Fighting health care fraud in the U.S. can seem like an endless game of whack-a-mole. When government fraud squads crack down on one scheme, another pops up close by. But the fraud squads who look for scams in the federal Medicare and Medicaid programs have some new weapons: tools and funding provided by the health law.
Medicare and Medicaid pay out some $750 billion dollars each year to more than a 1.5 million doctors, hospitals and medical suppliers. By many estimates, about $65 billion dollars a year is lost to fraud.
"For a long time we were not in a position to keep up with the really sophisticated criminals," said Peter Budetti, who oversees anti-fraud efforts at the Centers for Medicare and Medicaid Services. "They're not only smart, they're extremely well-funded. And this is their full time job."
And their creativity is endless. Criminals use real patient IDs to bill for wheelchairs that were never delivered or exams never performed. Dishonest doctors – a small percentage of physicians, to be sure – charge for care they never deliver or perform unnecessary operations. In one scam, criminals bill Medicare and a private insurer for the same patient.
But if crooks are smart, it may turn out that computers are smarter. The federal health law and other legislation directed the federal government to start using sophisticated anti-fraud computer systems. Budetti said the systems, which are being used first in the Medicare program, are similar to those used by credit card companies to detect suspicious purchases.
"We're able to now verify whether a person was being treated by two different physicians in two different states on the same day or a variety of other possibilities," he said.
The computer program crawls around the heaps of Medicare claims – some 4 million a day – to look for outliers: spikes in prosthetics in Miami or heart stents in Missoula. And for the first time, doctors and others who want to bill Medicare are being assessed based on their risk to commit fraud. Those who seem crooked are kept out.
Lou Saccoccio, head of the National Health Care Anti-Fraud Association, said the aggressive computer systems and the government’s new authority to suspend payments signal an important change at the Center for Medicare and Medicaid Services.
"What the Affordable Care Act does and what CMS, I think, is doing now is really a shift of focus of the 'pay and chase' mentality," said Saccoccio. "[That's] where the fraud is committed, you've paid the money. Now you have to go out and get it back and prosecute the individual."
"Pay and chase" has given way to a prevention of fraud model, he said.
Over the next decade, Congress will direct some $340 million dollars in additional funding for government anti-fraud efforts. Still, Saccoccio expects the aggressive new efforts, which he applauds, will yield far more leads than the current team of investigators and analysts can handle.
"As you get all this information, do you have the resources to look at it all, triage it, so to speak, and make determinations?" he asked.
There's only so much detective work investigators can do sitting at computer terminals, says Patrick Burns of Taxpayers Against Fraud. The effort also needs some foot soldiers, Burns said.
"There has not been historically, in health care, enough ground truth-ing," said Burns, whose organization helps people sue entities that are guilty of fraud on behalf of the federal government. "What I mean by ground truth-ing is: You go to Miami, you get 100 bills and you go and actually see, 'Is there a doctor’s office where you’re sending the money?'"
Burns says the Obama Administration's approach to fighting fraud has been more systematic than previous ones. Indeed, the number of so-called Medicare Strike Force teams operating around the country has quadrupled since 2009. Still, the mantra of the fraud fighters sounds a lot like a department store sale: The more you spend, the more you save.
"What we need to do is fund a war on fraud like we would fund a single day of a real war," Burns said. "If we do that, this country will straighten out real quick."
In the meantime, those in charge of the government's anti-fraud efforts say the new approach is working. The number of defendants facing fraud charges jumped sharply last year. At the end of next month, Medicare is expected to report to Congress the number of new scams detected and the number of new cheats kept out of the program.
Reserve your seat now for MedCity CONVERGE, to be held July 9-10 in Philadelphia. Discover strategies, solutions and startups in healthcare innovation. Be a part of this gathering where the entire healthcare ecosystem converges.
There is nothing new about whack-a-mole. The DOJ Healthcare Task Force had an operation called "whack-a-mole" nearly 10 years ago. The Fraud continues to develop because CMS does nothing to stop the fraud from occurring. Do not be fooled by the new the Advanced Provider Screening system (APS) or the Fraud Prevention System (FPS) projects that CMS claim have been successfully stopping the pay and chase. They are nearly one year into the projects, yet absolutely nothing has changed. The public will learn the results of these projects in the next month as CMS report their first year results to Congress. Expect dismal results as not a thing has changed- other than CMS spending a ton of money for contractors to use algorithms that do not work to find fake leads (false positives). Know this: - Not a single claim has been stopped before it has been paid through the FPS project- how this stopping pay and chase- The project is designed to sift through the claims, identify fraud, stop the claim from getting paid and investigate the provider who submitted the claim yet I am 100% certain this has not happened one single time in the first year of the project (because the leads are bad leads and the system will not allow to pend claims as CMS wanted it to). CMS still allows bad providers into the program and still pays fraudulent claims at record levels. Luckily Congress appears to have figured out that all the press releases and high praise within CMS (Budetti), HHS (Sebelius) and DOJ (Holder) are smoke screens. Hopefully Congress will hold them accountable for spending 100's of millions of dollars on contractors that haven't done a thing to change this fraud riddled environment. Fraud is as prevalent today as ever within the Medicare system and the ACA has done nothing to stop it other than allow CMS, HHS and DOJ to exaggerate the success they have had for the past 3 years and mislead the American public pretending they are doing something new and innovative.