers complain about aggressive tactics, wrong priorities and confusing guidance from the private companies hired by the CMS to investigate claims of overpayments and fraud.

The Senate Finance Committee, which has jurisdiction over Medicare and Medicaid, thrust itself into that tug of war last week, issuing an open letter to hospitals, physicians and contractors to submit ideas and feedback about ways to improve the system to prevent waste and fraud in federal healthcare programs. The deadline for comments is June 29.

Kimberly Brandt, chief healthcare investigative counsel for the Republicans on the Senate committee, also disclosed at an industry conference in Las Vegas last week that the senators have been gathering information in an informal inquiry on the CMS contractors, trying to discern “where things are not working, such as with the functioning of some of the contractors.”

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Don May, vice president of policy for the American Hospital Association, said the Senate committee request for feedback from the provider community is likely to be answered with complaints about contractors, including the Medicare Administrative Contractors, Recovery Audit Contractors and Zone Program Integrity Contractors.

“Our concern is where you have lots of duplicative efforts to try and find simple errors, and the multiple number of auditors who are out there trying to do the same things in very different ways, creating an administrative quagmire that providers have to wade through,” May said. “It creates huge cost to the system that isn't contributing at all to patient care.”

During a May 1 panel discussion at the Health Care Compliance Association's annual meeting, Brandt—who was director of Medicare program integrity for the CMS from 2003 to 2010—said finding out why the various contractors don't communicate with one another about enforcement efforts is one of the questions the finance committee will examine.

May said the committee is also likely to hear about perceptions that contractors put too much emphasis on questions involving real-time medical judgments, such as whether a patient should be admitted for overnight hospital stays rather than treated in a less-expensive outpatient setting.

He noted that news of the Senate Finance Committee's actions came on the same day as the multiagency Medicare Fraud Strike Force announced the arrests of 107 criminal defendants that were accused of submitting more than $450 million worth of false claims in various schemes in cities across the country.

“You're going to hear: Why aren't the program integrity efforts focused on where there are real fraudulent problems, instead of trying to second-guess a physician who admitted a 90-year-old woman who had a mastectomy, and saying she should have been an outpatient,” May said.

During a news conference announcing those Strike Force arrests, Modern Healthcare asked Dr. Peter Budetti, director of the Center for Program Integrity at the CMS, about complaints regarding the agency's fraud and abuse contractors. Budetti said he wasn't aware of any specific complaints at issue.

“We are always aware that whenever we want to hold someone accountable, even for possible fraud or having retained overpayments, that's something that involves a degree of interaction that sometimes raises questions like that.”

Several integrity contractors either did not respond to requests for interviews or declined to comment.

Tim Johnson, executive director of healthcare provider audit consulting firm Jackson Davis HealthCare in Denver, said that by and large the CMS' contractors do a good job.

“Are there some contractors out there that do not apply coverage criteria, or do they apply it inconsistently? Yes, there are,” Johnson said. “Now, is some of that criteria not popular? Yeah. Is some of it vague? Yeah. Does it change all the time? Yeah.”

At the HCCA conference last week, some critics took issue in particular with Zone Program Integrity Contractors, or ZPICs, whose mission includes finding fraudulent activity. ZPICs, they said, are known in the industry as the auditors who may actually show up at the front door of the doctors' office, hospital or other care facility rather than issuing information demands through the mail.

“I have experienced numerous times ZPICs showing up and acting like they have the authority to do anything they want,” said Lester Perling, a partner in healthcare law with Broad and Cassel. “I've had them tell me, ‘I have a right to talk to anyone I want,'” Lester said. “Well, no you don't.”

—with Rich Daly

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