The CMS said it is expanding its efforts to root out fraud, abuse and improper payments from federal healthcare programs.
Program integrity oversight will be expanded beyond fee-for-service to cover Medicare's drug discount card program, its HMOs and the prescription drug benefit that begins in 2006. The agency also will use more data analysis to uncover improper payments.
For hospitals, stepped up program integrity efforts means a greater chance of a hospital being wrongly ensnared in a government Medicare probe, said Robert Salcido, a healthcare defense lawyer with the law firm Akin Gump Strauss Hauer & Feld in Washington and a former lawyer with the U.S. Justice Department.
The history of the CMS' program integrity efforts, Salcido said, is that the agency, "casts its net too broadly. The innocent as well as the guilty become entangled in the investigation. Once you're entangled in the investigation, it's generally a costly process to prove your innocence, and that's what they're usually left to do." The high cost of defending against these investigations is the context for a lot of the settlements the CMS reaches, he added.
The CMS hired an outside contractor, IntegriGuard, to analyze weekly drug-pricing data under the prescription drug card system to uncover "bait and switch" practices. IntegriGuard also will look for schemes such as fraudulent drug cards and identity theft.
States will be responsible for more scrutiny of Medicaid billing. Under a proposed regulation, each state would be required to review a sample of Medicaid and State Children's Health Insurance Program payments each month looking for improper billings. The proposal, which will be open for public comment until Sept. 27, calls for the CMS to determine a national Medicaid payment error rate based on the data compiled by the 50 states and the District of Columbia.
The CMS also will expand a test program to analyze Medicare and Medicaid billings together to uncover schemes that might otherwise go unnoticed, such as a physician or other provider billing both programs for a total of more than 24 hours in a single day. Two states-Ohio and Washington-will be added to the seven that were in the initial test.