Healthcare Business News

Weaknesses seen in anti-fraud programs

By Jessica Zigmond
Posted: June 7, 2012 - 3:00 pm ET

Representatives of two federal agencies on Thursday testified about the need to address weaknesses in the Medicare and Medicaid programs, while a CMS official said collaborative efforts with states and a two-pronged strategy have shown promise in preventing fraud.

Ann Maxwell, regional inspector general in the HHS inspector general's office of evaluation and inspections, reported that the national Medicaid audit program has not identified overpayments that were commensurate with what the CMS invested in the program. For instance, in fiscal 2010, the CMS paid review and audit Medicaid integrity contractors, or MICs, about $32.1 million, but audit MICs identified about $6.9 million in overpayments for the first half of the calendar year. Similarly, the agency's Medicare-Medicaid Data Match program, also did not yield a positive return on investment. In 2008, the CMS spent about $60 million on that program, but recovered about $46.2 million and avoided spending about $11.6 million for a total of $57.8 million—still below the amount that was spent.

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Representatives from the Government Accountability Office—who said both federal healthcare programs are on the GAO's list of “high-risk programs”—highlighted four ways that the CMS could reduce improper payments, such as strengthening provider-enrollment standards and developing and improving pre-payment controls so that claims are paid properly the first time.

Dr. Peter Budetti, who serves as deputy administrator and director of the CMS' Center for Program Integrity, said the CMS will continue to expand its work with states to combat Medicaid fraud. Currently, the CMS is involved with 137 collaborative audits in 15 states that represent about 53% of Medicaid expenditures, Budetti said.

Later, the CMS confirmed that the agency is also in discussions with another 15 states that make up about 26% of expenditures. At the hearing, Budetti also emphasized the agency's “twin pillar” strategy, which includes the fraud prevention system—a technology required under the 2010 Small Business Jobs Act—and the enhanced provider enrollment and automated provider screening systems.

“The fact that we upfront identify problems and prevent the wrongful payment, as opposed to the past—find out about the wrongful payment and try and recoup—that acknowledgment of what's not worked in the past, and how we can do better, is a key point in this hearing,” Rep. Todd Platts (R-Pa.), chairman of the House Oversight and Government Reform Committee's Subcommittee on Government Organization, Efficiency and Financial Management, told Modern Healthcare after the hearing ended.

In 2011, the CMS estimated that Medicare had about $43 billion in improper payments, while Medicaid had about $21.9 billion, according to the GAO.

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