Healthcare Business News

GAO: CMS needs to do more to combat healthcare fraud

By Joe Carlson
Posted: November 29, 2012 - 12:00 pm ET

In written remarks delivered to a House subcommittee, the director of the Government Accountability Office criticized the CMS for not following past recommendations to stem the tide of fraud in healthcare. Such anti-fraud measures include removing Social Security numbers from Medicare cards to make identity theft more difficult, requiring providers in high-risk areas to post surety bonds and integrating the CMS' existing predictive-analytics system for fraud into existing IT systems.

GAO Healthcare Director Kathleen King said in remarks (PDF) to the House Committee on Energy and Commerce's Subcommittee on Health that healthcare fraud-fighting remains an ongoing struggle for the CMS as fraud schemes continue to proliferate. Among these are schemes involving billing for services not rendered or not medically necessary, upcoding, paying kickbacks to doctors and theft involving Medicare beneficiaries' stolen identities.

"Although CMS has taken some important steps to identify and prevent fraud, including implementing provisions of in (the Affordable Care Act), more remains to be done to prevent making erroneous Medicare payments because of fraud," King said.

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The GAO analyzed criminal and civil healthcare fraud judgments from 2010 and found that medical practices topped the list of organizations found guilty of criminal healthcare fraud cases, but hospitals led by a sizable margin among organizations that settled or were found liable in civil fraud lawsuits.

In criminal cases, 925 entities pleaded guilty or no contest to healthcare fraud or were found guilty in 2010—among them, 18.7% were medical clinics or physician practices, according to the GAO. Close behind were durable medical equipment suppliers, who were judged guilty in 18.5% of the years' criminal healthcare fraud cases.

Two hospitals were judged guilty in 2010, accounting for 0.2% of the guilty judgments in criminal cases, well behind home health agencies (4.5%), pharmacies (4.3%) and pharmaceutical manufacturers or suppliers (1%).

Hospitals, however, held a significant plurality of the civil fraud cases filed by investigators or whistleblowers that resulted in negotiated settlements or findings of liability. Fully, 165 such civil cases focused on hospitals in 2010, representing 27.4% of all the cases filed, as measured by the GAO.

Medical clinics and physician practices accounted for 16.6% of civil cases that year, ahead of home health agencies (5.6%), pharmacies (2.2%) and pharmaceutical manufacturers or suppliers (3.2%).

HHS' office of the inspector general stated in its year-end report to Congress this week that at least $64 billion was lost in 2011. King said Congress allocated at least $608 million to fraud-fighting efforts that year.

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